In the run up to the Bali summit,   Obama visited Hawaii where he promoted plans for a US centric Trans-Pacific Partnership (TPP) for free trade, and Australia where he announced plans for greater US use of Australian military bases and the development of Darwin city port as a major US staging base. TTP is a US-centric free trade zone that includes Canada and Mexico with invitation to Japan.

Thus by the time he landed in the Indonesian city, Obama has laid the foundations of what he see as an anti- China coalition to protect America’s trade turf and to dispel any impression that Washington has become inward looking in these days of economic woes. This is also the signal from the decision to use Darwin, the Northern Australian city close to shipping routes between the Indian and Pacific oceans. Obama moves are in a way a response to the Dragon’s thunder in South China Sea, which is home to huge quantities of gas and oil.

China lay claim to the entire South China Sea and has been telling the other littoral states that the difference should be settled bilaterally. It is opposed to what it sees as the US intrusion into the regional issue. But Beijing will have to blame itself if there is a flare up in SCA since it was the first to fire the warning shot. Others, US including, came up with a reflex action.

Obama met with Filipino President Benigno Aquino III and declared: “We (two countries) have a 60-year alliance that assures that we are looking out for each other when it comes to security.” He publicly backed the Philippines in its stand-off with China over the Spratly Islands.

US Secretary of State Hillary Clinton announced that Washington would give the Philippines a second Coast Guard cutter to bolster its naval strength.

The US is also building close military and political ties with Vietnam, a country where it had lost its war against Communism in the sixties and seventies. The two countries held joint naval exercises in July, and a US Naval ship visited Vietnam’s Cam Ranh Bay naval base in August for the first time since the end of the Vietnam War in 1975

These ties-ups and collaborations together the readiness to engage Myanmar, which President Obama himself announced in Bali, are part of a broader offensive to deepen US influence in Southeast Asia. And check the spreading of Chinese shadow.

Obama declared on Thursday: “The United States is a Pacific power, and we are here to stay. … Reductions in US defence spending will not—I repeat, will not—come at the expense of the Asia Pacific.”

Interestingly, notwithstanding the public display of animosity, U.S and China have developed a high degree of mutual dependence in the past decade.  China’s export driven economy which gives it scale and price advantages looks to America as the single largest market  for its survival.  For American industry China has emerged as the second home with its hassle free business environment. Meltdown of 2008 and its aftermath gave the opening Beijing was looking for to assert itself as the new Polar star.

But it will be a miscalculation for China if it fails to reckon with what makes South China Sea important for the United States.

An estimated $1.2 trillion in US commerce passes through the South China Sea and this gives Washington “a vital interest in the region”, according to US Pacific Command leader Admiral Robert Willard.