Tag Archives: China

U.S. envoy says North Korean leader ‘begging for war’ as U.N. mulls sanctions

Secretary of Defense James Mattis (L) makes a statement outside the West Wing of the White House in response to North Korea's latest nuclear testing, as Chairman of the Joint Chiefs of Staff Gen. Joseph Dunford listens, in Washington, U.S., September 3, 2017

By Christine Kim and Michelle Nichols

SEOUL/UNITED NATIONS (Reuters) – The United States on Monday said countries trading with North Korea were aiding its “dangerous nuclear intentions” as the United Nations Security Council mulled tough new sanctions and the isolated regime showed signs of planning more missile tests.

South Korea said it was talking to Washington about deploying aircraft carriers and strategic bombers to the Korean peninsula following the North’s sixth and most powerful nuclear test on Sunday.

At a Security Council meeting, U.S. Ambassador Nikki Haley said North Korea’s Kim Jong Un was “begging for war” and urged the 15-member group to adopt the strongest possible measures to deter him.

“War is never something the United States wants. We don’t want it now. But our country’s patience is not unlimited. We will defend our allies and our territory,” Haley said.

“The United States will look at every country that does business with North Korea as a country that is giving aid to their reckless and dangerous nuclear intentions,” she said.

Haley said the United States will circulate a new Security Council resolution on North Korea this week and wants a vote on it next Monday.

China, a top trading partner with North Korea, and Russia called for a peaceful resolution to the crisis.

“China will never allow chaos and war on the (Korean) Peninsula,” said Liu Jieyi, the Chinese ambassador to the United Nations.

Russia said peace in the region was in jeopardy.

“A comprehensive settlement to the nuclear and other issues plaguing the Korean peninsula can be arrived at solely through political diplomatic channels,” Russia’s U.N. Ambassador Vassily Nebenzia said.

North Korea has been under U.N. sanctions since 2006 over its ballistic missile and nuclear programs. Typically, China and Russia only view a test of a long-range missile or a nuclear weapon as a trigger for further possible U.N. sanctions.

U.S. President Donald Trump had asked to be briefed on all available military options, according to his defense chief.

Officials said activity around missile launch sites suggested North Korea planned more missile tests.

“We have continued to see signs of possibly more ballistic missile launches. We also forecast North Korea could fire an intercontinental ballistic missile,” Jang Kyoung-soo, acting deputy minister of national defense policy, told a parliament hearing on Monday.

North Korea tested two ICBMs in July that could fly about 10,000 km (6,200 miles), putting many parts of the U.S. mainland within range and prompting a new round of tough international sanctions.

 

MILITARY EXERCISES

South Korea’s air force and army conducted exercises involving long-range air-to-surface and ballistic missiles on Monday following the North’s nuclear test on Sunday, its joint chiefs of staff said in a statement.

In addition to the drill, South Korea will cooperate with the United States and seek to deploy “strategic assets like aircraft carriers and strategic bombers”, Jang said.

South Korea’s defense ministry also said it would deploy the four remaining launchers of a new U.S. missile defense system after the completion of an environmental assessment by the government.

The rollout of the controversial Terminal High Altitude Area Defense (THAAD) system at a site south of the South Korean capital, Seoul, which is vehemently opposed by neighboring China and Russia, had been delayed since June.

At the Security Council, neither Russia nor China mentioned their long-held opposition to THAAD or the prospect of further U.N. sanctions in the wake of North Korea’s nuclear test.

North Korea said it tested an advanced hydrogen bomb for a long-range missile on Sunday, prompting a warning from U.S. Defense Secretary Jim Mattis of a “massive” military response from the United States if it or its allies were threatened.

People walk past a street monitor showing a news report about North Korea's nuclear test in Tokyo, Japan, September 3, 2017.

People walk past a street monitor showing a news report about North Korea’s nuclear test in Tokyo, Japan, September 3, 2017. REUTERS/Toru Hanai

Trump has previously vowed to stop North Korea developing nuclear weapons and said he would unleash “fire and fury” if it threatened U.S. territory

Despite the tough talk, the immediate focus of the international response was on tougher economic sanctions.

Diplomats have said the Security Council could now consider banning North Korean textile exports and its national airline, stop supplies of oil to the government and military, prevent North Koreans from working abroad and add top officials to a blacklist to subject them to an asset freeze and travel ban.

Asked about Trump’s threat to punish countries that trade with North Korea, Chinese Foreign Ministry spokesman Geng Shuang said China has dedicated itself to resolving the North Korean issue via talks, and China’s efforts had been recognized.

“What we absolutely cannot accept is that on the one hand (we are) making arduous efforts to peacefully resolve the North Korean nuclear issue, and on the other hand (our) interests are being sanctioned or harmed. This is both not objective and not fair,” he told a regular briefing.

On possible new U.N. sanctions, and whether China would support cutting off oil, Geng said it would depend on the outcome of Security Council discussions.

China’s state-run Xinhua news agency said in an editorial that North Korea was “playing a dangerous game of brinkmanship” and it should wake up to the fact that such a tactic “can never bring security it pursues”.

