China, U.S. seek to calm South China Sea tensions

Secretary of State Hillary Clinton attends the 2nd East Asia Summit (EAS) Foreign Ministers' meeting at the office of the Council of Ministers in Phnom Penh July 12, 2012. REUTERS/Samrang Pring

By Arshad Mohammed and Martin Petty | Reuters – july, 12, 2012

PHNOM PENH (Reuters) - The United States and China signaled a willingness on Thursday to work together on "sensitive issues" in a move to cool tensions between rival claimants to the potentially oil-rich and increasingly militarized South China Sea.

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

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, U.S. Secretary of State Hillary Clinton stressed the importance of U.S.-China cooperation in regional institutions.

"The United States and China not only can, but will work together in Asia," she told reporters ahead of a meeting with Yang on the sidelines of a regional forum in the Cambodian capital, Phnom Penh.

Earlier, Clinton called on all parties to refrain from issuing threats, and advocated all-party dialogue to address rival claims to the waters, a potential military flashpoint.

Her stance was likely to upset Beijing which wants to take a bilateral approach to resolving the row.

In a text released by the State Department, Clinton said all parties should resolve disputes "without coercion, without intimidation, without threats, and without use of force".

Attempts to solve the problems bilaterally, she added, "could be a recipe for confusion and even confrontation".

The pledges by China and the United States to cooperate could cool tempers for now, but 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

Proven and undiscovered oil reserve estimates 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 (ASEAN) 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.

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

China has sought to keep the disputes out of the five days of ASEAN meetings, offering a mix of conciliatory words while ramping up the rhetoric in Beijing.

A commentary in Tuesday's overseas edition of the Communist Party mouthpiece, the People's Daily, said efforts by Vietnam and the Philippines to tackle the issue in Phnom Penh were tantamount to "international kidnapping" and warned of "calamity".

ASEAN foreign ministers have been joined in Phnom Penh by their counterparts from China, the United States and the European Union.

(Editing by Jason Szep and Jeremy Laurence)