China Agrees to Asean Talks on Sea Spat Amid Philippine Warning

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 today. 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 for more than two years 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 set to arrive in Brunei for security

meetings tomorrow after holding talks with Palestinian and

Israel leaders in the Middle East.

The Philippines said today “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.”

‘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.” Today 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 for the waters are “a process

that needs time, patience and prudence,” Surapong said. “I’m

confident that with the strong determination of all sides, the

negotiation process would not be prolonged.”

Start Date

Singapore Foreign Minister K. Shanmugam said that non-claimants like the city-state can’t get involved in determining

which countries own certain features. A rise in tensions

wouldn’t benefit China or Asean, he said, adding that the talks

are a positive step forward.

“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.”

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. 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.

China’s Map

Vietnam and the Philippines reject China’s map of the

waters as a basis for joint development, a solution pushed by

China and Malaysia. 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.

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 the core disputes over territory remain, Asean

ministers are unified on the need for a code of conduct,

Indonesian Foreign Minister Marty Natalegawa said. China prefers

to resolve the disagreements via direct negotiations, while the

Philippines seeks international arbitration.

“The common position is to try to resolve these issues

through dialogue,” Natalegawa told reporters after the meeting.

“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

China Agrees to Asean Talks on Sea Spat Amid Philippine Warning