The peaceful, side-by-side rise of China and India has been taken for granted in many quarters. But tensions between the two giants are mounting, and Washington would do well to take note. On June 8, New Delhi announced it would deploy two additional army divisions and two air force squadrons near its border with China. Beijing responded furiously to the Indian announcement, hardening its claim to some 90,000 square kilometers of Indian territory that China disputes.

To understand what the tussle is about, consider recent history: The defining moment in the Sino-Indian relationship is a short but traumatic war fought over the Sino-Indian border in 1962. The details of that conflict are in dispute, but the outcome is not: After a sweeping advance into Indian territory, China gained control over a chunk of contested Tibetan plateau in India's northwest but recalled its advancing army in India's northeast, leaving to New Delhi what is now the Indian state of Arunachal Pradesh. Relations have been characterized by mistrust ever since, but neither nation has shown any inclination to return to armed conflict.

In recent years however China has been raising the temperature at the border. Chinese claims to Arunachal Pradesh and frequent Chinese "incursions" into the nearby Indian state of Sikkim have begun to multiply in line with Beijing's rising economic and political influence. Moreover, unlike India, China has methodically developed its infrastructure along the disputed border, littering the barren terrain with highways and railways capable of moving large numbers of goods and troops.

For its part, New Delhi has become both increasingly aware of its disadvantage and exceedingly suspicious of China's intentions. India's June 8 announcement that it will deploy two additional army mountain divisions to the northeastern state of Assam will bring India's troop levels in the region to more than 100,000. The Indian Air Force, meanwhile, announced it will station two squadrons of advanced Sukhoi-30 MKI aircraft in Tezpur, also in Assam. They will be complemented by three Airborne Warning and Control Systems and the addition or upgrade of airstrips and advanced landing stations. This is part of a broader effort to bolster India's military and transportation infrastructure in its neglected northeast.

Upon hearing India's plans, Beijing became irate. The People's Daily, a Communist Party mouthpiece that serves as a window into the thinking of Beijing's insular leadership, published an exceptional broadside against New Delhi on June 11. It described India's "tough posture" as "dangerous," and asked India to "consider whether or not it can afford the consequences of a potential confrontation with China." China is not afraid of India, the editorial taunted, while mocking India for failing to keep pace with China's economic growth. The editorial reminded New Delhi that Beijing had friends in Pakistan, Sri Lanka and Nepal but most importantly, it left no doubt about Beijing's future position on Arunachal Pradesh: "China won't make any compromises in its border disputes with India."

This is not the first time China has lost its cool over the border issue. Back in 2006, China's Ambassador to India ignited a political firestorm when he declared the "whole state of Arunachal Pradesh is Chinese territory... we are claiming all of that. That is our position." Later, on two separate occasions, China denied visas to Indian officials from Arunachal Pradesh, explaining Chinese citizens didn't require visas to travel to their own country.

Generally coy about its suspicions, India has been turning up the diplomatic heat. Indian officials have been speaking more openly about their concerns with China of late. A growing chorus in New Delhi is arguing that India's uniform focus on Pakistan may be exposing it to a threat from the East. Indian officials have also accused China of supporting the Naxalites, a tenacious and growing band of Maoist insurgents Prime Minister Manmohan Singh has described as the "greatest threat to [India's] internal security."

China has been applying pressures as well. This March, China broke with Asian tradition and tried to block a $2.9 billion loan to India at the Asian Development Bank, furious that the loan would fund a $60 million flood-management program in Arunachal Pradesh. (Last week China was overruled with help from the U.S., and the loan went through.) Before that, Beijing clumsily attempted to torpedo the U.S.-India nuclear deal from its seat at the Nuclear Suppliers Group. And of course, China remains an opponent of India's bid to join the United Nations Security Council and a staunch ally of India's nemesis, Pakistan.

But what riles India most is China's incursion into its backyard and the belief China is surrounding the subcontinent with its "string of pearls" -- Chinese "investments" in naval bases, commercial ports and listening posts along the southern coast of Asia. There are port facilities in Bangladesh and radar and refueling stations in Burma. Thailand, Cambodia and Pakistan now all host Chinese "projects;" China's crown jewel is the Pakistani deepwater port of Gwadar.

Then there are Sri Lanka and Nepal, India's immediate neighbors, where civil wars have opened space for Beijing to peddle influence. A bloody insurgency by Maoist rebels in Nepal gave way in 2006 to power-sharing agreement now on the brink of collapse. China has openly supported the Maoists against the royalist establishment backed by India. In Sri Lanka, meanwhile, the decades-long civil war between the Hindu Tamil minority and the Buddhist Sinhalese majority was decisively ended by the latter May, but not before Beijing could gain a foothold in the island-nation. Appalled by the brutality of the fighting, India had scaled back its arms sales to Colombo in recent years. China happily filled the vacuum, in return gaining access to the port at Hambontota on the island's southern coast.

What is Washington's role in this Asian rivalry? In the short term, a priority must be to tamp down friction over the border. In the longer term, Washington should leverage its friendly relations with both capitals to promote bilateral dialogue and act as an honest broker where invited. But it should also continue to build upon the strategic partnership with India initiated by former president George W. Bush, and support its ally, as it did at the Nuclear Suppliers group and the ADB, where necessary. Washington must also make clear that it considers the established, decades-old border between the two to be permanent.

Most importantly, though, the Sino-Indian border dispute should be viewed as a test for proponents of China's "peaceful rise" theory. If China becomes adventurous enough to challenge India's sovereignty or cross well-defined red lines, Washington must be willing to recognize the signal and respond appropriately.