 

SKEPTICISM

While South Korean President Moon Jae-in and Japanese Prime Minister Shinzo Abe agreed on Monday to work with the United States to pursue stronger sanctions, Russia voiced scepticism.

Russian Deputy Foreign Minister Sergei Ryabkov said sanctions on North Korea had reached the limit of their impact. Any more would be aimed at breaking its economy, so a decision to impose further constraints would become dramatically harder, he told a BRICS summit in China.

South Korea says the aim of stronger sanctions is to draw North Korea into dialogue. But, in a series of tweets on Sunday, Trump also appeared to rebuke South Korea for that approach.

“South Korea is finding, as I have told them, that their talk of appeasement with North Korea will not work, they only understand one thing!” Trump said on Twitter.

Still, Trump’s response was more orderly and less haphazard than he had offered after North Korea’s previous hostile actions.

His handling of its latest nuclear test reflected a more traditional approach to crisis management, which U.S. officials said illustrated the influence of Mattis and the new White House chief of staff, retired Marine Corps General John Kelly.

Japanese and South Korean stock markets both closed down about 1 percent on Monday, while safe-haven assets including gold and sovereign bonds ticked higher, but trade was cautious. U.S. stock markets were closed for the Labor Day holiday.

“Assuming the worst on the Korean peninsula has not proven to be a winning trading strategy this year,” said Sean Callow, a senior foreign exchange strategist at Westpac Bank.

“Investors seem reluctant to price in anything more severe than trade sanctions, and the absence of another ‘fire and fury’ Trump tweet has helped encourage markets to respond warily.”

South Korea’s finance minister vowed to support financial markets if instability showed signs of spreading to the real economy.

(Additional reporting by Shin-hyung Lee, Hyunjoo Jin and Cynthia Kim in SEOUL, Steve Holland, David Brunnstrom, Tim Ahmann, David Shepardson and John Walcott in WASHINGTON, John Ruwitch in SHANGHAI, Wayne Cole and Swati Pandey in SYDNEY; Writing by Lincoln Feast and Jeff Mason; Editing by Robert Birsel and Paul Simao)

 

France says North Korea close to long-range missile capability

A new stamp issued in commemoration of the successful second test launch of the "Hwasong-14" intercontinental ballistic missile is seen in this undated photo released by North Korea's Korean Central News Agency (KCNA) in Pyongyang on August 31, 2017.

PARIS (Reuters) – France’s foreign minister said on Friday that North Korea would have capability to send long-range ballistic missiles in a few months and urged China to be more active diplomatically to resolve the crisis.

“The situation is extremely serious… we see North Korea setting itself as an objective to have tomorrow or the day after missiles that can transport nuclear weapons. In a few months that will be a reality,” Jean-Yves Le Drian told RTL radio.

“At the moment, when North Korea has the means to strike the United States, even Europe, but definitely Japan and China, then the situation will be explosive,” he said.

Le Drian, who spoke to his Chinese counterpart on Thursday, said everything had to be done to ensure a latest round of United Nations sanctions was implemented and urged China, Pyongyang’s main trade partner, to do its utmost to enforce them.

“North Korea must find the path to negotiations. It must be diplomatically active.”

 

(Reporting by John Irish, Editing by Leigh Thomas)

 

France says powers must impose transition on Syrians, no role for Assad

French Foreign Minister Jean-Yves Le Drian attends a conference of Italian ambassadors in Rome, Italy July 24, 2017.

By John Irish

PARIS (Reuters) – France’s foreign minister said on Friday he wanted major powers to agree on a transition plan that would be imposed on Syrians, but ruled out any role for President Bashar al-Assad, who he said had “murdered” part of his population.

Jean-Yves Le Drian’s comments come despite what has appeared to be a softening in Paris’ position since the arrival of President Emmanuel Macron.

Macron’s election victory gave Paris, which is a key backer of the Syrian opposition and the second-largest contributor to the U.S.-led coalition fighting Islamic State, a chance to re-examine its Syria policy.

Macron proposed dropping demands Assad step down as a pre-condition for talks, although French officials still insist he cannot be the long-term future for Syria.

Le Drian, defence minister under former president Francois Hollande, said the anticipated defeat of Islamic State militants meant there was an opportunity for a compromise. More than 300,000 people have died in six years of fighting and millions more have fled Syria.

“He (Assad) cannot be part of the solution. The solution is to find with all the actors a calendar with a political transition that will enable a new constitution and elections,” Le Drian told RTL radio.

“This transition cannot be done with Bashar al-Assad who murdered part of his population and who has led millions of Syrians to leave” their homeland, he said.

Critics accused the Hollande administration of intransigence over Assad’s future, although it later said Assad would have to leave only once a transition process was complete.

 

CONTACT GROUP

That position has put France at odds with Russia and Iran, who back Assad and say the Syrian people should decide their own future.

While Britain has said Assad must go, diplomats say the administration of U.S. President Donald Trump has yet to outline a vision for a political process in Syria and is focusing primarily on defeating Islamic State and countering Iran.

