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South China Sea code of conduct talks to be ‘stabilizer’ for region: China premier

MANILA (Reuters) – China’s agreement to begin discussions with the Association of Southeast Asian Nations (ASEAN) on the fine print of a code of conduct framework for the disputed South China Sea will be a “stabilizer” for the region, Chinese Premier Li Keqiang said.

“China’s greatest hope is for peace and stability in the South China Sea,” Li told ASEAN leaders in Manila.

Southeast Asia and China foreign ministers in August adopted a negotiating framework for a code of conduct in the South China Sea, a move they hailed as progress but seen by critics as a tactic to buy China time to consolidate its maritime power.

Li, addressing leaders of ASEAN grouping during a summit in the Philippines capital Manila on Monday, said there was a consensus on moving forward and to try to peacefully resolve the thorny issue.

“We hope the talks on the code of conduct will bolster mutual understanding and trust. We will strive under the agreement, to reach a consensus on achieving early implementation of the code of conduct,” Li said, according to a transcript of his speech released by China’s Foreign Ministry on Tuesday.

Li didn’t give a timeframe, but said he hoped this move would be a “stabilizer” for the region.

Critics say the agreement to talk on the details of the code of conduct is only an incremental move, with a final agreement not likely anytime soon. Despite a period of relative stability in the South China Sea, some countries at the summit said this shouldn’t be taken for granted.

The framework seeks to advance a 2002 Declaration of Conduct (DOC) of Parties in the South China Sea, which has mostly been ignored by claimant states, particularly China, which has built seven manmade islands in disputed waters, three of which are equipped with runways, surface-to-air missiles and radars.

All parties say the framework is only an outline for how the code will be established but critics say the failure to outline as an initial objective the need to make the code legally binding and enforceable, or have a dispute resolution mechanism, raises doubts about how effective the pact will be.

Signing China up to a legally binding and enforceable code for the strategic waterway has long been a goal for claimant members of ASEAN, some of which have sparred for years over what they see as China’s disregard for their sovereign rights and its blocking of fishermen and energy exploration efforts.

Malaysia, Taiwan, Brunei, Vietnam and the Philippines all claim some or all of the South China Sea and its myriad shoals, reefs and islands.

(Reporting by James Pomfret in Manila; Editing by Michael Perry)

Vietnam’s neighbors, ASEAN, targeted by hackers: report

SINGAPORE (Reuters) – A hacking group previously linked to the Vietnamese government or working on its behalf has broken into the computers of neighboring countries as well as a grouping of Southeast Asian nations, according to cybersecurity company Volexity.

Steven Adair, founder and CEO, said the hacking group was still active, and had compromised the website of the Association of Southeast Asian Nations (ASEAN) over several high-profile summit meetings. ASEAN is holding another summit of regional leaders in the Philippines capital Manila this week.

In May, cybersecurity company FireEye reported that the group, which it calls APT32 and is also known as OceanLotus, was actively targeting foreign multinationals and dissidents in Vietnam. FireEye said at the time the group’s activity was “of interest to the nation of Vietnam.”

Adair told Reuters he had no basis to definitely say who was behind the group but said its capabilities rivalled those of most other advanced persistent threat (APT) groups, a term often used to refer to hacker groups that are believed to have state support.

“What we can say is that this is a very well resourced attacker that is able to conduct several simultaneous attack campaigns.”

Vietnamese officials did not immediately respond to requests for comment. But Hanoi has in the past denied accusations of cyber-attacks against organizations or individuals, and said it would prosecute any cases.

Adair said it was not clear how much information the group had stolen. “We do not really have anything on the scale of data theft, but we can tell you the scale and reach of the sites they have compromised is very far reaching,” he said.

Volexity said in a report that the group had compromised websites of ministries or government agencies in Laos, Cambodia and the Philippines so they would load malicious code onto the computers of targeted victims.

This code would then direct them to a Google page which asked for their permission to access their Google account. If the user agrees, the hackers then have access to their contacts and emails.

The ministries included Cambodia’s ministries of foreign affairs, the environment, the civil service and social affairs, as well as its national police. In the Philippines it had compromised the websites of the armed forces and the office of the president.

Three ASEAN websites, and the websites of dozens of Vietnamese non-government groups, individuals and media, were similarly targeted. The group also infected websites belonging to several Chinese oil companies.

