The rhetoric is getting hotter among China, most of its Southeast Asian neighbors and the United States. This month, the US State Department took the unusual step of issuing a press statement, singling out Chinese behavior for criticism for creating a new administrative district that covers most of the disputed islets in the South China Sea. Chinese media have responded angrily, stoking the already high emotions among the Chinese public. Therefore, managing tensions and territorial claims that are inherently difficult to resolve has become more difficult.

Washington apparently did not intend the situation to deteriorate in this fashion. In 2010, US Secretary of State Hillary Clinton spoke out against unilateral actions in the South China Sea and for the development of an effective code of conduct to govern rivals' activities in the area. It was widely understood to be a shove in China's direction to agree to a code of conduct and to restrain the aggressive actions of its fishermen and oil drillers. It was accompanied by American professions of disinterest in the specific territorial disputes. Instead, it insisted on freedom of navigation in the heavily trafficked waters and peaceful resolution of the disputes under international law.

China didn't like the US push then. But by the end of 2010, China was trying harder to get along with its neighbors and Clinton's remarks seemed to have done well. More recently, National Security Adviser Thomas Donilon visited Beijing (and Tokyo), which was well received by Beijing's highest leaders and seemed to put the discussion of thorny issues on a high-policy plane. Coming right after his visit, the State Department statement came as a real shock to Beijing.

The South China Sea presents complicated issues of evolving international law, historic but ill-defined claims, a rush to grab declining fish stocks, and competition to tap oil and gas reserves.

China isn't alone. Vietnam has leased oil exploration blocks in contested waters, and the Philippines is trying to do the same. Their colonial occupations left a discontinuous record of historic claims, inclining them to rely more on United Nations Convention on the Law of the Sea to manage disputed resources. They encourage American weight to be thrown onto their side of the competition with China for free.

This is where the US needs to move with caution and only after thinking many steps ahead. The overriding strategic objective of the US in Asia is to manage China's rise, which appears inevitable, in ways that don't diminish vital American interests in the region.

Navigating the transition period peacefully requires strength and consistency as well as the recognition of changing realities. Severe tests of the China-US relationship are to be expected as Washington works to persuade Beijing to accept existing international rules and principles that have brought prolonged peace, stability and prosperity to the participants.

China's immediate neighbors are by definition weaker than it. In the opinion of many US politicians and strategists, Beijing's temptation to exploit that differential in power needs to be resisted with policies that reward positive behavior and raise the cost of negative behavior. It is likely that such a calculus led to the US State Department issuing the recent warning to Beijing. Besides, China has increased its naval deployments and added to its various civilian fleets operating in the sea. So China's announcement of the creation of Sansha municipality and its sister military garrison in the disputed area seemed to push the US' patience past its limits.

The test for such an initiative by the US is whether it is effective in reaching its main strategic goal. Judging from the outrage coming from China at being singled out, after Vietnam and the Philippines had taken steps without being criticized to secure resources in the contested sea before China's actions, the US statement seems to be backfiring.

Just weeks before the recent upswing in tensions, the Barack Obama administration had successfully hosted Philippine President Benigno S. Aquino III, which Manila had hoped would bring the US more closely in line behind the Philippines' claims. Obama gently let Aquino know that Washington's support for the alliance is strong and growing, but the South China Sea disputes are for Manila to handle alone or together with the other claimants. The US will provide support for principled negotiations and a peaceful resolution, but not specific outcomes.

Now, by singling Beijing out for criticism, Chinese observers believe the US has taken sides against China. This has undermined the US assertions of a principled approach based on international law by appearing not to be impartial.

The US' direct interests in the South China Sea aren't unlimited. The US has no territorial claims on the minuscule land features there. American firms and citizens are not now at risk. Freedom of navigation is paramount, and China has a different view under UNCLOS of what constitutes legitimate activity by naval vessels in its exclusive economic zones, which it claims for most of the South China Sea.

There is a constant risk of American intelligence collection activity crashing into China's insistence on the right to deny such activity. So far, this potential source of friction is being managed through political leadership by both sides, in the interest of preventing serious incidents and a deterioration of the overall US-China ties.

Because of the potential effects brought about by China's rise and its neighbors' responses, the US has a further interest in a peaceful settlement. Moreover, reinforcement of the rule of international law is in the US' interest of reducing the cost of maintaining stability and managing change going forward.

China hasn't militarized its foreign policy and doesn't appear equipped to do so for a long time. Its neighbors are not supine, and they show when needed that they are able to coalesce against Chinese actions that they judge as going too far. At the same time, China and its neighbors have more going constructively in trade, investment and other relations with each other than is at risk in this dispute.

This suggests the makings of a manageable situation, even if it remains impossible to resolve for years to come. Asian societies are quite accustomed to living with unresolved disputes, often for centuries.

In light of this reality, the US would do well to adhere to principled positions it has already articulated, and stand for a process that's fair to all disputants and those who will be affected at the margins. To do that, Washington will need to protect its position of impartiality and avoid repetition of the misconceived State Department press statement.

The author is vice-president for Studies at the Carnegie Endowment for International Peace in the US.

(China Daily 08/21/2012 page9)