Watch: Filipino Soldiers Fought Off Axe-Wielding Chinese Coast Guard 'With Bare Hands'

Dramatic new video shows the latest ramming incident between Chinese and Philippine vessels in a contested area of the South China Sea, and it reveals clear escalation which involved the Chinese side clearly brandishing weapons.

The incident happened near the Second Thomas Shoal on Monday, where the Philippine military has troops stationed as part of its claim on the Spratly Islands (also claimed by Beijing). Manilla officials said their military vessels were en route there on a normal 'humanitarian resupply' mission when the boats were deliberately rammed and boxed in by Chinese coast guard ships.

The video shows Chinese crew hacking at inflatable vessels with axes and knives. The melee at sea left one Filipino soldier severely injured (he lost his thumb, official statements say), which is a rarity for such encounters. The event has been denounced as 'piracy' after Philippine soldiers fought off the armed Chinese sailors with "bare hands".

FT describes that "Several clips released by the Armed Forces of the Philippines late on Wednesday showed Chinese coastguard speedboats, assisted by at least one larger coastguard ship, ramming the Philippine boats and trapping them between the Chinese ones with ropes."

The report further emphasizes this "marked the sharpest escalation in the stand-off over the Second Thomas Shoal, a disputed reef inside the Philippines’ exclusive economic zone where Manila intentionally grounded a former US Navy ship in 1999 and which it has been using as a military outpost."

Watch some of the chaotic footage below:

To be expected, Beijing has sharply rebuked and rejected Manilla's denunciation of Chinese aggression, with Chinese foreign ministry spokesman Lin Jian saying Thursday that the Philippine vessel's purpose was "absolutely not about humanitarian resupply."

"The Philippine vessels secretly carried construction materials and even weapons and equipment, and they deliberately rammed Chinese vessels," Lin claimed.

Thus both sides are saying the other started it and was the aggressor, akin to past similar ramming incidents and the usual tit-for-tat accusations that follow. In some videos the Chinese coast guard members are heard shouting: "This is China!"

But the situation in these waters is more dangerous than in the past, given the Chinese government has recently authorized new rules of engagement, allowing the coast guard to use lethal force or board ships if they are found in Chinese territorial waters.

The US and its regional allies have consistently rejected expanded Chinese maritime claims in the South China Sea, thus the rival sides are now on a heightened collision course as tensions soar. US warships are meanwhile still committed to their "freedom of navigation" patrols, while also flying surveillance planes overhead.