Officials at ASEAN’s headquarters in Jakarta were not immediately available for comment.

Kirt Chanthearith, a spokesman for the Cambodian national police, said the police website was hacked about six months ago but he did not know who was responsible. “It was hacked and we lost some data”, he said, without giving further details.

Officials in Thailand said they were not aware of any hacking of government or police websites.

In Manila, Allan Cabanlong, executive director of the Cybercrime Investigation and Coordination Centre, said there was no damage to government web sites in the Philippines but authorities were taking preventive measures.

“We’ve taken measures like cyber hygiene programs,” he told Reuters. “We are conducting due diligence in the Philippines and we are clearing our network.”

(Reporting by Jeremy Wagstaff; Additional reporting by Chansy Chhorn in PHNOM PENH, Matthew Tostevin in HANOI, Patpicha Tanakasempipat and Suphanida Thakral in BANGKOK, Agustinus Beo Da Costa in JAKARTA and Neil Jerome Morales in MANILA; Editing by Raju Gopalakrishnan)

China, Southeast Asia aim to build trust with sea drills, Singapore says

By Manuel Mogato

CLARK, Philippines (Reuters) – China and Southeast Asian navies aim to hold an inaugural joint maritime exercise next year, Singapore’s defense minister said on Tuesday, as they try to build trust amid conflicting claims over the South China Sea.

China claims almost the entire strategic waters through which about $3 trillion in ship-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims, with tensions exacerbated by Beijing’s island-building and Washington’s increasing freedom of navigation patrols.

“Singapore supports it,” Defense Minister Ng Eng Hen told reporters when asked about China’s offer to hold maritime exercises. “We will push it … for the very reason that all ASEAN and China want that. If you exercise, you at least build understanding and trust.”

The exercises were discussed at a meeting between China and Singapore on the sidelines of the Association of Southeast Asian Nations (ASEAN) Defense Ministers’ Meeting at the former U.S. air force base at Clark, north of the capital Manila.

“We’ll work out the details. See the logistics… and find a suitable area where ASEAN and China navies can exercise together,” Ng said.

Singapore and China have not always seen eye to eye in recent months. Singaporean troops have trained in self-ruled Taiwan, an island China claims as its own, which had been an irritant in ties.

Last November, Chinese-controlled Hong Kong impounded nine Singaporean armored military vehicles being shipped home from Taiwan, inflaming tension. Hong Kong later released the vehicles.

Ng said Singapore also had a proposal to “reduce risk of actual conflict” by agreeing to a new code of unexpected encounters in the air after ASEAN adopted a code to avoid sea encounters.

ASEAN and its eight regional partners, the United States, Russia, China, South Korea, Japan, India, Australia and New Zealand, had agreed to set up a “direct communications link” among them to ease tension.

Ng said the United States and Japan also welcomed the idea of exercises.

“Secretary (of Defense Jim) Mattis welcomed the exercises together with ASEAN countries,” he said.

Ng also hoped for the early conclusion of a code of conduct in the South China Sea after a framework agreement was reached this year to reduce conflicts and misunderstanding.

(Reporting by Manuel Mogato; Editing by Nick Macfie)

Southeast Asian ministers urge North Korea to rein in weapons programs

North Korean leader Kim Jong-Un looks on during a visit to the Chemical Material Institute of the Academy of Defense Science in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on August 23, 2017. KCNA/via REUTERS

By Manuel Mogato

CLARK FREEPORT ZONE, Philippines (Reuters) – Southeast Asian defense ministers on Monday expressed “grave concern” over North Korea’s nuclear and missile programs and urged the reclusive country to meet its international obligations and resume communications.

North Korea is working to develop a nuclear-tipped missile capable of striking the U.S. mainland and has ignored all calls, even from its lone major ally, China, to rein in its weapons programs which it conducts in defiance of U.N. Security Council resolutions.

Defense ministers from the Association of Southeast Asian Nations (ASEAN), in a joint statement, underscored the “need to maintain peace and stability in the region” and called “for the exercise of self-restraint and the resumption of dialogue to de-escalate tensions in the Korean peninsula”.

They are due to meet with their counterparts from the United States, China, Japan, South Korea, India, Australia, Russia and New Zealand on Tuesday when North Korea, the disputed South China Sea and terrorism are expected to top the agenda.

