Washington’s announcement that it suspects that China is behind the biggest cyberattack yet on U.S. government computers marks the latest downturn in Sino-American relations. The theft of personal records of up to four million people from the databases of the Office of Personnel Management is unprecedented in size and scope. It follows on the heels of a series of other hack attacks by China and Russia on the U.S. government.

The worsening of Sino-U.S. relations is deeply troubling. It was on full display at the recent Shangri-La Dialogue in Singapore, the region’s major security forum. Although U.S. Secretary of Defence Ashton Carter did his best to dial down the rhetoric, his message to the Chinese on land “reclamation” in the South China Sea was crystal clear: The United States will not tolerate any attempt to curb freedom of navigation on the high seas or in the air.

Many countries in the region worry openly that if the Chinese and American military play games of chicken, there is going to be a major “incident” that could escalate into direct armed confrontation. They are right.

There is blame on both sides.

The Obama administration’s “pivot” to Asia was always bigger on rhetoric than delivery. But it continues to be seen by the Chinese as an attempt to encircle them through a policy of gradual containment, reinforced by a flurry of new defence agreements that the United States has concluded with Japan, the Philippines, India and Vietnam. The Trans-Pacific Partnership is also a major irritant. The Chinese see it as a geopolitical initiative directed against them. It is why they have chosen to focus on regional groupings more conducive to their interests.

What some now refer to as “CNN overflights” by U.S. military reconnaissance aircraft over the disputed Spratly Islands have made for great political theatre, but also tweaked the Chinese nose and raised the stakes.

But China has not helped its cause, either. It is widely seen as having bullied its smaller regional neighbours even though it is now trying to play nice. It has always sent the B team to deliver its message at the Shangri-La Dialogue. As a consequence, it is seen as beating a drum instead of playing the lute.

China’s recently announced cybersecurity pact with Russia only confirms suspicions about the disruptive potential this bargain may elicit. However, as the world’s second-largest economy now moves to becoming a provider of global services as well, China has major tangible interests in promoting an Internet that is safe, secure, open, accessible and free from attack.

As for Canada, it is generally thought that we don’t have a dog in this East Asia fight. But perhaps we should.

The emerging markets of the Indo-Pacific are still the fastest growing in the world, notwithstanding the recent economic downturn. Every recent major study shows that Canada’s future prosperity lies with the emerging markets of the Indo-Pacific, especially China.

In a region where economics and security are two sides of the same coin, we have been essentially AWOL on the security dimension. Apart from the occasional port visit by a naval vessel or special participation in joint naval exercises, we have not been engaged. Many countries in the region, such as Indonesia, have said they would like to see more of us because we are respected and trusted.

We also have a role to play in the region’s “soft”security issues, for instance, by lending expertise on fisheries, refugees, human and drug trafficking, maritime coastal management and cybersecurity.

Until the beginning of this century, Canada and Indonesia jointly managed conflict in the South China Sea via a Track II “informal” diplomatic dialogue for conflict prevention. The South China Sea Dialogue was a critical confidence-building forum for addressing competing regional claims by all countries in the region, including China. Yet, for reasons that are still inexplicable, we pulled the plug.

China and the United States are not quite yet two scorpions in a bottle. But we, too, have an interest in urging them to engage carefully and constructively. We also have to raise our profile in a region that is fast becoming the world’s economic and geopolitical epicentre.

The opinions expressed in this article/multimedia are those of the author(s) and do not necessarily reflect the views of CIGI or its Board of Directors.