China Agrees to Asean Sea Talks Amid Philippines Warning

Photographer: Roslan Rahman/AFP/Getty Images

Wang Yi, China's foreign minister, center, listens during a ASEAN-China Ministerial Meeting in Brunei's capital Bandar Seri Begawan on June 30, 2013. Close

Wang Yi, China's foreign minister, center, listens during a ASEAN-China Ministerial... Read More

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Photographer: Roslan Rahman/AFP/Getty Images

Wang Yi, China's foreign minister, center, listens during a ASEAN-China Ministerial Meeting in Brunei's capital Bandar Seri Begawan on June 30, 2013.

China agreed to talks with Southeast Asian nations on a set of rules to avoid conflict in the South China Sea, winning praise from diplomats even as the Philippines warned of increased “militarization” of the waters.

Talks on a code of conduct between China and the 10-member Association of Southeast Asian Nations will begin in September, according to a joint statement released after the two sides met in Brunei yesterday. The move represents a reversal from a year ago, when Asean failed to show a united front amid Chinese pressure to avoid discussing the topic at regional meetings.

“China and Asean countries are close neighbors and we are like members of one big family,” China Foreign Minister Wang Yi told reporters. “We believe that a united, prosperous and dynamic Asean that seeks greater strength through unity is in China’s strategic interest.”

China had resisted the talks as competition for oil, gas and fish in the waters increased tensions with fellow claimants including the Philippines, which has boosted military ties with the U.S. and Japan. Secretary of State John Kerry is in Brunei today to attend the annual meetings after holding talks with Palestinian and Israel leaders.

The Philippines said yesterday “the massive presence of Chinese military and para-military ships” around two land features it claims in the South China Sea posed “threats to efforts to maintain maritime peace and stability in the region.” At the same time, the country backs Asean’s bid for a binding code of conduct, it said in a statement.

Situation ‘Stable’

Wang, in his first Asean meeting as foreign minister since President Xi Jinping took office in March, called the overall situation in the South China Sea “stable.” He pledged to upgrade an Asean-China trade agreement and “push forward” talks on the Regional Comprehensive Economic Partnership, which includes Asean, China and five other Asia-Pacific countries.

Two years ago, Asean and China approved guidelines to implement the 2002 agreement that called on countries to avoid occupying disputed islands, inform others of military exercises and resolve territorial disputes peacefully. Since then, China had rebuffed Asean’s efforts to start talks on a code of conduct, saying it would only do so “when conditions are ripe.”

The U.S.’s declared interest in maintaining freedom of navigation in the waters has irked China, which prefers solving the disputes through direct dialogue with claimants. U.S. officials have repeatedly called for China and Asean to agree on a code of conduct, most recently Secretary of Defense Chuck Hagel in a visit to Singapore in early June.

‘Enduring Presence’

Kerry’s visit to the region gives the U.S. another chance to assure its allies that its military shift to the region is sustainable, even as it faces as much as $500 billion in defense budget cuts over nine years, and to tell China that what has become known as the “Asia pivot” is not about containing its strategic aspirations.

The U.S. would preserve its greater engagement in Asia, Kerry told Asean leaders after arriving in Brunei today. “We take our Pacific responsibilities and our partnerships seriously, and we will continue to build an active and enduring presence in every respect,” Kerry said. “But I want to emphasize importantly our actions are not intended to contain or to counterbalance any one country.”

‘Strategic Misjudgment’

President Benigno Aquino’s government last week said it’s crafting an agreement that would give the U.S. military access to Subic Bay. The Philippines needs allies to help with security or “bigger forces will bully us,” Defense Secretary Voltaire Gazmin said on June 28.

Last week, Wang said that moves by countries to rely on “external forces” to push territorial claims are “futile and will eventually prove to be a strategic misjudgment where the loss will outweigh the gain.” Yesterday he took a softer tone, while saying that China has abided by the provisions of the non-binding 2002 agreement to keep peace in the waters.

“China will continue to properly handle its specific differences with some countries through friendly consultations,” Wang said.

Speaking alongside him as Asean’s representative, Thai Foreign Minister Surapong Tovichakchaikul hailed the bloc’s “strong” relationship with China. Talks on a code of conduct are “a process that needs time, patience and prudence,” Surapong said.

China’s Map

Singapore Foreign Minister K. Shanmugam said that non-claimants like the city-state can’t get involved in determining which countries own certain features, adding the talks are a positive step.

“This has been something that many countries have been asking for,” Shanmugam told reporters. “Let’s not get away with the impression that, therefore, we’re all going to have an agreement very soon. But the important thing is we’ve agreed on a start date, and hopefully that sets the tone.”

Vietnam and the Philippines reject China’s map of the waters as a basis for joint development, a solution pushed by China. China National Offshore Oil Corp. estimates the South China Sea may hold about five times more undiscovered natural gas than the country’s current proved reserves, according to the U.S. Energy Information Administration.

Cables Cut

An oil research vessel said to be owned by Shanghai Offshore Petroleum Co., a unit of Sinopec, entered Japan’s exclusive economic zone near disputed islands in the East China Sea in June without giving prior notice to the Japanese government, the Sankei newspaper reported today, citing the Japan Coast Guard. A call to Sinopec’s Beijing office by Bloomberg News was unanswered before business hours.

Since 2010, China has cut the cables of survey ships working for Vietnam, chased away an exploration vessel near the Philippines and sent its first deep-water drilling rig to the region. Last year, China National Offshore invited bids for exploration blocks that Vietnam had already awarded to companies including Exxon Mobil Corp. (XOM) and OAO Gazprom.

While core disputes over territory remain, Asean ministers are unified on the need for a code of conduct, Indonesian Foreign Minister Marty Natalegawa said. The Philippines has sought international arbitration to settle disputes, saying that direct talks with China have failed to stem tensions.

“The common position is to try to resolve these issues through dialogue,” Natalegawa told reporters yesterday. “The code of conduct will keep things orderly so that we can have conditions conducive for these negotiations to take place.”

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

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