U.S. Defense Secretary Jim Mattis has said he will talk with Asian allies about North Korea and the crisis caused by its “reckless” provocations.

Mattis’s trip to Asia, which will also include stops in Thailand and South Korea, comes just weeks before Donald Trump’s first visit to Asia as U.S. president.

In the same statement, the ministers reiterated the importance of “safety and freedom of navigation in and over-flight above the South China Sea” and called for “self restraint in the conduct of activities”.

They also vowed to work together to combat terrorism as they condemned the attack by the Maute militant group in the southern Philippine city of Marawi.

The Philippines on Monday announced the end of five months of military operations in Marawi after a fierce and unfamiliar urban war that marked the country’s biggest security crisis in years.

(Writing by Karen Lema; Editing by Nick Macfie)

China, Vietnam meeting canceled amid South China Sea tensions

Honour guards raise an Association of Southeast Asian Nations (ASEAN) flag at a flag-raising ceremony to mark the 50th anniversary of the regional group at Vietnam's Ministry of Foreign Affairs in Hanoi August 8, 2017. REUTERS/Kham

MANILA (Reuters) – A scheduled meeting between the foreign ministers of China and Vietnam was canceled on the sidelines of a regional gathering, Chinese embassy officials said, amid growing tension between the two countries over the South China Sea.

Vietnam had held out for language that noted concern about island-building and criticized militarization in South China Sea in the communique on Sunday from foreign ministers of the Association of South East Asian Nations (ASEAN).

Vietnam has emerged as the most vocal opponent of China’s claims in the waterway, where more than $3 trillion in cargo pass every year.

The Chinese embassy officials gave no reason for the cancellation of the meeting scheduled for Monday in Manila between China’s Wang Yi and Vietnam’s Pham Binh Minh.

A Chinese foreign ministry official said they had “already met”. Vietnam’s foreign ministry did not respond immediately to a request for comment.

State media in Vietnam said the ministers had held a “pull aside” meeting and exchanged views. It showed pictures of them shaking hands.

Although the language in the ASEAN communique reflected that in previous years, some countries pursuing deeper business ties with Beijing, such as Cambodia and the Philippines, had argued for dropping it.

Beijing is sensitive to even a veiled reference by ASEAN to its reclamation of seven reefs and its military installations in the South China Sea, which it claims in almost its entirety despite the competing claims of five other countries.

Tension has risen since June, when Vietnam infuriated China by drilling for oil and gas in an offshore block that Beijing disputes. The exploration was suspended after diplomatic protests from China.

After the ASEAN meeting, China’s foreign minister had called out “some countries” who voiced concern over island reclamation.

Wang said that China had not carried out reclamation for two years. “At this time, if you ask who is carrying out reclamation, it is definitely not China – perhaps it is the country that brings up the issue that is doing it,” he added.

Satellite images have shown that Vietnam has carried out reclamation work in two sites in the disputed seas in recent years.

On Tuesday, the state-run China Daily cited unnamed sources as saying Vietnam had tried to hype up the reclamation issue in the communique, pointing out that Vietnam has accelerated its land reclamation in the South China Sea.

“Undoubtedly, what Vietnam has done is the trick of a thief crying ‘stop thief,'” the paper quoted one of the sources as saying.

Australia, Japan and the United States on Monday urged Southeast Asia and China to ensure that a South China Sea code of conduct they have committed to draw up will be legally binding and said they strongly opposed “coercive unilateral actions”.

China has strongly opposed what it calls interference by countries outside the region in the South China Sea issue.

Meeting Japanese Foreign Minister Taro Kono on the sidelines of a regional security forum in Manila on Monday, Wang urged Japan to respect the efforts of China and ASEAN countries and play a more constructive role for regional peace and stability.

“Don’t always make trouble behind the backs of other countries and provoke quarrels,” the ministry cited Wang as saying.

(Reporting by Christian Shepherd; Additional reporting by Ben Blanchard in BEIJING; Editing by Michael Perry)

China set for easy ride from ASEAN on disputed South China Sea

By Manuel Mogato

MANILA (Reuters) – Southeast Asian ministers meeting this week are set to avoid tackling the subject of Beijing’s arming and building of manmade South China Sea islands, preparing to endorse a framework for a code of conduct that is neither binding nor enforceable.

