Tensions are rising again in Southeast Asia as competing claims over the resource rich South China Sea push closer to boiling point.

In the latest series of provocations, China launched "combat-ready" patrols, offered disputed ocean blocs for sale and set up a garrison and new administration on Sansha. Vietnam countered with continued military overflights of the contested Spratly Islands despite warnings from Chinese officials.

With Philippine President Aquino announcing a $1.8 billion upgrade in defense forces the inevitable regional arms build-up has begun.

One would hope that countries in the region would take concerted action. That hope would be misplaced.

While the region shudders at the thought of open conflict affecting a major artery of Asian trade, no collective action has been able to resolve the situation. ASEAN couldn’t even reach agreement on a routine joint public statement at the end of their annual gathering this year. Not that another non-binding piece of paper would have had any real influence. A 2002 Code of Conduct signed by ASEAN members and China to resolve the disputes peacefully continues to be ignored as countries vie for potentially lucrative natural resources.

An increasingly militarized land and sea grab continues despite calls for peaceful resolution. With the U.S. in full Asian tilt, the South China Sea dispute is shaping up to be the first major test of its Pacific re-engagement. What the U.S. Can or should do remains woefully undefined.

There is no longer any question that as the power vacuum expands, force, not the power of the pen defines boundaries. Beijing increasingly asserts its claims within a map of its own making while a troubling and influential undercurrent gathers momentum.

China now claims the entire South China Sea, brushing the shores of its neighbors and flying in the face of international norms. Call it the conventional "first-strike" option supported by influential Chinese think tanks and the popular state-controlled press—quick and decisive military engagement to convince Vietnam and the Philippines to back down. It worked in China’s favor during a 1974 stand-off over the Paracel Islands.

Enter the U.S., seen by many as a natural hedge against excessive Chinese influence. The State Department issued a lukewarm statement on the South China Sea urging all parties to find a peaceful solution to the impasse. Senator McCain called China's moves "provocative.”

Beyond routine drills and port calls with the Philippines, Vietnam and India the U.S. has taken a decidedly cautious approach. Peaceful resolution of territorial claims and a unified Southeast Asian response, not a military confrontation with China, remains a core U.S. foreign policy objective. That may be increasingly difficult to achieve as China presses its claims, recently “escorting” an Indian naval flotilla from its port call with Vietnam and hailing it with “welcome to Chinese waters.”

In June Philippine President Aquino sought reassurance that U.S. defense obligations would kick-in should they be attacked. The U.S. refused to take sides in the territorial dispute, a long standing policy, but reaffirmed its commitment to the bilateral Mutual Defense Treaty. At a minimum this entails immediate consultations should hostilities break out. It does not, however mean automatic military action.

Even interest from the rest of Southeast Asia for greater U.S. engagement remains tentative. Vietnam continues joint exercises with China, keen to maintain balance with its main trading partner to the north. Non-claimant states including Thailand, Singapore, Cambodia, Indonesia and Laos have shown no interest in “taking sides”, though U.S. engagement is certainly welcome. For its part China has been quick to use trade retaliation including a sudden technical hold on Philippine fruit imports.

If history is any guide the unintended consequences of even a limited military skirmish may prove hard to control. The situation remains even more volatile with a leadership transition underway in Beijing as nationalistic and even jingoistic tendencies rise throughout the country. Appeasement also has its discontents. This is the fine line the U.S. must tread.

There are no signs that the cycle of provocation and push-back will end any time soon. It should be no surprise if boat ramming incidents between fishing vessels and cutters eventually turn more confrontational. Perhaps the greatest U.S. influence will be containing any escalation by its presence alone, helping to thwart the notion that China can launch a limited attack on its neighbors without consequences.

Despite China’s preference the U.S. can and will remain a Pacific power, guarantor of the common interest, strengthening cooperation among parties, and routinely testing free access to international waters.

Southeast Asia should not overestimate this involvement and under-prepare itself thinking that their fishing fleets or contested boundaries will fall under U.S. protection. All countries in the region need to develop their own capabilities while engaging in greater regional military cooperation. The U.S. should be seen as the military of last resort, not first. At the same time China should not underestimate U.S. resolve to maintain the peace.