Syria's President Bashar al-Assad speaks during an interview with AFP news agency in Damascus, Syria in this handout picture provided by SANA on April 13, 2017.

FILE PHOTO: Syria’s President Bashar al-Assad speaks during an interview with AFP news agency in Damascus, Syria in this handout picture provided by SANA on April 13, 2017. SANA/Handout via REUTERS

The U.N. Security Council has already adopted a Syria transition roadmap and two diplomats said the latest French idea was to get the five permanent members of the council – Britain, China, France, Russia and the United States – to agree first how to move forward.

The Security Council would then bring into fold the main regional powers, although diplomats said it was pointless without Iran’s involvement. There were also questions on how to win U.S. support given the Trump administration’s staunch anti-Iranian position.

“That’s what we want to do now even before Assad leaves. We do that independently because if we wait for the Syrians to agree we will wait a long time and there will be thousands more dead,” Le Drian said.

Macron has said the initiative would begin to see light during the U.N. General Assembly in mid-September.

Le Drian has previously said the contact group would aim to help U.N.-brokered peace talks in Geneva. They have stalled in large part due to the weakness of opposition groups and the Assad government’s refusal to enter substantive negotiations, given its strong position on the ground.

The last major international attempt to resolve the crisis ended in failure when the International Syria Support Group, which included Iran, was disbanded after Syrian government forces retook the rebel stronghold of Aleppo in 2015.

 

(Reporting by John Irish; Editing by Jon Boyle)

 

Macau enlists Chinese army as authorities struggle with typhoon fallout

People’s Liberation Army (PLA) soldiers clean debris after Typhoon Hato hits in Macau, China August 25, 2017. REUTERS/Tyrone Siu

By Venus Wu and Farah Master

MACAU (Reuters) – Chinese People’s Liberation Army troops were deployed on the streets of Macau on Friday to help clean up in the aftermath of a devastating typhoon and amid mounting criticism authorities were unprepared for the severity of the storm.

Macau public broadcaster, TDM, reported some 1,000 Chinese PLA troops left their Macau barracks to assist in the recovery. Chinese troops are rarely seen on Macau streets.

Dressed in fatigues and caps, some used shovels to shift mounds of stinking rubbish and debris cluttering public spaces, including smashed furniture, sofa and televisions, while processions of green military trucks rumbled along roads.

Macau’s leader Fernando Chui requested the Chinese army’s involvement in “disaster relief” after the highest category 10 Typhoon Hato pummeled the world’s biggest gambling hub on Wednesday, the government said.

Under Macau law, the assistance of Chinese troops can be sought for such humanitarian purposes.

The death toll from Hato stood at nine, with scores missing. Hato, with destructive winds of more than 200 kph (124 mph), was the worst storm since 1968 to hit Macau, causing almost city-wide blackouts, flooding, disrupting water supplies, smashing scores of vehicles and damaging buildings.

“This is horrible, horrible. We live like refugees,” said a resident in her 60s surnamed Yeung.

Hong Kong’s weather observatory said there were indications another storm, brewing close to the Philippines, could hit southern China in the next few days, though it wasn’t expected to be as strong as Hato.

“NO TIME TO PREPARE”

Amid mounting outrage at the government’s handling of the storm, including the perceived failure to adequately warn residents as it approached, Macau leader Chui apologized and said the head of the local observatory would step down.

Some residents said it wasn’t enough.

“The official who left is just a scapegoat to protect Chui…the government is useless,” said Protia Chow, a resident in her 50s who helps run a trading company.

“Chui will not step down but many people think he should,” said Macau resident Cheng Kin-ching. “People are angry at the local government … people were still going to work and it was very dangerous. People died and it’s the government’s responsibility. People had no time to prepare.”

Sonia Chan, an official with the Secretariat for Administration and Justice, who visited some badly affected areas, deflected questions on the public outrage.

“We are here today for disaster relief. We hope to do something concrete,” she said.

As nearby Hong Kong shut down and closed financial markets on Wednesday ahead of Hato, Macau’s authorities failed to raise a sufficiently high typhoon warning signal, critics said, leading many residents to go to work that day.

Authorities have struggled to restore order in the city of 600,000, with some residents having to queue for water from fire hydrants. Many of Macau’s large casinos were relying on back-up generators.

Macau has been rapidly transformed since its return from Portuguese to Chinese rule in 1999 into a gambling hub many times larger than Las Vegas, with major U.S. casinos piling in.

Infrastructure, however, has mostly failed to keep pace with its development despite the rise of a wave of glitzy casino resorts.

Macau gambling stocks fell again in Friday trade with shares of MGM China leading the slide and down nearly 2.5 percent. Wynn Macau fell nearly 2 percent, and Melco International dropped 1.6 percent. Galaxy Entertainment eased 1.5 percent.