The Association of South East Asian Nations (ASEAN) has omitted references to China’s most controversial activities in its joint communique, a draft reviewed by Reuters shows.

In addition, a leaked blueprint for establishing an ASEAN-China code of maritime conduct does not call for it to be legally binding, or seek adherence to the United Nations Convention on the Law of the Sea (UNCLOS).

The two drafts highlight China’s growing regional clout at a time of uncertainty whether the new U.S. administration will try to check Beijing’s assertiveness in the disputed waters.

The South China Sea chapter in the latest draft communique, a negotiated text subject to changes, is a watered-down version of one issued in Laos last year.

ASEAN expressed “serious concern” in that text, and “emphasised the importance of non-militarisation and self-restraint in all activities, including land reclamation.”

But the latest text calls for avoidance of “unilateral actions in disputed features” instead.

The role of the Philippines as 2017 chair of ASEAN has helped China keep a lid on discord.

Once ASEAN’s most vocal critic of China’s conduct, the Philippines, under President Rodrigo Duterte, has put aside disputes in exchange for Chinese funding pledges of $24 billion.

ASEAN ties with the United States, under President Donald Trump, have been in flux, as questions linger over Washington’s commitment to maritime security and trade in Asia, diminishing the grouping’s bargaining power with Beijing.

A legally binding and enforceable code of conduct has been a goal for ASEAN’s claimant members – Brunei, Malaysia, the Philippines and Vietnam – since a 2002 pact to ensure freedom of navigation and overflight and leave rocks and reefs uninhabited.

That pact, the Declaration of Conduct (DOC) of Parties in the South China Sea, has been largely ignored, particularly by China, which reclaimed seven reefs and can now deploy combat planes on three, besides defense systems already in place.

Analysts and some ASEAN diplomats worry that China’s sudden support for negotiating a code of conduct is a ploy to buy time to further boost its military capability.

“We could have done more to push China to agree to a much stronger document, holding claimant states more accountable,” said one ASEAN diplomat.

The agreed two-page framework is broad and leaves wide scope for disagreement, urging a commitment to the “purposes and principles” of UNCLOS, for example, rather than adherence.

The framework papers over the big differences between ASEAN nations and China, said Patrick Cronin of the Center for a New American Security.

“Optimists will see this non-binding agreement as a small step forward, allowing habits of cooperation to develop, despite differences,” he said.

“Pessimists will see this as a gambit favorable to a China determined to make the majority of the South China Sea its domestic lake.”

CONSENSUS CONSTRAINTS

Diplomats say ASEAN’s requirement of consensus in decision-making allows China to pressure some members to disagree with proposals it dislikes. China has long denied interfering.

A separate ASEAN document, dated May and seen by Reuters, shows that Vietnam pushed for stronger, more specific text.

Vietnam sought mention of respect for “sovereignty, sovereign rights and jurisdiction” not only in accordance with international law, but more specifically, UNCLOS.

Sovereign rights cover entitlements to fish and extract natural resources.

Experts say the uncertain future U.S. commitment to Asia leaves Vietnam in the most exposed position, as it has competing claims with China and relies on imports from its neighbor.

Opposition by China has repeatedly disrupted Vietnam’s efforts to exploit offshore energy reserves, most recently in an area overlapping what Beijing considers its oil concessions.

The code of conduct framework was useful to build confidence, said Philippine security expert Rommel Banlaoi, but was not enough to manage and prevent conflict in the South China Sea.

China claims almost the entire South China Sea, through which about $5 trillion in goods pass every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

(Writing by Martin Petty; Editing by Clarence Fernandez)

Philippines calls for ‘gentlemen’s agreement’ between ASEAN, China on sea code

Philippine Senator Alan Peter Cayetano speaks during the Congressional confirmation hearing of Environment Secretary Regina Lopez at the Senate in Manila, Philippines May 2, 2017. REUTERS/Erik De Castro

By Martin Petty and Manuel Mogato

MANILA (Reuters) – Southeast Asian nations and China should start with a “gentleman’s agreement” on the busy South China Sea waterway because no mechanism exists to legally enforce any deal, the Philippine foreign minister said on Friday.

The Association of South East Asian Nations (ASEAN) and China on Thursday finished a draft framework for negotiating a code of conduct, despite regional scepticism whether Beijing will commit to rules likely to restrain its maritime ambitions.

