Nearly 7,000 US and Philippine troops staged combat maneuvers, involving the mock retaking of a small resource-rich island in the disputed waters of the South China Sea, on Wednesday, escalating tensions with between the U.S and Beijing.

The South China Sea drill, though held annually, has raised tensions among the U.S., the Philippines and China, as it coincided with growing maritime disputes between Manila and Beijing over the disputed Scarborough Shoal, a group of islands and reef that are located near the Philippines' Luzon Island.

Both the People's Republic of China and the Republic of China (Taiwan) claim ownership of the shoal, and since 1997, the Philippines do as well.

The US-Filipino troops held the military exercises in the disputed region and ignored China's warnings last week that the drill could risk provoking an armed conflict.

However, Chinese Vice Foreign Minister Cui Tiankai said on Wednesday that China was committed to dialogue and diplomacy in order to resolve the dispute, Reuters reported.

We are certainly worried about the South China Sea issue, Cui told a news briefing in Beijing, adding that some people tried to mix two unrelated things, territorial sovereignty and freedom of navigation.

The Philippines downplayed the exercise, saying that they were meant to improve security, counter terrorism threats and support humanitarian and disaster response capabilities. Lieutenant General Juancho Sabban, the military commander for the western Philippines, said the drill with the U.S. troops simply means we want to work together to improve our skills.

Sabban stressed that the drills were not intended to target China. Never was China ever mentioned in our planning and execution. China should not be worried about Balikatan [shoulder-to-shoulder] exercises.

To ease tensions with Beijing, the Philippines removed a warship from the exercises, and it replaced it with a coast guard vessel to de-escalate the situation.

In apparent rejection of the Philippines' proposal for a diplomatic solution, China dispatched a military vessel to the South China Sea last week, according to the China Daily.

China's growing maritime influence in the region has neighboring nations like Brunei, Malaysia, Vietnam and Taiwan worried over territorial confrontations.

China claims almost the entire South China Sea, including what is recognized by the UN as the Exclusive Economic Zone, according to reports.

Beijing asserts that the islands and waters of the South China Sea, which Manila now calls the West Philippines Sea, were first discovered in the 13th century by a Chinese emperor. Though a Chinese spokesperson recently denied historical ownership as the reason for the claim, he maintained that China had indisputable sovereignty over all islands and waters in the South China Sea.

China has yet to hold high-level talks with the Obama administration over the Scarborough Shoal dispute.

The U.S. considers a modernized Chinese military a threat, and it has reassured allies that Washington would act to counterbalance China's growing influence on the South China Sea as part of its foreign policy known as the pivot to Asia policy,  which was developed in the aftermath of the wars in Iraq and Afghanistan.

In an article published in Foreign Policy titled America's Pacific Century, Secretary of State Hillary Clinton said in November that the future of politics will be decided in Asia.

In the next 10 years, we need to be smart and systematic about where we invest time and energy, so that we put ourselves in the best position to sustain our leadership, secure our interests, and advance our values, Clinton wrote. One of the most important tasks of American statecraft over the next decade will therefore be to lock in a substantially increased investment -- diplomatic, economic, strategic, and otherwise -- in the Asia-Pacific region.