(Reporting by Venus Wu, Farah Master and Tyrone Siu; Additional reporting by Donny Kwok; Writing by James Pomfret; Editing by Michael Perry and Richard Borsuk)

Typhoon batters Hong Kong and south China, three dead in Macau

Typhoon batters Hong Kong and south China, three dead in Macau

By James Pomfret and Anne Marie Roantree

HONG KONG (Reuters) – Typhoon Hato, a maximum category 10 storm, slammed into Hong Kong on Wednesday lashing the Asian financial hub with wind and rain that uprooted trees and forced most businesses to close, while in some places big waves flooded seaside streets.

There were reports of 34 people injured in Hong Kong while in the city of Macau, across the Pearl River estuary, three people were killed, authorities there said.

In Hong Kong, more than 450 flights were canceled, financial markets suspended and schools closed as Hato bore down, the first category 10 storm to hit the city since 2012.

“I’ve never seen one like this,” Garrett Quigley, a longtime resident of Lantau island to the west of the city, said of the storm.

“Cars are half submerged and roads are impassable with flooding and huge trees down. It’s crazy.”

Many skyscrapers in the usually teeming streets of Hong Kong were empty and dark as office workers stayed at home.

Hato, that means “sky pigeon” in Japanese, churned up Hong Kong’s Victoria Harbor and triggered large swells and big waves on some of the city’s most popular beaches, with serious flooding in low-lying areas.

In residential districts such as Heng Fa Chuen on densely populated Hong Kong island, waves smashed against the sides of oceanfront buildings and surged over a promenade, sweeping away walls and benches and swamping vehicles parked nearby.

Construction cranes swayed at the tops of skyscrapers, windows imploded and nearly 200 trees were uprooted, while some people used canoes to venture out into flooded streets.

Authorities downgraded the storm to a category three by late-afternoon with government services, the courts, financial markets and companies set to resume normal business on Thursday.

HIGH SEAS

The storm also caused a power blackout across most of the gambling hub of Macau for about two hours, residents said, with disruption to mobile phone and internet networks. There was severe flooding on the streets, with some cars almost completely submerged, and the water supply was affected in some districts. The three men who died included a 45-year-old Chinese tourist who was hit by a heavy truck, according to a government statement.

The former Portuguese colony’s casinos, however, had backup power, two casino executives told Reuters.

The storm also made landfall in China’s Guangdong province, in Zhuhai city adjacent to Macau, Chinese state news agency Xinhua reported.

Numerous flights and trains were canceled in Guangdong province, with Shenzhen’s International Airport particularly badly hit.

Thousands of residents along the Chinese coast were evacuated and fishing vessels were called back to port.

Maximum winds near Hato’s center were recorded at a destructive 155 kph (95 mph) as it continued to move west across Guangdong in the general direction of Hainan island.

A senior scientific officer for the Hong Kong observatory warned that sea levels could rise several meters in some places, with the government issuing flood alerts and opening 27 shelters across the city.

Trading in Hong Kong’s financial markets was halted for the day, the stock exchange said. Typhoon Nida in August last year was the last storm to close the exchange for the whole day.

The city’s flagship carrier, Cathay Pacific, and Hong Kong Airlines said the majority of their flights to and from Hong Kong between 2200 GMT Tuesday and 0900 GMT Wednesday would be canceled.

Other transport services, including ferries to Macau and outlying islands in Hong Kong, were suspended.

(Additional reporting by Farah Master and Stefanie McIntyre; Editing by Paul Tait, Michael Perry and Jacqueline Wong)

U.S. targets Chinese and Russia entities over North Korea

Treasury Secretary Steven Mnuchin walks through the lobby of Trump Tower in New York City, U.S., August 15, 2017. REUTERS/Brendan McDermid

By David Brunnstrom and Doina Chiacu

WASHINGTON (Reuters) – The United States is imposing new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang’s weapons programs, U.S. officials announced on Tuesday, but stopped short of an anticipated focus on Chinese banks.

The Office of Foreign Assets Control designated six Chinese-owned entities, one Russian, one North Korean and two based in Singapore. They included a Namibia-based subsidiary of a Chinese company and a North Korean entity operating in Namibia.

Six individuals including four Russians, one Chinese and one North Korean were targeted, the Treasury Department said.

The move follows toughened United Nations sanctions agreed this month after North Korea tested its first two intercontinental ballistic missiles in July.

The Treasury Department said the new sanctions targeted those helping already-designated individuals supporting North Korea’s nuclear and ballistic missile programs and its energy trade. They included three Chinese coal importers.

The steps also targeted those helping North Korea send workers abroad and enabling sanctioned North Korea entities to get access to the U.S. and international financial system.

“Treasury will continue to increase pressure on North Korea by targeting those who support the advancement of nuclear and ballistic missile programs, and isolating them from the American financial system,” Treasury Secretary Steven T. Mnuchin said in a statement.

“It is unacceptable for individuals and companies in China, Russia, and elsewhere to enable North Korea to generate income used to develop weapons of mass destruction.”

A new round of U.S. sanctions had been expected, but Washington appeared to delay them while securing Chinese and Russian support for tougher U.N. steps.

U.S. officials and U.N. diplomats say the threat of U.S. “secondary sanctions” against Chinese firms with North Korean ties and trade pressure helped persuade China to drop opposition to the U.N. sanctions.