Southeast Asian nations with claims in the South China Sea have long wanted to sign China up to a legally binding and enforceable code. It was unclear if that was mentioned in the framework draft, which has not been made public.

Philippine Foreign Secretary Alan Peter Cayetano played down the importance of a legally binding contract.

“If it’s legally binding, which court can the parties go to? And the countries that do not comply, will they respect that court?” he asked reporters.

“Let’s start with it being binding, gentlemen’s agreement. We have a community of nations that signed it.”

China claims most of the energy-rich South China Sea, through which about $5 trillion in sea-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

Click http://tmsnrt.rs/2qyBNpf for graphic on overlapping claims in the South China Sea

Last year, the Permanent Court of Arbitration in the Hague invalidated China’s claim to sovereignty over most of the South China Sea, in a case filed on maritime boundaries filed by the previous Philippine government in 2013.

A code of conduct is the key objective of a 2002 Declaration on Conduct, large parts of which China has ignored, particularly a commitment not to occupy or reclaim uninhabited features.

China has piled sand upon reefs to build seven islands in disputed parts of the Spratly archipelago. China has unfinished business there and has been transforming three of the reefs into what experts believe could be forward operating bases.

Philippine President Rodrigo Duterte on Friday described them as “some kind of armed garrison.”

The code framework would envisage a round-the-clock hotline and urge defense officials to find ways to follow the code, Chee Wee Kiong of Singapore’s foreign ministry said on Thursday.

Some ASEAN diplomats fear China’s sudden interest in completing it could be a strategy to buy time for Beijing to wrap up construction activities.

Experts say China wants to appear to engage ASEAN or bind its claimant states to a weak code at a time when U.S. policy on the South China Sea is in a state of flux.

One ASEAN diplomat said the latest draft did not mention any dispute settlement mechanism or sanctions for violations, but focused mostly on managing tension and building trust.

“We are very realistic and practical,” said the source, who declined to be identified. “We wanted first to pick the low hanging fruit. If we went straight to the contentious issues, we would not get to where we are now.”

The framework represented progress, but expectations should be realistic, said Jay Batongbacal, a Philippine academic and expert on the South China Sea.

“Given it’s been 15 years to get to a draft, I’m not really holding my breath,” he added.

Click http://tmsnrt.rs/2pSNmZq for graphic on Turf war on the South China Sea

(Editing by Clarence Fernandez)

Japan, China to boost financial ties amid protectionist, North Korean tensions

Chinese Finance Minister Xiao Jie (R) and Japanese Finance Minister Taro Aso shake hands during their bilateral meeting, on the sidelines of Asian Development Bank (ADB) annual meeting, in Yokohama, Japan, Saturday, May 6, 2017. REUTERS/Koji Sasahara/Pool

By Tetsushi Kajimoto

YOKOHAMA, Japan (Reuters) – Japan and China agreed to bolster economic and financial cooperation, Japanese Finance Minister Taro Aso said on Saturday, as U.S. President Donald Trump’s protectionist stance and tension over North Korea weigh on Asia’s growth outlook.

Chinese Finance Minister Xiao Jie, who missed a trilateral meeting with his Japanese and South Korean counterparts on Friday for an emergency domestic meeting, had flown in for the talks with Aso, seeking to dispel speculation his absence had any diplomatic implications.

“We actively exchanged views on economic and financial situations in Japan and China and our cooperation in the financial field,” Aso told reporters after the meeting, which included senior finance ministry and central bank officials.

“It was significant that we reconfirmed the need of financial cooperation between the two countries while sharing our experiences in dealing with economic policies and structural issues,” he added.

The two countries agreed to launch joint research on issues of mutual interest – without elaborating – and to report the outcomes at the next talks, which will be held in 2018 in China.

They did not discuss issues such as currencies and geopolitical risks from North Korea’s nuclear and missile program during the dialogue, held on the sidelines of the Asian Development Bank’s (ADB) annual meeting in Yokohama, eastern Japan, Aso said.

Relations between Japan and China have been strained over territorial rows and Japan’s occupation of parts of China in World War Two, though leaders have recently sought to mend ties through dialogue.

Still, China’s increasing presence in infrastructure finance has alarmed some Japanese policymakers, who worry that Beijing’s new development bank, the Asian Infrastructure Investment Bank (AIIB), may overshadow the Japan-backed ADB.

