U.S. urges China to open talks on South China Sea

By Arshad Mohammed and Martin Petty

PHNOM PENH | Thu Jul 12, 2012 4:08pm EDT

(Reuters) - The United States urged China to open talks with Southeast Asian nations on Thursday to calm tensions over their rival claims to the potentially oil-rich and increasingly militarized South China Sea.

1 of 5. Attendees clap their hands while posing for a photo before the 2nd East Asia Summit (EAS) Foreign Minister meeting at the office of the Council of Ministers in Phnom Penh July 12, 2012.

Credit: Reuters/Samrang Pring

While U.S. and Chinese officials sounded conciliatory notes as they met at an annual forum for regional foreign ministers, it remained unclear whether China was willing to seriously engage on rules of the road for the strategic waters.

Long-simmering tensions in the waters have entered a more contentious chapter this year as the six parties who claim the territory search deeper for energy supplies while building up their navies and defense alliances.

"No nation can fail to be concerned by the increase in tensions, the uptick in confrontational rhetoric, and disagreements over resource exploitation," U.S. Secretary of State Hillary Clinton told reporters.

"We have seen worrisome instances of economic coercion and the problematic use of military and government vessels in connection with disputes among fisherman," she added, echoing comments she made to her fellow ministers earlier in the day.

Clinton said any "code of conduct" for the South China Sea should create a framework for preventing and resolving disputes, saying that trying to settle matters bilaterally "could be a recipe for confusion and even confrontation".

Clinton, attending the Asean Regional Forum in the Cambodian capital of Phnom Penh, called on all parties to refrain from issuing threats, and advocated all-party dialogue to address rival claims to the waters.

"We now look to ASEAN and China to make meaningful progress toward finalizing this code," she said.

As he began talks with Clinton, Chinese Foreign Minister Yang Jiechi said Beijing was ready to work with Washington "to expand our common ground, respect each other, properly handle differences on sensitive issues, and push forward" relations.

Echoing Yang's conciliatory tone, Clinton said agreements to work together on climate change, disaster warning and response, energy policy and other matters showed that "the United States and China not only can, but will work together in Asia".

However, her stance on the South China Sea was likely to upset Beijing, which wants to take a bilateral approach to resolving the row.

A U.S. official said Yang had given Clinton a "careful indication" China was willing to work with Southeast Asian countries as a group on the proposed code. He said China had suggested to other countries it could start talks in September.

However, the maritime issue is extremely complex and sensitive, and could take years to resolve.

Beijing claims the South China Sea as its territory based on historical records and has said China has "indisputable sovereignty" over the area.

The Philippines and China only recently stepped back from a months-long standoff at the Scarborough Shoal, a horseshoe shaped reef in waters they both claim - the latest round of naval brinkmanship over the heavily trafficked waters.

The United States has stressed it is neutral in the long-running maritime dispute, despite offering to help boost the Philippines' decrepit military forces. China has warned that "external forces" should not get involved.

Vietnam, Malaysia, Brunei and Taiwan also lay claim to parts of the South China Sea.

CLAIMANTS SEEK CODE OF CONDUCT

Estimates of potential oil reserves in the area range as high as 213 billion barrels of oil, the U.S. Energy Information Administration said in a 2008 report. That would surpass every country's except Saudi Arabia and Venezuela, according to the BP Statistical Review.

U.S. President Barack Obama has sought to reassure regional allies that Washington would serve as a counterbalance to a newly assertive China in the South China Sea, part of his campaign to "pivot" U.S. foreign policy more intensely on Asia after a decade of war in Iraq and Afghanistan.

The United States says stability is its concern in the waterway, which carries $5 trillion in ship-borne trade, accounting for half the world's shipping tonnage.

The 10-state Association of Southeast Asian Nations bloc is seeking a maritime code of conduct for the seas and wants China to be involved in the consultation, but it has yet to commit to the process, which has so far been vague.

(Editing by Jason Szep and Jeremy Laurence)