The latest steps stopped short of targeting Chinese financial institutions dealing with North Korea, a step that would have greatly angered Beijing. The Trump administration is still hoping China will pressure Pyongyang.

“The sanctions target a range of North Korea’s illicit activities and the focus on Chinese facilitators is another message to Beijing,” said Anthony Ruggiero, a Foundation for Defense of Democracies senior fellow and former U.S. Treasury official.

“However, there are missing elements. There’s no focus on the efforts of Chinese banks that facilitate these transactions. In addition, these Chinese networks likely have additional front companies operating on behalf of the network and those were not sanctioned.”

China is North Korea’s neighbor and main trading partner and U.S. foreign policy experts say Chinese companies have long had a key role in financing Pyongyang.

The Chinese and Russians embassies in Washington did not respond to requests for comment. China has said in the past it is strongly opposed to unilateral sanctions outside the U.N. framework, and has accused the United States of using “long-arm” jurisdiction in targeting Chinese entities.

(Additional reporting by Yeganeh Torbati; Editing by David Alexander and Jeffrey Benkoe)

Tens of thousands protest in Hong Kong over jailing of democracy activists

Demonstrators march in protest of the jailing of student leaders Joshua Wong, Nathan Law and Alex Chow, who were imprisoned for their participation of the 2014 pro-democracy Umbrella Movement, also known as "Occupy Central" protests, in Hong Kong China August 20, 2017. REUTERS/Tyrone Siu

By Venus Wu

HONG KONG (Reuters) – Tens of thousands of people took to the streets of Hong Kong on Sunday to protest against the jailing of three young democracy activists, with many questioning the independence of the Chinese-ruled city’s judiciary.

Joshua Wong, 20, Nathan Law, 24 and Alex Chow, 27, were jailed for six to eight months on Thursday for unlawful assembly, dealing a blow to the youth-led push for universal suffrage and prompting accusations of political interference.

Thousands of people marched in temperatures above 30 degrees Celsius (86 Fahrenheit) to the Court of Final Appeal, carrying placards and banners denouncing the jailing of the activists.

Former student leader Lester Shum, who helped to organize Sunday’s rally, said the number of protesters was the highest since the “Umbrella Movement” pro-democracy protests in 2014 that paralyzed major roads in the financial center for 79 days.

“This shows that the Hong Kong government, the Chinese Communist regime and the Department of Justice’s conspiracy to deter Hong Kong people from continuing to participate in politics and to protest using harsh laws and punishments has completely failed,” Shum said.

Hong Kong police estimated 22,000 people had shown up at the height of the protest.

Protesters brandished a large banner saying: “It’s not a crime to fight against totalitarianism.” They shouted: “Release all political prisoners. Civil disobedience. We have no fear. We have no regrets.”

Ray Wong, 24, who leads the pro-independence group Hong Kong Indigenous, said outrage over the jailings was helping to unite the pro-democracy opposition camp that has been riven by divisions over the past few years.

“Since the Umbrella movement, the radical and milder forces walked their own path,” he said. “We’re now standing together. It is a good start.”

In Sunday’s protest, some signs said “Shame on Rimsky”, referring to Justice Secretary Rimsky Yuen. Reuters reported that Yuen had overruled other legal officials when they advised against pursuing prison terms for the three activists.

 

NO “POLITICAL MOTIVE”

Wong and his colleagues triggered the 2014 protests, which attracted hundreds of thousands at their peak, when they climbed into a courtyard fronting the city’s government headquarters.

They were sentenced last year to non-jail punishments including community service for unlawful assembly, but the Department of Justice applied for a review, seeking imprisonment.

On Friday, Yuen denied any “political motive” in seeking jail for the trio.

The former British colony returned to China in 1997 under a “one country, two systems” agreement that ensured its freedoms, including a separate legal system. But Beijing has ultimate control and some Hong Kong people are concerned it is increasingly interfering to head off dissent.

The Hong Kong government rejected allegations of political interference.

“There is absolutely no political consideration involved. Further, allegations that the court is under political interference are totally unfounded and groundless,” it said in a statement late on Sunday.

The jail terms for Wong, Law and Chow disqualify them from running for the city’s legislature for the next five years, halting their push for a career in mainstream politics.

Lau Siu-lai, one of six legislators expelled from the legislature this year over the manner in which she took her oath of office, said the sentences were unreasonably harsh.

“It appears to be political suppression to strip away young people’s right to stand in elections,” she said. “I hope people will pay attention … We need to protect Hong Kong’s rule of law.”

Another protester carried a placard of Lady Justice with a red blindfold.

“Hong Kong’s Lady Justice and the rule of law… are now being controlled by communists, and are now being twisted and she is now blind,” said 50-year-old artist Kacey Wong.

While the imposition of tougher sentences on the activists attracted widespread criticism in Hong Kong and overseas, the Hong Kong Bar Association and Law Society defended the court’s decision.

“Unfounded comments that judicial decisions were made or influenced by political considerations originating outside Hong Kong are unjustified and damaging to our legal system, and to Hong Kong as a whole,” they said in a joint statement on Friday.