Shortly before the bilateral talks on Saturday, Xiao voiced hope that the ADB will boost ties with China’s high profile “One Belt One Road” infrastructure development initiatives.

“China hopes the ADB … strengthens the strategic ties between its programs and the One Belt One Road initiative to maximize synergy effects and promote Asia’s further development,” Xiao told the ADB’s annual gathering.

Japan and China do agree on the need to respect free trade, which they see as crucial to Asia’s trade-dependent economies.

Finance officials from Japan, China and South Korea agreed to resist all forms of protectionism in Friday’s trilateral meeting, taking a stronger stand than G20 major economies against the protectionist policies advocated by Trump.

China has positioned itself as a supporter of free trade in the wake of Trump’s calls to put America’s interests first and pull out of multilateral trade agreements.

Japan has taken a more accommodative stance toward Washington’s argument that trade must not just be free but fair.

(Reporting by Tetsushi Kajimoto; Editing by Nick Macfie and Alexander Smith)

Tillerson urges ASEAN to cut North Korea funding, minimize ties

U.S. Secretary of State Rex Tillerson (C) poses with ASEAN foreign ministers before a working lunch at the State Department in Washington, U.S., May 4, 2017. REUTERS/Yuri Gripas

By David Brunnstrom

WASHINGTON (Reuters) – U.S. Secretary of State Rex Tillerson urged Southeast Asian foreign ministers on Thursday to do more to help cut funding streams for North Korea’s nuclear and missile programs and to minimize diplomatic relations with Pyongyang.

In his first ministerial meeting with all 10 members of the Association of Southeast Asian Nations (ASEAN), Tillerson also called on nations with competing claims in the South China Sea to cease all island building and militarization while talks aimed at creating a maritime code of conduct were under way.

Patrick Murphy, U.S. deputy assistant secretary of state for East Asia, said Tillerson stressed Washington’s security and economic commitment to the region, amid doubts raised by President Donald Trump’s “America First” platform and withdrawal from the Trans Pacific Partnership (TPP) trade pact.

Tillerson called on ASEAN countries to fully implement U.N. sanctions on Pyongyang, which is working to develop a nuclear-tipped missile capable of reaching the United States, and to show a united front on the issue, Murphy said.

“We think that more can be done, not just in Southeast Asia,” he told reporters. “We are encouraging continued and further steps across all of ASEAN.”

Last week, Tillerson called on all countries to suspend or downgrade diplomatic ties with Pyongyang, saying that North Korea abuses diplomatic privileges to help fund its arms programs. Tillerson also warned that Washington would sanction foreign firms and people conducting business with North Korea if countries did not act themselves.

All ASEAN members have diplomatic relations with North Korea and five have embassies there.

Murphy said Washington was not encouraging ASEAN states to formally cut ties, but to examine the North Korean presence “where it clearly exceeds diplomatic needs.”

He said some countries were already doing this and also looking at the presence of North Korean workers, another significant revenue earner for Pyongyang.

KEEPING TENSION FROM INCREASING

Some officials of ASEAN members, speaking to reporters, acknowledged concerns about North Korea, but also cited concerns about trade relations with the United States.

Philippine acting Foreign Affairs Secretary Enrique Manalo, whose country currently chairs ASEAN, said of the U.S. call to minimize relations with Pyongyahng, “We haven’t really discussed that among the ASEAN countries, so that’s probably something we will look at.

“Our immediate concern is to try and ensure the tension on the peninsula doesn’t increase. … The last thing we would like to see is to have a conflict break out due to some miscalculation,” Manalo said.

Singapore’s foreign minister, Vivian Balakrishnan, said sanctions would have to be fully implemented, but North Korea’s presence in his country is already minimal.Asked if that could be further reduced, he said: “I won’t say never, but at this point in time that’s not the issue – we will stick with the U.N. Security Council’s resolutions.”

Balakrishnan, whose country signed the TPP, stressed the importance of U.S.-ASEAN business ties – annual trade of $100 billion supporting half a million U.S. jobs and $274 billion of U.S. investment.

“Southeast Asia is replete with economic opportunities and it’s too big to miss out on,” he said.

