US, China face off over sea dispute; Wen Jiabao rebuffs Barack Obama

Nusa Dua, Indonesia - 20 Nov 2011 (Reuters): TheUnited Statesand China faced off on Saturday over the thorny issue of how to resolve competing claims by Asian countries to sovereignty of the South China Sea, the latest point of friction between the two powers.

PresidentBarack Obamatold Chinese Premier Wen Jiabao, who indirectly warned Washington on Friday to stay out of the dispute, that the United States wanted to ensure the sea lanes were kept open and peaceful. Tensions flared earlier this year with often tense maritime stand-offs between claimants, including China, to a sea that carries some $5 trillion a year in world trade. An Australian thinktank warned in June the tensions could spark a conflict that could draw in the United States and other powers.

The two leaders met on the resort island of Bali, Indonesia, on the sidelines of the East Asia Summit, a gathering of 18 countries with diverse political and cultural backgrounds but which seeks to boost political and security cooperation.

Vietnam, the Philippines,Taiwan, Malaysia and Brunei all have claims to parts of the South China Sea, while China claims large parts of the region, which might hold rich deposits of oil and gas.

The Southeast Asian countries along with the United States and Japan are pressuringBeijingto try to seek some way forward on the knotty issue of sovereignty, prompting Wen on Friday to warn "outside forces" to stop interfering, a veiled reference to Washington and Tokyo.

The impasse is largely over how any talks should be conducted.

China wants to hold bilateral talks with other countries that claim parts of theSouth China Seaas their territory, but the Southeast Asian claimants, the United States and Japan are pushing for a multilateral approach.

"It ought to be resolved through friendly consultations and discussions by countries directly involved. Outside forces should not, under any pretext, get involved," Wen told a meeting with Southeast Asian leaders on Friday, several of whose countries claim sovereignty to parts of the South China Sea.

Wen's comments were carried on the Chinese Foreign Ministry's website (www.mfa.gov.cn).

US Secretary of State Hillary Clinton earlier this week urged claimants to the South China Sea not to resort to intimidation to back their claims, itself an indirect reference to China.

Obama has been lower key as far as public comments are concerned. But he told the leaders of India, the Philippines, Indonesia and Malaysia in bilateral meetings in Bali that maritime issues should be discussed at the summit.

TheWhite Housesaid that Obama and Wen also discussed long-festering economic issues, such as China's currency policy. U.S. lawmakers have long argued Beijing keeps the value of the yuan down to help drive the country's exports engine, a stance they say that costs American jobs.

"It was a good engagement," said Tom Donilon, Obama's top national security adviser.

INFLUENCE The exchanges between the United States and China over the South China Sea are the latest barbs between the two countries as Obama sought in recent weeks to reassert a US presence in the Asia-Pacific to counter the growing clout of the world's second-largest economy, China.

Obama said in Australia on Thursday, on his last stop before jetting to the Asia meetings in neighbouring Indonesia, that the US military would expand its Asia-Pacific role, declaring America was "here to stay" as a Pacific power.

Days earlier, as host of the Asia Pacific Economic Co-Operation forum in Hawaii, Obama had voiced growing frustration at China's trade practices. He declared "enough is enough" as he pushed for a new Asia-Pacific trade deal with some of Beijing's neighbours.

The moves are seen as an attempt to reassert US leadership in the face of China's rising influence around the Pacific Rim and reassure allies such as South Korea and Japan that it would remain a strong counterweight. Obama also announced on Friday that he would send Secretary of States Hillary Clinton next month to Myanmar, which has drawn closer to China in reaction to Western sanctions, the first such trip to the isolated country in half a century.

That will add to some fears in Beijing of encirclement in the Asia Pacific as the United States increases its footprint in the region.

CLAIMS China's claims over the South China Sea is by far the largest, forming a U-shape over most of the sea's 648,000 square miles (1.7 million square kms), including the Spratly and Paracel archipelagos. The United States has irked China by declaring a national interest at stake in the South China Sea by ensuring the freedom of navigation and trade.

Estimates of proven and undiscovered oil reserves in the South China Sea range from 28 billion barrels of oil to as high as 213 billion barrels, U.S. figures showed in 2008. Gas deposits could be as high as 3.8 trillion cubic metres.

Both could supply China with energy for decades. The Philippines has called for greater unity among Southeast Asian nations with claims in their stand against China. A strong position from the United States in support of open talks could embolden such unity.

White House says relationship 'complicated'

The United States has been direct with China about its plans to be more active in the Asia-Pacific region as well as its interests in the South China Sea, a top White House official said on Saturday.

National Security Adviser Tom Donilon said US President Barack Obama and Chinese PremierWen Jiabaotalked mainly about economic issues when they met on the sidelines of an Asian leaders' summit on the Indonesian island of Bali on Saturday.

Donilon said Wen had requested more time to speak with Obama after the two leaders sat next to each other during an official dinner on Friday.

"They had an informal meeting this morning and the principal focus of the meeting was on economics," he told reporters on Saturday, the last day of Obama's nine-day Asia-Pacific tour.

Obama and Wen discussed "specific issues around business practices" as well as U.S. concerns about controls on China's yuan currency and its desire to see Beijing adhere more closely to international norms and rules, the US official said.

The two leaders also touched on the sensitive issue of the South China Sea. Donilon said the United States was not trying to play judge in territorial disputes over those waters but wanted to see the shipping lane remain open.

"We don't have a claim, we don't take sides in the claims, but we do as a global maritime power have an interest in seeing these principles applied broadly," he said.

