As the Sino-American relationship continues to trouble policymakers on both sides of the Pacific, Admiral Michael Mullen visited the Middle Kingdom for four days last month in an attempt to boost military ties. In a New York Times op-ed, the retiring chairman of the Joint Chiefs of Staff underlined the importance of pursuing dialogue in order to prevent lingering disputes and misunderstandings from escalating into conflict.

Mullen, who is expected to retire later this year, was critical of both American and Chinese officials for failing to maintain a permanent security dialogue. “Our military relations have only recently begun to thaw, but China’s government still uses them as a sort of thermostat to communicate displeasure,” he wrote.

When they don’t like something we do, they cut off ties. That can’t be the model anymore. Nor can we, for our part, swing between engagement and overreaction.

The United States have witnesses several events which to overreact about during the past year. As China is rising, it is becoming more assertive. Conflict has been brewing in the South China Sea especially where China’s revisionist stance on maritime borders has frustrated Southeast Asian neighbors and the United States alike.

This body of water, through which passes a third of all commercial maritime traffic worldwide and half of the hydrocarbons destined for Japan, the Korean Peninsula and northeast China, is of immense strategic importance to the Chinese but similarly vital to the continental Asian countries as Thailand and Vietnam as well as Indonesia.

China has complained of an American shadow over the South China Sea while observers in the United States are worried about Chinese naval ambitions. The country is both modernizing and expanding its fleet even if “in terms of global seapower,” as James Pritchett noted last year, China is likely to remain “in the second band of naval powers for some time to come.”

Washington’s closeness to New Delhi has prompted the Chinese to intensify their own relations with Pakistan, India’s western neighbor and foe. Their apparent lack of concern over North Korea’s nuclear ambitions and November’s shelling of a South Korean island fueled American apprehension about China’s policy on the peninsula meanwhile. An improved military relationship could mend part of that mutual mistrust.

Military and political leaders of both nations announced to convene regularly for security summits in May but apparently no further meaningful steps have been taken to put in place a policy of “strategic reassurance,” which is how the Obama Administration dubbed its China approach two years ago.

When the Americans were accommodating, it seemed only to exacerbate Chinese antagonism. They expanded their claims in the South China Sea, engaged in a major spat with Google over Internet freedom, played an obstructionist role at the climate change negotiations in Copenhagen, criticized American economic leadership and sought to water down sanctions against Iran’s nuclear program at the United Nations Security Council. Strategic reassurance didn’t seem to be working for either side. Were the Chinese interpreting Washington’s willingness to compromise as weakness?

Perhaps. More likely though is that China is sending mixed messages because it has mixed feelings about the United States and their leadership role in East Asia.

There is a divide in China’s military and foreign policy establishment. On the one side are hardliners who occupy prominent posts in the military and at Communist Party schools who feel that the Americans are conniving to deceive China and keep it poor; on the other are more cosmopolitan Foreign Ministry bureaucrats and bankers who want to maintain peaceful ties with the West.

Just as Washington can’t decide whether to treat China as a friend or foe, so the power brokers in Beijing are ambivalent about their relationship with the United States.

It is why Wikistrat‘s Thomas Barnett argues in his Equire column that there is plenty of blame to go around in the Sino-American dynamic. While Mullen chastised “those spying, secretive, bullying and increasingly well armed Chinese” for upsetting the regional peace, America is selling weapons “at a record pace to every neighboring state, conducting joint naval exercises right off China’s coast, and, you know, openly planning to bomb the breadth and length of the Middle Kingdom.”

According to Barnett, the United States don’t need a “containment” strategy for China. It is setting one in motion all by itself.

Every time Beijing starts bullying its smaller neighbors with its unreasonable claims on the South China Sea, you can just hear the West’s military-industrial complex’s cash registers start ka-chinging. China’s neighbors have collectively doubled their arms purchases in the last half decade — a totally delightful tonic for an American defense industry facing tighter Pentagon budgets.

Washington has worked to improve ties with Southeast Asian nations, even declaring stability around the South China Sea to be of “national interest” to the United States last year. It has a commitment to allies like Australia, the Philippines and Taiwan and a clear strategic interest in balancing against Chinese encroachment by supporting Thai and Vietnamese claims but this is a precarious balancing act at the same time. If China and the United States are to enhance mutual trust, the latter can’t go behind Beijing’s back and undermine its position in Southeast Asia. So for lack of a better strategy, America can only continue to aim for strategic reassurance.