The ‘Cheonan’ incident has prodded and expedited the strategic comeback of the US in East Asia. The US offer to mediate the territorial disputes over islands and seabed minerals in the South China Sea at the ASEAN Regional Forum (ARF) meeting in July 2010 has provoked harsh criticism from the Chinese. This US diplomatic move appears to be a premeditated one to substantially diminish the influence of China in the region, to re-secure its own strategic forward military presence and to signal that it is not yet time for China to acquire absolute control over this critical waterway. The episode has rendered their mercurial relationship more problematic and makes the G-2 paradigm a fallacy.