"He who does not think himself worth saving from poverty and ignorance by his own efforts, will hardly be thought worth the efforts of anybody else." -- Frederick Douglass, Self-Made Men (1872)
My worry is that, much like the Middle East, U.S. policy is becoming increasingly ad hoc and reactive. As a result, the U.S. risks falling behind events or getting overly involved in peripheral matters that have little connection to its critical interests (Somalia was one example in the past; Libya is one recent example). Taking a disproportionately reactive approach reduces the United States' strategic options. Reduced strategic flexibility entails higher costs and diminished capacity to shape events, both of which will become even riskier in an era of fiscal consolidation that is both inevitable and necessary.
U.S. foreign policy needs to be more proactive so as to reduce the risks of miscalculations and maximize the United States' ability to help shape events in a fashion that is compatible with its interests and the needs of its allies. China's recent actions are, in part, an expression of how China views the South China Sea with respect to its interests and aspirations. It is also, in part, a reflection of its calculations pertaining to the expected response by the United States and neighboring states, as well as their actual capabilities to respond. The U.S. might not be able to have much short-term impact on the former situation. It has a lot of capacity to affect the latter one.
Cooperation should be pursued in the broad areas of common interest. Diplomacy should seek to find mutually acceptable remedies for areas of difference so as to preserve regional stability and mitigate the risks of miscalculation/conflict and, IMO, creative diplomacy can offer mutually-acceptable solutions for the South China Sea dispute. Respect for international law and use of that framework to create a process for resolving that dispute is a good starting point.
Finally, all the parties need to clearly articulate their critical interests (to avoid misunderstanding) and the U.S. also needs to assure that its commitments to the region and its allies remain credible (to reduce the risk of miscalculations). The combination of looming fiscal consolidation, which almost certainly will have a short- and medium-term impact on U.S. power, and neo-isolationist rhetoric among some political figures creates credibility challenges. Ineffectual diplomacy can only exacerbate those challenges and increase prospects of destabilizing events.