(This version of the story was refiled to fix spelling of court in 16th paragraph)

 

(Additional reporting by James Pomfret; Writing by Anne Marie Roantree; Editing by Richard Borsuk and David Stamp)

 

Philippines says China agrees on no new expansion in South China Sea

FILE PHOTO: A Filipino soldier looks out from a boat in Philippine occupied Thitu island in disputed South China Sea, April 21, 2017. REUTERS/Erik De Castro

By Manuel Mogato

MANILA (Reuters) – China has assured the Philippines it will not occupy new features or territory in the South China Sea, under a new “status quo” brokered by Manila as both sides try to strengthen their relations, the Philippine defense minister said.

Philippine Foreign Secretary Alan Peter Cayetano also said the Philippines was working on a “commercial deal” with China to explore and exploit oil and gas resources in disputed areas of the South China Sea with an aim to begin drilling within a year.

The defense minister, Delfin Lorenzana, told a congressional hearing the Philippines and China had reached a “modus vivendi”, or a way to get along, in the South China Sea that prohibits new occupation of islands.

“The Chinese will not occupy new features in the South China Sea nor they are going to build structures in Scarborough Shoal,” Lorenzana told lawmakers late on Monday, referring to a prime fishing ground close to the Philippines that China blockaded from 2012 to 2016.

China claims almost the entire South China Sea, a waterway through which about $3 trillion worth of sea-borne trade passes every year. Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have conflicting claims in the area.

Philippine President Rodrigo Duterte, who took office in June last year, has courted China and avoided rows over maritime sovereignty that dogged his predecessors, while berating traditional ally the United States over several issues.

China has built seven islands upon reefs in disputed areas, three of which, experts say, are capable of accommodating fighter jets. They have runways, radars and surface-to-air missiles which China says are for defense.

Lorenzana did not comment when lawmakers, citing reports from the military, told him five Chinese ships had showed up almost 5 km off the Philippine-held Thitu Island in the Spratly archipelago on Saturday.

The military’s public affairs chief, Colonel Edgard Arevalo, declined to comment until the armed forces had the “whole picture on the current situation”.

China’s foreign ministry did not immediately respond to a request for comment.

‘CONTRARY TO CONSTITUTION’

Cayetano assured lawmakers on Tuesday any energy deal with China would not violate the constitution and would conform to a 60-40 percent revenue sharing, weighted towards the Philippines.

“We can come up with a commercial deal that is better than Malampaya in the disputed areas,” Cayetano said, referring to an existing natural gas project off Palawan island between the government and Chevron, a resource which is due to be depleted by 2024.

“How can any Filipino argue with that? … It cannot violate the constitution.”

But such an arrangement could be complex and sensitive as both countries claim the oil and gas reserves. Sharing them could be construed as legitimizing the other’s claim, or even ceding sovereignty.

The Permanent Court of Arbitration in The Hague invalidated China’s claim over most of the South China Sea in July last year. China has refused to recognize the ruling, which clarified Philippine sovereign rights to energy reserves within its 200-mile Exclusive Economic Zone (EEZ).

The Philippine energy department last month said it may resume drilling for oil and gas on the Reed Bank, which is within the Philippine EEZ, before the end of the year, offering new blocks to investors in a bidding in December.

The Philippines suspended exploration in the Reed Bank in late 2014 as it pursued the international arbitration.

Minority lawmakers Gary Alejano and Edcel Lagman opposed the plan for an energy deal saying it would be illegal.

“This is contrary to our constitution because these areas should be exclusively for Filipinos,” Lagman said.

Cayetano declined to give details of the talks and requested an executive session of congress to divulge information about the venture with a Chinese energy company, which he did not identify.

Manuel Pangilinan, chairman of Philippine oil and gas firm PXP Energy Corp, said this month any joint venture would likely be with “a company like CNOOC”, referring to the China National Offshore Oil Corp

Officials from the foreign and energy ministries have said privately any deal would likely be commercial only and both sides would keep the issue of sovereignty out of the equation to avoid complications.

(Additional reporting by Ben Blanchard in BEIJING; Editing by Martin Petty, Robert Birsel)

North Korea holds off on Guam missile plan as China urges ‘brakes’ on rhetoric

North Korea holds off on Guam missile plan as China urges 'brakes' on rhetoric

By Christine Kim and Idrees Ali

SEOUL/WASHINGTON (Reuters) – North Korea’s leader has delayed a decision on firing missiles towards Guam while he waits to see what the United States does next, the North’s state media said on Tuesday, as South Korea’s president said Seoul would seek to prevent war by all means.

Signs of an easing in tension on the Korean peninsula helped stock markets rally for a second day running even as the United States and South Korea prepared for more joint military drills, which infuriate the North, and experts warned it could still go ahead with its provocative plan.

In his first public appearance in about two weeks, North Korean leader Kim Jong Un inspected the command of the North’s army on Monday, examining a plan to fire four missiles to land near the U.S. Pacific territory of Guam, the official KCNA said in a report.

