By Amy Sawitta Lefevre and Manuel Mogato

VIENTIANE, Sept 8 (Reuters) – Asian leaders played down
tensions over the South China Sea in a carefully worded summit
statement on Thursday, but even before it was issued Beijing
voiced frustration with countries outside the region
“interfering” in tussles over the strategic waterway.

The heads of 10 Southeast Asian nations, as well as U.S.
President Barack Obama and Chinese Premier Li Keqiang among six
other leaders, “reaffirmed the importance of maintaining peace,
stability, security and freedom of navigation in and over-flight
in the South China Sea.”

But the draft of a statement to be issued in Vientiane,
Laos, tiptoed around the regional strains caused by competing
claims to areas of the strategically important sea.

“Several leaders remained seriously concerned over recent
developments in the South China Sea,” said the draft.

The statement, seen by Reuters, made no reference to a July
ruling by a court in The Hague that declared illegal some of
China’s artificial islands in the sea and invalidated its claims
to almost the entire waterway.

Obama said on Thursday the ruling had helped clarify
maritime rights. “I recognize this raises tensions but I also
look forward to discussing how we can constructively move
forward together to lower tensions,” he said at a summit
meeting.

Officials said that talks on Wednesday between leaders of
the Association of Southeast Asian Nations (ASEAN) and China’s
Li had gone smoothly.

But in a statement later from China’s Foreign Ministry, Li
was paraphrased as saying China was willing to work with
Southeast Asian countries in “dispelling interference … and
properly handling the South China Sea issue.”

He did not elaborate, but such wording is typically used by
Chinese leaders to refer to not allowing countries from outside
the region with no direct involvement in the dispute, like the
United States, from getting involved.

China claims much of the South China Sea, through which more
than $5 trillion of trade moves annually. Taiwan and four ASEAN
members – Vietnam, the Philippines, Malaysia and Brunei – also
have claims, making it a hot spot of regional tension.

The other ASEAN nations are Cambodia, Indonesia, Laos,
Myanmar, Singapore and Thailand. Leaders from Australia, China,
India, Japan, New Zealand, Russia, South Korea and the United
States also attended the summit.

China has over the past year alarmed other claimants, and
outside powers such as the United States and Japan, by
re-claiming land on several disputed reefs through dredging, and
building air fields and port facilities.

Shattering an illusion of cordiality at the summit in Laos
on Wednesday, U.S. ally the Philippines released photographs and
a map showing what it said was an increased number of Chinese
vessels near the disputed Scarborough Shoal, which China seized
after a standoff in 2012.

Its defense ministry expressed “grave concern” that Chinese
boats were preparing to build structures at the shoal.

CLEARED THE AIR

The Philippines’ move came after a dispute with the United
States, its former colonial power. Ties turned frosty when new
President Rodrigo Duterte insulted U.S. counterpart Barack Obama
on Monday, prompting the cancellation of a meeting between them.

The two leaders made some steps towards clearing the air
late on Wednesday, however, chatting briefly, and exchanging
pleasantries as they prepared to take their seats at a leaders’
dinner.

The United States has been a staunch ally of the Philippines
and China has repeatedly blamed Washington for stirring up
trouble in the South China Sea.

Washington says it has no position on the territorial
disputes but wants to ensure freedom of navigation. To press
that point, it has conducted patrols near Chinese-held islands.

Although the Scarborough Shoal is merely a few rocks poking
above the sea, it is important to the Philippines because of the
fish stocks in the area. Manila says China’s blockade of the
shoal is a violation of international law.

The dispute has become more significant since the Permanent
Court of Arbitration ruled in July that no country had sovereign
rights over activity at Scarborough Shoal. China has refused to
recognize the ruling by the court in The Hague.

Li made no direct mention of Scarborough Shoal in the
comments provided by the foreign ministry, but Beijing said on
Wednesday there had been no new activity there and “some people”
were spreading information that was “hyping the situation.”

China’s embassy in Manila said there has been no dredging or
building at the shoal and China has maintained a coastguard
presence there for law enforcement patrols.

A statement by ASEAN on Wednesday listed eight points
related to the South China Sea, but made no mention of the
arbitration ruling.

The bloc traditionally shies away from taking a position on
thorny diplomatic issues, especially where China is concerned,
because of its influence in the region and the need to balance
ties with the United States.

“Both China and the United States are among the most
important partners of ASEAN, and ASEAN does not want to have to
choose between those partners,” the secretary general of the
bloc, Le Luong Minh, told Reuters in an interview on Thursday.

(Additional reporting by Ben Blanchard in Beijing; Writing by
John Chalmers; Editing by Raju Gopalakrishnan)