Up until last April, all seemed quiet in the South China Sea. Then, a familiar island dispute surfaced again, prompting a days long standoff between Chinese and Philippine navy ships which culminated in an embarrassing retreat for the Philippines — prompting Manila to almost immediately announce deeper defense cooperation with the United States.

April’s crisis was caused when Chinese fishermen were caught in waters claimed by the Philippines. The Philippine navy tried to arrest the men but Chinese coast guard intervened, ominously encircling the Philippine warship that had been dispatched to the location. The Chinese fishing vessels subsequently left without the Philippine ship making a move.

The island nation isn’t the only one embroiled in maritime border disputes with China. Across the South China Sea, Southeast Asian states claim waters that Beijing insists are its. The United States, seeking to counter China’s rise in the Pacific, are formally neutral in these disputes but regularly participate in joint naval exercises to make clear that they will not tolerate China menacing its neighbors.

Before the Chinese-Philippine standoff, 2011 had gone by without a noticeable incident in the South China Sea region, causing M. Taylor Fravel, who is an associate professor of political science and member of the Security Studies Program at the Massachusetts Institute of Technology, to write in Foreign Affairs that China was trying to restore its “tarnished image in East Asia” and reduce the rationale for a more active American presence there.

China appeared to realize that its usual brashness, far from compelling neighbors to make concessions, created a shared interest among nations in Southeast Asia “and an incentive for them to seek support from Washington.”

None of that has changed. As the International Crisis Group pointed out in a report (PDF) last month, “Beijing’s shift toward a more moderate approach in the South China Sea in mid-2011 was rooted in the desire to repair some of the damage done to regional relationships that had led to an expanded American role in the region.”

So how to account for the return of what appears to be a confrontational policy?

The think tank observes that there is a divide within the Chinese foreign policy establishment between a civilian government that is timid and military hardliners who insist that China should protect its strategic interests in the region.

A third of all commercial maritime traffic worldwide and half of the hydrocarbons destined for Japan, the Korean Peninsula and northeast China pass through the South China Sea.

Conventional wisdom in the Chinese Ministry of Foreign Affairs, writes the International Crisis Group, is, “you don’t have to do it but you’ll be blamed if you do it and it doesn’t end up well.” Therefore, the bureaucrats would rather “set the disputes aside” and “leave it to the future, smarter generation.”

Some in the military don’t share that patience. Although few believe that China has a short-term interest in stirring a conflict in the area, national-security hawks “argue for greater assertiveness by making provocative comments in the media.” They may not be representative of the military’s thinking, coming mostly from retired officers and institutions that are affiliated with the military establishment, but “the hardliners have received more attention and inflamed nationalist public sentiment, placing more moderate policymakers in a difficult position.”

Furthermore, there is little legal clarity on what exactly is to be protected or defended and nationalism continues to restrict Beijing’s policy options.

China’s claims to sovereignty in the South China Sea, though patently revisionist, are ill defined. This adds an element of uncertainty to an already volatile situation. Strategic mistrust between China and the United States makes it all the more difficult for cooler headers to prevail.

So far, China has chosen to deploy its coast guard instead of naval assets to force its neighbors into compromises or submission in South China Sea disputes. What it seeks to avoid is the Southeast Asian states banding together and drawing in the United States further to back up their own claims.

Yet this is exactly what is happening. The tactics that China considers cautious are interpreted as bullying abroad, necessitating an American engagement to provide balance.

The difficulty for the Chinese is that to deescalate the situation, they would either have to negotiate on maritime borders which requires compromise or wind down their military presence which could be seen both by its own people and neighboring governments as surrender and risk “losing” more ground.