China Wants Sea Spat Off Asean Agenda as Clinton Urges Talks

China warned nations to avoid mentioning territorial disputes with the Philippines and Vietnam at a security meeting this week, rebuffing U.S. Secretary of State Hillary Clinton’s call for talks on the issue.

Clinton indicated yesterday the U.S. would raise concerns over the South China Sea during meetings in Phnom Penh, Cambodia, where envoys from 26 Asia-Pacific countries and the European Union meet tomorrow. Speaking at a press conference in Hanoi with Vietnam’s Foreign Minister Pham Binh Minh, Clinton called competing claims in the waters a “critical issue.”

The Asean meetings are “not an appropriate venue for discussing the South China Sea,” Foreign Ministry spokesman Liu Weimin told reporters in Beijing yesterday, in response to a question over U.S. concerns about a code of conduct in the waters. “Intentional stirring up of the issue is ignoring the nations striving for development, intentionally kidnapping the relationship between China and Asean.”

The diplomatic sparring reflects concern over China’s move last month to develop disputed areas of the South China Sea with oil and gas reserves that Hanoi’s leaders already awarded to companies including Exxon Mobil Corp. (XOM) and OAO Gazprom. Vietnam and the Philippines reject China’s map of the waters as a basis for development, and have sought a regional solution to increase their bargaining power with Asia’s biggest military spender.

Photographer: Andrew Harrer/Bloomberg

U.S. Secretary of State Hillary Clinton. Close

U.S. Secretary of State Hillary Clinton.

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Photographer: Andrew Harrer/Bloomberg

U.S. Secretary of State Hillary Clinton.

Vietnam Role

Chinese Foreign Minister Yang Jiechi told Japanese counterpart Koichiro Gemba that he hopes Japan will appropriately handle problems in the bilateral relationship, the official Xinhua News Agency reported, citing Yang speaking at a meeting in Phnom Penh, Cambodia.

China won’t accept Japan’s objections over a “routine” patrol it sent to the Diaoyu Islands, Foreign Ministry spokesman Liu Weimin told reporters in Beijing today. The island chain, known as the Senkaku in Japanese, is claimed by both Tokyo and Beijing.

Clinton arrived in Phnom Penh today to hold meetings with Asean nations and attend the security meeting tomorrow. She visited Vietnam before the meetings in part to get a sense of the government’s posture and thinking about the South China Sea, according to a State Department official who was not authorized to speak on the record.

“The United States appreciates Vietnam’s contributions to a collaborative diplomatic resolution of disputes and a reduction of tensions in the South China Sea,” Clinton said in Hanoi. The U.S. looks “to Asean to make rapid progress with China towards an effective Code of Conduct.”

Engaging China

Asean countries, including four with claims in the South China Sea, reached an agreement two days ago on rules for operating in the waters and will seek talks with China. The Philippines called for an enforceable code of conduct during a meeting of envoys from Asean, China, Japan and South Korea, according to a statement citing Foreign Affairs Secretary Albert del Rosario.

“This expression of hope is not alien to us, nor should it come as a surprise,” he told the meeting, according to the statement.

Asean has achieved a “milestone” because all countries are now committed to agree to a legally binding code of conduct, according to Secretary-General Surin Pitsuwan. Last year, Asean and China agreed on guidelines to implement a non-binding agreement signed in 2002.

The 2002 Asean-China statement calls on signatories to avoid occupying disputed islands, inform others of military exercises and resolve territorial disputes peacefully. The eight guidelines approved last year say activities in the sea should be step-by-step, on a voluntary basis and based on consensus.

Easing Anxiety

“The fact that it’s on the right track it’s already lessening the anxiety of the international community and of the regional states that there could be some potential conflicts and tension in the region,” Surin told reporters in Phnom Penh today.

Vietnam Oil & Gas Group, also known as PetroVietnam, called on China National Offshore Oil Corp., the government-owned parent of Cnooc Ltd. (883), to cancel an invitation for foreign companies to explore nine blocks in the South China Sea. Chinese vessels last year cut the cables of a PetroVietnam survey ship and chased away a boat in waters delimited by the Philippines.

While the U.S. remains concerned about the South China Sea, Clinton’s comments appear to be softer than in previous years, according to Gary Li, head of marine and aviation forecasting at Exclusive Analysis Ltd., a London-based business advisory firm.

The U.S. is “not as forwardly anti-China as last time round,” he wrote in an e-mail. That combined with “the lack of any bilateral mechanisms in the code of conduct will mean there will be little change in China’s posture on the South China Sea.”

To contact the reporters on this story: Daniel Ten Kate in Phnom Penh at dtenkate@bloomberg.net; Nicole Gaouette in Hanoi at ngaouette@bloomberg.net

To contact the editor responsible for this story: John Brinsley at jbrinsley@bloomberg.net

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