deal prompted China to temporarily cut off military to military relations with Americans . This time , aside from some strong objections voiced by Beijing , Panetta said there has been no tangible action taken in response by China . `` I 've heard nothing that indicates that they 're taking any steps in reaction to that , '' Panetta said . Part of the reason might be the way the United States government handled the sales . `` It was something that the United States had announced but we had given the Chinese a heads up as to what was going to take place , '' Panetta said . `` I think in the end ... they handled it in a professional and diplomatic way and we appreciate that . '' The South China Sea , a body of water east of Vietnam , north of Malaysia and west of the Philippines , has been a source of regional tensions for decades . But because of recent discoveries of massive oil reserves as well as its importance to regional maritime and aviation navigation , tensions have increased recently . Many countries lay claims to the same parts of the
Bali , Indonesia -LRB- CNN -RRB- -- Defense Secretary Leon Panetta praised China on more than one occasion Sunday during a series of meetings with fellow defense ministers from southeast Asia , but hinted if relations between the United States and China worsen , it could be a threat to `` the security of the world . '' He said he appreciates China 's muted response to the United States announcing a deal last month to sell more arms to Taiwan , and he lauded China for working with its neighbors with regards to the contentious issues involving the South China Sea . `` I would commend them for the way that they 've handled the news of that sale to Taiwan , compared to the past , '' Panetta told reporters after a meeting with Indonesia 's defense minister Sunday in Bali . China regards Taiwan as a renegade province . Taiwan began as the remnant of the government that ruled over mainland China , until a Communist uprising proved victorious in 1949 . The $ 5.3 billion arms package , announced last month , includes upgrades to Taiwan 's F-16 fighter fleet . Last year , a similar