Bloomberg News

Clinton Warns of Sea Clashes as China Delays Talks Over Rules

July 12, 2012

‘Good Neighbor’ China Pushes Asean for Joint Development in Seas

Children play next to supplies of the the fishing boats where a former Philippine Marine officer and his volunteers were to set sail for the disputed Scarborough shoal. Photograph: Ted Aljibe via AFP/GettyImages

U.S. Secretary of State Hillary Clinton warned of more confrontations in the South China Sea without a region-wide solution as China rebuffed calls to expedite talks on rules for operating in disputed waters.

“Issues such as freedom of navigation and lawful exploitation of maritime resources often involve a wide region,” Clinton said in remarks today to Asia-Pacific foreign ministers during a meeting in Phnom Penh, Cambodia. “Approaching them strictly bilaterally could be a recipe for confusion and even confrontation.”

Vice Foreign Minister Fu Ying yesterday said China would start talks on a legally binding code of conduct in the South China Sea “when conditions are ripe,” according to the official Xinhua News Agency. It warned nations this week to avoid mentioning the territorial spats with Vietnam and the Philippines at today’s regional security meeting that includes envoys from 26 Asia-Pacific nations and the European Union.

Diplomatic squabbling between the U.S. and China escalated after Clinton’s remarks in Mongolia this week in which she criticized governments that lock up dissidents and hinder freedom of speech. The Communist Party’s People’s Daily newspaper today blasted U.S. “arrogance” in commenting on human rights and democracy in Asia.

U.S. ‘Preacher’

“If the U.S. always shows up as a preacher, and always picks on democracy in Asia by standing high and looking down, or if it even wants to raise its flag to build a ‘team’ that can balance China’s development, it will ultimately make itself marginalized,” the editorial said.

The U.S. and the 10-member Association of Southeast Asian Nations, after a meeting yesterday, called for the “early conclusion” of a code of conduct that complies with the United Nations Law of the Sea, according to a statement. The summary of a separate meeting between Asean states and Chinese Foreign Minister Yang Jiechi didn’t mention the code of conduct.

“It is China’s consistent position that disputes over the sovereignty of some islands and delimitation of some waters in the South China Sea should be peacefully settled by the parties directly concerned through negotiations,” spokesman Zhang Jianmin told Xinhua yesterday. “Pending the settlement of the disputes, the parties concerned may put aside their differences and engage in joint development.”

Territorial Disputes

The Philippines and Vietnam reject China’s map of the waters as a basis for joint development and have sought a regional solution to increase their bargaining power with Asia’s biggest military spender. Clinton has urged the countries to define their territory based on the UN Law of the Sea, a move China has resisted because it may lead to a loss of some waters it now claims.

Vietnam Oil & Gas Group (PVD), known as PetroVietnam, last month called for China National Offshore Oil Corp., the government- owned parent of Cnooc Ltd., to cancel an invitation for foreign companies to explore nine blocks that overlap with areas awarded to Exxon Mobil Corp. (XOM:US), Moscow-based OAO Gazprom and India’s Oil & Natural Gas Co. The Philippines has urged Asean to take a position on its two-month standoff earlier this year with China over a disputed reef known as the Scarborough Shoal in the Philippines and Huangyan Island in China.

Chinese vessels last year cut the cables of a PetroVietnam survey ship and chased away a boat in waters delimited by the Philippines. The region is estimated to have as much as 30 billion metric tons of oil and 16 trillion cubic meters of gas, which would account for about one-third of China’s oil and gas resources, according to Xinhua. China had 2 billion tons of proven oil reserves and 99 trillion cubic feet of natural gas reserves in 2010, according to BP Plc estimates.

China, Japan

China has also clashed with Japan over a disputed island chain known as Diaoyu in Chinese and Senkaku in Japanese, where both countries have sent patrol boats in recent weeks. Yang told Japanese counterpart Koichiro Gemba yesterday in Phnom Penh that he hopes Japan will appropriately handle problems in the bilateral relationship, Xinhua reported.

In a visit to Tokyo this week, Clinton sought clarity on a report that Japan’s government planned to buy the islands, prompting an angry response from China. Prime Minister Yoshihiko Noda said he would continue to brief her on Japan’s plans, according to a State Department official who wasn’t authorized to speak on the record.

The U.S. interest in the South China Sea is based on the importance of freedom of navigation in the 1.2 million-square- mile body of water that links the Pacific and Indian oceans, Clinton said today. China has denied its actions threaten freedom of navigation.

“We believe the nations of the region should work collaboratively and diplomatically to resolve disputes without coercion, without intimidation, without threats, and without use of force,” Clinton said.

China Military

The U.S. Defense Department noted in a 2009 report that China’s growing military strength strength increases “Beijing’s options for military coercion to press diplomatic advantage, advance interests, or resolve disputes in its favor.” Chinese military spending in 2011 is more than double that of Asean countries combined, according to the National Bureau of Asia Research, a Washington policy group. In 1990, the two budgets were almost equal.

Last year, Asean and China agreed on guidelines to implement a non-binding agreement signed in 2002. That deal calls on signatories to avoid occupying disputed islands, inform others of military exercises and resolve territorial disputes peacefully.

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

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


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