Tensions between the U.S. and China reverberate across the region, and are often focused on America's support of the island of Taiwan, which Beijing claims sovereignty over.
Conflicting territorial claims over the South China Sea have also been a historic source of regional concern.
More recently, the U.S. has been vocal in blaming China for a number of perceived grievances including currency manipulation and launching cyber-attacks that steal critical data from American government agencies and private companies.
Panetta said U.S. and Chinese leaders have talked about developing teams that can work together on difficult issues, including how they can exchange information on computer-based threats and whether they can agree on standards for the use of cyber capabilities.
The key, Panetta said, is for the both countries to develop the ability to communicate when disputes arise so that they can be resolved peacefully.
Defense experts attending the conference peppered Panetta with questions about China, including one from a member of China's People's Liberation Army.
Officials also noted that Beijing did not send any of its senior leaders to the confab. It was not clear why, although some officials suggested that China's leaders were busy with internal issues.
Questioners asked whether adding more U.S. military to the region might embolden some smaller nations and risk triggering more conflicts. And they wondered aloud whether China's leaders boycotted the conference in protest over America's beefed up strategy for the region.
"I don't think we should take the attitude that just because we improve their capabilities that we're asking for more trouble," said Panetta.
Panetta also issued a strong call for Asian nations to set up a code of conduct, including rules governing maritime rights and navigation in the South China Sea, and then develop a forum where disputes can be settled.
"It isn't enough for the United States to come charging in and try and resolve these issues," said Panetta, adding that the Asian nations must develop ways to peacefully solve their own problems.
Increased U.S. Military Presence In The Region
Panetta's speech was designed to give a more detailed explanation about the U.S.'s new defence strategy, which puts more focus on the Asia-Pacific, including plans to increase the number of U.S. military personnel, warships and other assets in the region over the next several years.
Specifically, he said that by 2020, about 60 percent of the fleet will be assigned there as part of a new strategy to increase Washington's presence in Asia.
Currently, the navy has about 285 ships, with roughly half assigned to each coast, but that total may decline a bit as some ships are retired in the coming years and may not be replaced.
The fleet includes 11 aircraft carriers, with six assigned to the Pacific. The West Coast total is expected to go down to five, but Panetta said Saturday he will maintain six carriers in the Pacific, over the long term.
While noting it may take years to complete the transition, Panetta assured his audience at the conference in Singapore that U.S. budget problems and cutbacks would not get in the way of changes.
He said the Defense Department has money in the five-year budget plan to meet those goals.
Panetta announced he is looking forward to visiting China later this year, adding that he wants to see the U.S. and China deepen their military ties, including on counter-drug programs and humanitarian aid.
Senator John McCain, who was attending the conference, questioned Panetta's optimism about relations with China, but said he hopes it works out.
He added that the Pentagon must begin planning for the possibility that another $500 million may have to be slashed from the defence budget early next year if lawmakers can't agree on spending cuts in the next several months.
Panetta has said he believes Congress will eventually find a way to avoid the automatic cuts.
Singapore is Panetta's second stop on a nine-day trip through Asia. He was in Hawaii on Thursday and is expected to travel to Vietnam and India.
Intellpuke: You can read this Associated Press article, filed from Singapore, in context here: www.guardian.co.uk/world/2012/jun/02/leon-panetta-china-asia-pacific