“He said that if the Yankees persist in their extremely dangerous reckless actions on the Korean peninsula and in its vicinity, testing the self-restraint of the DPRK, the latter will make an important decision as it already declared,” the report said.

The DPRK stands for North Korea’s official name, the Democratic People’s Republic of Korea.

In photos released with the KCNA report, Kim was seen holding a baton and pointing at a map showing a flight path for the missiles appearing to start from North Korea’s east coast, flying over Japan towards Guam. North Korea has often threatened to attack the United States and its bases and released similar photos in the past but never followed through.

Pyongyang’s plans to fire missiles near Guam prompted a surge in tensions in the region last week, with U.S. President Donald Trump saying the U.S. military was “locked and loaded” if North Korea acted unwisely.

South Korean President Moon Jae-in said on Tuesday there would be no military action without Seoul’s consent and his government would prevent war by all means.

“Military action on the Korean peninsula can only be decided by South Korea and no one else can decide to take military action without the consent of South Korea,” Moon said in a speech to commemorate the anniversary of the nation’s liberation from Japanese military rule in 1945.

“The government, putting everything on the line, will block war by all means,” Moon said.

Speaking to his Russian counterpart Sergei Lavrov, Chinese Foreign Minister Wang Yi said it was urgent the United States and North Korea “put the brakes” on mutually irritating words and actions to lower temperatures and prevent an “August crisis”, China’s Foreign Ministry said in a statement.

NUCLEAR DETERRENT

Japan will be seeking further reassurance from Washington in meetings between Japan’s defense chief and foreign minister and their U.S. counterparts on Thursday.

“The strategic environment is becoming harsher and we need to discuss how we will respond to that,” a Japanese foreign ministry official said in a briefing in Tokyo.

“We will look for the U.S. to reaffirm it defense commitment, including the nuclear deterrent.”

The Liberation Day holiday, celebrated by both North and South, will be followed next week by the joint U.S.-South Korean military drills.

North Korea has persisted with its nuclear and missile programs, to ward off perceived U.S. hostility, in defiance of U.N. Security Council resolutions and sanctions.

China, North Korea’s main ally and trading partner, has repeatedly urged Pyongyang to halt its weapons program and at the same time urged South Korea and the United States to stop military drills to lower tensions.

On Tuesday, Chinese Foreign Ministry spokeswoman Hua Chunying said the crisis was approaching a critical juncture and urged all sides in the standoff to help “put out the flames” and not add fuel to the fire.

Hua said she noted comments by U.S. Defense Secretary Jim Mattis and Secretary of State Rex Tillerson about using diplomacy to resolve the issue, saying China hoped these words can be put into action.

“We also call on North Korea to echo this in response,” Hua told a daily news briefing.

Asian shares rose for a second day on Tuesday and the dollar firmed after Kim’s comments further eased tension and prompted investors to move back into riskier assets after a sharp selloff last week. [MKTS/GLOB]

Kim Dong-yub, a professor and a military expert at Kyungnam University’s Institute of Far Eastern Studies in Seoul, urged caution in assuming North Korea was bluffing with its missile threats.

“There is no stepping back for North Korea. Those who don’t know the North very well fall into this trap every time (thinking they are easing threats) but we’ve seen this before.”

The United States and South Korea remain technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

North Korea is currently holding three U.S. citizens it accuses of espionage or hostile acts but now was not the right time to discuss them, KCNA cited a foreign ministry spokesman as saying in a separate report.

Pyongyang has in the past used detainees to extract concessions, including high-profile visits from the United States, which has no formal diplomatic relations with North Korea.

U.S. officials have in recent days played down the risk of an imminent conflict while stressing their preparedness to respond militarily to any attack from North Korea.

Mattis said on Monday the U.S. military would know the trajectory of a missile fired from North Korea within moments and would “take it out” if it looked like it would hit the U.S. Pacific territory.

“The bottom line is, we will defend the country from an attack; for us (U.S. military) that is war,” Mattis said.

On Guam, home to a U.S. air base, a Navy installation, a Coast Guard group and roughly 6,000 U.S. military personnel, residents expressed some relief at the lessening of tensions.

“I’m reading between the lines that I don’t see an imminent threat,” Guam Lieutenant Governor Ray Tenorio told a media briefing in the island’s capital of Hagatna.

For an interactive on North Korea’s missile capabilities, click: http://fingfx.thomsonreuters.com/gfx/rngs/NORTHKOREA-MISSILES/010041L63FE/index.html

(Additional reporting by Soyoung Kim and Jane Chung in Seoul, Tim Kelly in Tokyo, Ben Blanchard in Beijing and Joseph Campbell in Guam; Writing by Lincoln Feast; Editing by Michael Perry and Nick Macfie)

Korea tensions ease slightly as U.S. officials play down war risks

A South Korean soldier stands guard at a guard post near the demilitarized zone separating the two Koreas in Paju, South Korea, August 14, 2017.