His remark highlighted growing concern in Asia that Trump has ditched former President Barack Obama’s economic “pivot” to the region by abandoning the TPP, something analysts say has led to more countries being pulled into China’s orbit.

Murphy said Tillerson stressed that ASEAN remained a “very important … strategic partner,” which is shown by Trump’s commitment to attend regional summits in the Philippines and Vietnam in November.

Manalo called the meeting with Tillerson and Trump’s travel plans “encouraging” signs.

“ROOM AND SPACE”

Washington wants ASEAN countries to crack down on money laundering and smuggling involving North Korea and to look at restricting legal business too.

It has been working to persuade China, North Korea’s neighbor and only major ally, to increase pressure on Pyongyang. U.S. officials are also asking China to urge more China-friendly ASEAN members, such as Laos and Cambodia, to do the same.

U.S. efforts have included a flurry of calls by Trump to the leaders of the Philippines, Thailand and Singapore.

Diplomats say U.S. pressure has caused some irritation in ASEAN, including Malaysia, which has maintained relations with Pyongyang in spite of the assassination of North Korean leader Kim Jong Un’s estranged half brother at Kuala Lumpur International airport in February/

On the issue of the South China Sea, ASEAN has adopted a cautious approach recently, with a weekend summit avoiding references to China’s building and arming of artificial islands there.

This stance coincided with moves by China and ASEAN to draft a framework to negotiate a code of conduct. Murphy said Tillerson had stressed that this process needed “room and space” through avoiding fortifying existing claims.

The United States has conducted freedom of navigation operations to challenge South China Sea claims, angering China, but not yet under Trump. Murphy said such operations would continue, but declined to say when the next might occur.

(Reporting by David Brunnstrom; Editing by Grant McCool and Leslie Adler)

China welcomes ASEAN summit declaration on South China Sea

An aerial view of China occupied Subi Reef at Spratly Islands in disputed South China Sea April 21, 2017. REUTERS/Francis Malasig/Pool

BEIJING (Reuters) – China on Tuesday welcomed a softer stand taken by Southeast Asian countries on the disputed South China Sea at a weekend summit, saying it showed efforts to ease tension were working.

The Association of South East Asian Nations (ASEAN) dropped references to “land reclamation and militarization” from its chairman’s statement this year at the end of its summit in the Philippine capital, Manila.

The reference had been included last year and was even in an earlier, unpublished version of the statement, seen by Reuters on Saturday.

Two ASEAN diplomats said that this year, China had pressed ASEAN chair the Philippines to keep China’s contentious activities in the strategic waterway off ASEAN’s official agenda.

China is not a member of the 10-member bloc and did not attend the summit but it is extremely sensitive about the content of its statements.

It has often been accused of trying to influence the drafting of statements to muzzle what it sees as challenges to its sweeping sovereignty claim.

Chinese Foreign Ministry spokesman Geng Shuang did not directly answer a question on whether China had exerted pressure over the statement.

“Since last year, with the joint efforts of China and ASEAN countries including the Philippines, temperatures in the South China Sea situation have gone down and things have eased up. I think this accords with the interests of countries in the region,” Geng told a daily news briefing.

“The relevant situation at this ASEAN summit again fully shows the positive changes in the South China Sea situation and that the joint wish of countries in this region is to seek stability, promote cooperation and seek development, and this should be respected and supported by all sides.”

China has reacted angrily to individual members of the regional bloc expressing their concern about its rapid reclamation of reefs in the Spratlys islands and its installation of missile systems on them.

Philippine foreign ministry official Zaldy Patron, who is in-charge of ASEAN affairs, said nobody at the summit had pushed strongly on the South China Sea issue, or mentioned anything about land reclamation and militarization.

“But on the other hand, the leaders highlighted improving relations between ASEAN and China,” Patron said in Manila.

The softer statement comes as Philippine President Rodrigo Duterte seeks to bury the hatchet with China after years of wrangling over its maritime assertiveness and over-lapping claims.

After lobbying from Duterte, China agreed to let Philippine boats back to the rich fishing ground of the disputed Scarborough Shoal following a four-year blockade.

China claims most of the South China Sea. Vietnam, the Philippines, Malaysia, Brunei and Taiwan also have competing claims that overlap with China’s.

(Reporting by Ben Blanchard; Additional reporting by Manny Mogato in Manila; Editing by Robert Birsel)

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