Looking south from my house on a small island in British Columbia, I can see the rocky shoreline of a similar island across the border in the U.S.

This year has been the occasion for both countries to cast their minds back 200 years to the War of 1812.

But we have resisted any temptation to rekindle the flames by paddling our canoes over to plant the maple leaf on U.S. soil, while our neighbours to the south have shown the same admirable restraint.

Would that the Chinese see the world of small islands the same way.

This summer saw China engage in bitter quarrels with no fewer than six of its Asian neighbours over various groups of rocky islets, while at the same time it cast a more suspicious eye at Western naval exercises off its southern coast, in which Canada played an unusually lead role.

Known as RIMPAC (for rim of the Pacific), these U.S.-led naval manoeuvres are held every two years in the South Pacific and Canada has been involved since 1971.

But this year's Canadian contingent was the largest ever – 1,400 servicemen and women – and, for the first time, Canadian officers played important roles in command posts previously reserved for Americans.

Twenty-two countries from around the Pacific Rim took part in this year's exercise, described in a previous article in the Canadian Naval Review as allowing for "military-to-military interaction among states that would not muster the political will to do so if left to their own devices.

"Canada's participation," the article went on, "allows us to support the conditions for multilateral co-operation and peaceful resolution of political disputes in the region."

But that is not how it looks from Beijing.

The nine-dash line

China was invited to observe the exercise in 1998. But it has been conspicuously uninvited ever since because of U.S. concerns for its military secrets.

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A Chinese protester holds a banner that reads Release Chinese without condition during a rally in front of the Japanese Embassy in Beijing on Aug. 16, 2012. Fourteen Chinese people were arrested Wednesday for landing without authorization on disputed islands, known as Senkaku in Japanese and Diaoyu in Chinese, in the East China Sea. (Andy Wong / Associated Press)

China not only feels left out, but also suspects the whole thing is a trial run for some future conflict involving its ambitions in the region.

"The United States is using this exercise to show off its military strength, seeking military alliances in order to contain the military rise of another country in the region," complained the People's Daily in June as the exercise began.

No prizes for guessing which "other country" the People's Daily had in mind.

Like Canada, the U.S. maintains that RIMPAC is all about peace, stability and co-operation. But the fact is, most of China's neighbours in the region are indeed deeply concerned about Beijing's military rise, and its increasingly belligerent attitude when conflicts flare up.

Like what has been happening these past several months.

Basing its claims mostly on a map of uncertain provenance inherited from the old Nationalist government, defeated by the Communists in 1949, China asserts sovereignty over everything inside a "nine-dash line" encircling almost the entire sea around its coast.

That line overlaps the territorial claims of Japan, Taiwan, Vietnam, the Philippines, Malaysia and Brunei in both the South China and East China seas.

More than lumps of rock

This year has seen particular flare-ups with Vietnam, the Philippines and Japan.

On the Paracel Islands, the scene of bitter fighting between China and Vietnam in the 1970s, China has declared the establishment of a new city, Sansha, which will also have a People's Liberation Army garrison.

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A boatload of Chinese activists from Hong Kong is surrounded by Japan Coast Guard's patrol boats on Aug. 15, 2012, near Uotsuri Island, one of the disputed islands in the East China Sea. (Masataka Morita / Associated Press)

At the same time the, China National Overseas Oil Company CNOOC (the government entity bidding for Canada's Nexen), has invited foreign oil bids in an area Vietnam says is deep inside its exclusive economic zone.

Further south, a two-month confrontation between China and the Philippines cooled down in July after a Chinese frigate ran aground only about a 100 kilometres off the Philippines coast.

These disputes are not just about lumps of rock in the middle of nowhere, they are about oil, gas and fishing rights, as well as control of vital commercial sea lanes.

The most potentially dangerous dispute of all is with Japan, over a group of outcrops known in China as the Diaoyu, and in Japan as the Senaku, islands.

In this case, the competition for control over potential resource wealth is intensified by historical baggage.

On the Chinese side, resentment over the brutal Japanese occupation of China in the 1930s and 1940s is never far from the surface.

Meanwhile, in Japan, right-wingers not only deny those war crimes, but also play on fears of Chinese domination now that Japan's economy has been eclipsed by its much larger neighbour.

Last year, after a Chinese fishing trawler rammed a Japanese coast guard vessel, China forced the release of the fishing captain by cutting off exports of rare earth minerals that were vital to the Japanese telecommunications industry.

The fallout from that incident, which raised the nationalist temperature in both countries, had barely simmered down, when the loose cannon governor of Tokyo, Shintaro Ishihara, began a campaign of almost buffoonish provocation.

When a panda, on loan from China to the Tokyo zoo, became pregnant with twins, Ishihara enraged China by threatening to name the impending cubs Sen-Sen and Kakukaku, after the Japanese name for the islands.

He followed that up last month with a scheme in which he would buy several of the islands from the family that owns them.

Fearing the mayhem that might create, the Japanese government intervened to say the nation would make the purchase, which inevitably set off vigorous objections from Beijing.

In quick succession this month, rival groups of activists, Chinese and Japanese, staged flag-waving landings on the islets, and patriotic Chinese demonstrators burned Japanese cars on the streets of several cities in China.

Taking sides?

This dispute is not a new one, but this year's flare-up comes at a time when nationalist passions may be harder to control.

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The disputed islands in East China Sea.

Ishihara's provocative behaviour is clearly calculated to influence national politics. Prime Minister Yoshihiko Noda is about to go to the polls, and Ishihara's son, Nobuteru, is secretary-general of the opposition Liberal Democratic Party.

A Japanese election in November would coincide with the Chinese Communist Party Congress, which is to meet for a once-in-a-decade leadership change later this year.

In Japan, this is not a time when any politician can afford to be seen as "soft on China." The same applies in reverse for any senior Chinese one aspiring to join the all-powerful Politburo Standing Committee.

It seems inconceivable that any of the parties to these island disputes would want to threaten their fragile economies by getting entangled in anything more than a skirmish.

But in the South China Sea, history does have a way of getting out of hand when the political climate favours extreme views over moderate ones.

If things were to unravel further there, Canada, like many countries, would feel a significant knock-on effect, as so much of our economic hopes are tied up in Asia.

In addition, Canada might not be considered as neutral as we might like to be seen.

In March, Prime Minister Stephen Harper announced a new agreement to strengthen military ties with Japan, while Defence Minister Peter Mackay has spoken about possible new agreements and a mini-base for Canada's navy in Singapore.

The aim, like these summer manoeuvres with RIMPAC, is no doubt to improve stability. However, should the region become more unstable, China will no doubt conclude that we have already taken sides.