By Christine Kim and Ben Blanchard

SEOUL/BEIJING (Reuters) – Tension on the Korean peninsula eased slightly on Monday as South Korea’s president said resolving North Korea’s nuclear ambitions must be done peacefully and U.S. officials played down the risk of an imminent war.

Concern that North Korea is close to achieving its goal of putting the mainland United States within range of a nuclear weapon has caused tension to spike in recent months.

U.S. President Donald Trump warned last week that the U.S. military was “locked and loaded” if North Korea acted unwisely after threatening to land missiles in the sea near the U.S. Pacific territory of Guam.

“There must be no more war on the Korean peninsula. Whatever ups and downs we face, the North Korean nuclear situation must be resolved peacefully,” South Korean President Moon Jae-in told a meeting with senior aides and advisers.

“I am certain the United States will respond to the current situation calmly and responsibly in a stance that is equal to ours,” he said.

U.S. Defense Secretary Jim Mattis and Secretary of State Rex Tillerson sent a conciliatory message to North Korea in an op-ed piece in the Wall Street Journal on Sunday.

“The U.S. has no interest in regime change or accelerated reunification of Korea. We do not seek an excuse to garrison U.S. troops north of the Demilitarized Zone,” the officials said, addressing some of Pyongyang’s fears that Washington ultimately intends to replace the reclusive country’s leadership.

The article took a softer tone on North Korea than the president, who warned Pyongyang last week of “fire and fury” if it launched an attack.

Mattis and Tillerson underlined that the United States aims “to achieve the complete, verifiable and irreversible denuclearization of the Korean Peninsula and a dismantling of the regime’s ballistic-missile programs.”

“While diplomacy is our preferred means of changing North Korea’s course of action, it is backed by military options,” they said.

The United States is adopting a policy of “strategic accountability” towards North Korea, the officials wrote, but it is not clear how this significantly differs from the “strategic patience” Korea policy of former President Barack Obama.

A global index of stocks rose, after fears of a U.S.-North Korea nuclear standoff had driven it to the biggest weekly losses of 2017, while the dollar also strengthened.

U.S. Central Intelligence Agency Director Mike Pompeo said North Korean leader Kim Jong Un might conduct another missile test but talk of being on the cusp of a nuclear war was overstating the risk.

“I’ve seen no intelligence that would indicate that we’re in that place today,” Pompeo told “Fox News Sunday”.

However, North Korea reiterated its threats, with its official KCNA news agency saying “war cannot be blocked by any power if sparks fly due to a small, random incident that was unintentional”.

“Any second Korean War would have no choice but to spread into a nuclear war,” it said in a commentary.

The United States and South Korea remain technically still at war with North Korea after the 1950-53 Korean conflict ended with a truce, not a peace treaty.

MISSILE DOUBTS

South Korean Vice Defence Minister Suh Choo-suk agreed North Korea was likely to continue provocations, including nuclear tests, but did not see a big risk of the North engaging in actual military conflict.

Suh again highlighted doubts about North Korea’s claims about its military capability.

“Both the United States and South Korea do not believe North Korea has yet completely gained re-entry technology in material engineering terms,” Suh said in remarks televised on Sunday for a Korea Broadcasting System show.

Ukraine denied on Monday that it had supplied defense technology to North Korea, responding to an article in the New York Times that said North Korea may have purchased rocket engines from Ukrainian factory Yuzhmash.

Tension in the region has risen since North Korea carried out two nuclear bomb tests last year and two intercontinental ballistic missile tests in July, tests it often conducts to coincide with important national dates.

Tuesday marks the anniversary of Japan’s expulsion from the Korean peninsula, a rare holiday celebrated by both the North and the South. Moon and Kim, who has not been seen publicly for several days, are both expected to make addresses on their respective sides of the heavily militarised border.

Trump has urged China, the North’s main ally and trading partner, to do more to rein in its neighbor, often linking Beijing’s efforts to comments around U.S.-China trade. China strenuously rejects linking the two issues.

Trump will issue an order later on Monday to determine whether to investigate Chinese trade practices that force U.S. firms operating in China to turn over intellectual property, senior administration officials said on Saturday.

Chinese Foreign Ministry spokeswoman Hua Chunying said that Beijing has said many times the essence of China-U.S. trade and business ties is mutual benefit and that there is no future in any trade war between China and the United States.

“The (Korean) peninsula issue and trade and business issues are in a different category from each other,” Hua added. “On these two issues, China and the United States should respect each other and increase cooperation. Using one issue as a tool for exerting pressure on another is clearly inappropriate.”

China’s Commerce Ministry issued an order on Monday banning imports of coal, iron ore, lead concentrates and ore, lead and sea food from North Korea, effective from Tuesday.

The move followed the announcement of U.N. sanctions against North Korea this month which have to be enforced within 30 days by member states.

U.S. Joint Chiefs of Staff Chairman Joseph Dunford told South Korea’s Moon in a meeting on Monday that U.S. military options being prepared against North Korea would be for when diplomatic and economic sanctions failed, according to Moon’s office.

(Writing by Lincoln Feast and Alistair Bell; Editing by Raju Gopalakrishnan and James Dalgleish)