Over the course of his trip to Hawaii, Australia and Indonesia, Obama has ruffled Chinese feathers with tough language on trade and plans to increase the US military presence in Australia so it can respond faster to maritime disputes and other emergencies in the region.

On Saturday, Donilon sought to play down tensions in the US-China relationship, which he said was on the whole was "productive and constructive".

He said the United States had been "quite direct with the Chinese about our strategy" and that Beijing understood Washington was serious about sustaining a more active presence in the region to help ensure its stability and peace.

"Our partners and allies look to us for that reassurance. They want to know that the United States is going to play the role it has played with respect to security and reassurance and balancing and stability here," Donilon said.

Donilon also stressed that Washington is continuing to engage directly with China on many economic and other themes.

"We have a very complicated and quite substantial relationship with China across the board," he said.

"We are ... in an important conversation with them about economics which we think is important for the region and important for the United States."

China rebuffs USChina pushed back on Saturday against a week of US pressure to resolve a rancorous dispute over territorial claims in the South China Sea, a crucial, mineral-rich commercial shipping lane at the heart of growing tensions among Asian leaders.

Chinese Premier Wen Jiabao chastised President Barack Obama for raising the issue during an Asia-Pacific leaders summit, hours after Obama told Wen the United States wants the sea lanes kept open and peaceful, capping two weeks of Sino-US tensions.

Vietnam, the Philippines, Taiwan, Malaysia and Brunei all have claims to parts of the sea lanes, while China claims large parts of the region, which might hold rich deposits of oil and gas.

Obama ended a nine-day trip with a meeting with Wen where, according to US officials, he raised US concerns over festering economic issues such as China's currency policy, after huddling with Asian leaders in a concerted effort to court the world's fastest-growing region.

US lawmakers have long argued Beijing keeps the value of the yuan down to help drive the country's exports engine, a stance they say costs American jobs.

Wen defended Beijing's currency stance, stressing that from late September to early November, offshore foreign exchange markets showed "expectations of a depreciation in the renminbi exchange rate" and that China will also strengthen the renminbi's trading flexibility in either direction, without elaborating.

But it was Obama's comments on the South China Sea, a possible flashpoint in Asia, that drew Beijing's ire.

Wen said the South China Sea issue should be resolved directly among related sovereign countries "through friendly consultation and negotiation," state-owned news agency Xinhua reported, a comment that suggests U.S. exclusion from the dispute.

He added that the East Asia Summit on the Indonesian island of Bali, where Obama met with 17 Asia-Pacific leaders in three days of talks, was not "a proper occasion" to discuss the issue.

Still, a briefing by a US official said 16 leaders present at the summit addressed maritime security. Indeed, the bulk of the discussions were a "very robust" conversation on maritime security and the South China Sea, the official said.

"The Chinese will come away from the meeting believing that a heavy-handed approach on the south china sea will backfire badly," said the official.

But Xinhua, in an English language commentary, warned that "any attempt by outside forces to internationalize the issue will only make it more complicated and undermine peace and stability in the region," in a veiled reference to the United States.

Tensions flared earlier this year with often tense maritime stand-offs in the sea that carries some $5 trillion a year in world trade. US Secretary of State Hillary Clinton earlier this week warned claimants against using intimidation to back their claims, an indirect reference to China.

An Australian think tank warned in June that risk-taking behavior of the Chinese military, the resource needs of the fast-growing economy and its greater assertiveness raised tensions and could spark a conflict that could draw in the United States and other powers.

China wants to hold bilateral talks with other countries that claim parts of the South China Sea as their territory, but the Southeast Asian claimants, the United States and Japan are pushing for a multilateral approach.

The United States had been "quite direct with the Chinese about our strategy," said Tom Donilon, Obama's top national security adviser.

Beijing understood that Washington was serious about sustaining a more active presence in the region to help its stability and peace, he said.

"Our partners and allies look to us for that reassurance. They want to know that the United States is going to play the role it has played with respect to security and reassurance and balancing and stability here," he said.

Still, he said Washington was pursuing deep engagement with China to manage a range of U.S.-Chinese issues.

"We have a very complicated and quite substantial relationship with China across the board," he sai d, adding that while the United States does have "economic issues" with Beijing, "our relationship with China has in the main been productive and constructive."

INFLUENCE

The summit capped two weeks of a hard diplomatic push by Obama to reassert America's footprint in the Asia Pacific, which will fuel China's fear of being encircled, or contained by the United States and its allies.

However, Obama on Thursday acknowledged China's unease, pledging to seek greater cooperation with Beijing. And Clinton told America's ABC television: "It's not about countering anybody else's power. It's about asserting our own position as a Pacific power."

On Thursday, Obama said in Australia that the U.S. military would expand its Asia-Pacific role, declaring America was "here to stay" as a Pacific power.

Days earlier, as host of the Asia Pacific Economic Co-Operation forum in Hawaii, Obama had voiced growing frustration at China's trade practices. He declared "enough is enough" as he pushed for a new Asia-Pacific trade deal with some of Beijing's neighbors.

However, China has adopted a largely restrained response to the expansive moves by Washington.

"The US has been an important player in Asia ever since the Second World War. We are looking forward to cooperating with them, with the U.S., in the region," China's Assistant Foreign Minister Liu Zhenmin told reporters in Bali.

Obama also announced on Friday that he would send Clinton toMyanmarnext month, which has drawn closer to China in reaction to Western sanctions.

It will be the first such trip to the isolated country in half a century and will add to Beijing's fears of encirclement.

source: Reuters