Asean Splits between US and China over South China Sea

The Association of Southeast Asian Nations failed to reach consensus on handling disputes in the South China Sea, reflecting a rift between China and the U.S. over rules to keep peace in the trade lane.

Cambodia, which holds the group’s rotating chairmanship, rejected a compromise on the wording of a joint communique among the other nine members in Phnom Penh, according to Sihasak Phuangketkeow, Thailand’s top foreign ministry bureaucrat. The bloc’s inability to agree on a communique is unprecedented, Indonesian Foreign Minister Marty Natalegawa said.

The squabbling underscores growing unease among the Philippines and Vietnam over China’s assertiveness in disputed waters that may contain oil and gas reserves. China this week rebuffed U.S. calls to quickly complete a code of conduct for the seas as Secretary of State Hillary Clinton warned more clashes are likely without a region wide deal.

Oil, Gas

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 China’s official Xinhua News Agency. 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.

The Philippines wanted the meeting’s communique to mention a two-month standoff with Chinese vessels over a disputed reef known as Scarborough Shoal in the Philippines and Huangyan Island in China. In the security meeting of 26 Asia-Pacific nations and the European Union yesterday, Philippine Foreign Secretary Albert del Rosario denounced “pressure, duplicity, intimidation” from China and warned that tensions “could further escalate into physical hostilities that no one wants.”

‘Unfair Accusation’

Cambodian Foreign Ministry official Kao Kim Hourn rebuffed criticism that his nation was under pressure from China, calling it an “unfair accusation.”

China warned nations this week to avoid mentioning the territorial spats during the Asean meetings and repeated calls for joint development. Vice Foreign Minister Fu Ying two days ago said China would start talks with Asean on a legally binding Code of Conduct in the South China Sea “when conditions are ripe,” according to Xinhua.

Conduct Code

After the security meeting, Chinese Foreign Minister Yang Jiechi urged the Philippines to avoid making trouble, Xinhua reported. He reiterated control over the disputed reef and said Chinese people were shocked and surprised when the Philippines confronted its vessels, the report said, citing Yang.

Asean’s discord over the communique “could enhance the prospects for reaching agreement” on a Code of Conduct because China “is less likely to feel that all the Asean member statesare ganging up against it,” Robert C. Beckman, director of the Center for International Law at the National University of Singapore, wrote in an e-mail. Key issues will be whether Asean can reach consensus “and remain united on those principles during the negotiations with China,” he said.

Clinton downplayed the risk of conflict with one of the U.S.’s biggest trading partners and stressed ways to cooperate with China in the region. U.S.-China commerce totaled $503 billion in 2011, more than double the combined $194 billion traded with Indonesia, Thailand, the Philippines, Malaysia, Vietnam and other Asean nations, according to the U.S. Census Bureau.

U.S.-China Talks

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 on 11 July. China has denied its actions threaten ships passing through the waters.

Regional Solution

Vietnam and the Philippines, a U.S. ally, 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 Petro Vietnam, 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), Moscow-based OAO Gazprom and India’s Oil & Natural Gas Co.