Beijing’s South China Sea Optimism at Odds With Regional Worries

(Bloomberg) --

Southeast Asia's foreign ministers warned that continued incidents in the South China Sea have “eroded trust” and may undermine regional stability, the 10-nation bloc said in a joint communique on Wednesday.

Their concerns were aired the same day China's Foreign Minister Wang Yi touted a preliminary draft on a code of conduct between the two sides meant to end the decades-long conflict over the disputed waters.

"We discussed the situation in the South China Sea, during which concerns were expressed by some ministers on the land reclamations, activities and serious incidents in the area, which have eroded trust and confidence, increased tensions and may undermine peace, security and stability in the region,” his Southeast Asian counterparts said in the communique.

“We emphasized the importance of non-militarization and self-restraint in the conduct of all activities by claimants and all other states,” the document read.

China Upbeat

Although Wang acknowledged that disputes exist, he remained optimistic that a consensus on a code of conduct could occur ahead of schedule within three years, saying during the sideline briefing that China and Asean could “absolutely” reach agreement on the sea.

“I believe that progress shows that China and Asean countries have the ability, the wisdom and the will to reach consensus on the CoC,” he said, referencing the South China Sea. he added that non-regional countries should not “sow distrust” between the two sides.

Indonesian Foreign Minister Retno Marsudi tweeted that her country welcomed the progress -- and hoped it would be reflected on the ground.

Tensions have been building over Asia's most complex territorial dispute, which involves a waterway that carries more than $3 trillion in trade each year. Several high-profile incidents in recent months have highlighted the increased dangers. Vietnam and China are engaged in a weeks-long standoff over near an oil drilling operation in the waters, while in June a Chinese vessel collided with a Philippine trawler near the islands further to the south, leaving 22 Filipino fishermen stranded at sea.

“Stability in the South China Sea serves the common interests of China and all other little states," Wang said, adding the situation had improved in recent years. “At the same time it is true that between relevant countries there are some historical maritime disputes.”

‘Asean Divided'

Most Asean countries don't want to offend China, which may stifle the development of a detailed code of conduct, said Paul Chambers, lecturer at Naresuan University's College of ASEAN Community Studies in northern Thailand.

“It keeps Asean divided,” Chambers said. “Most other countries do not want to offend China. And we have to remember that the Duterte government has only recently adopted a more cautious policy toward China following China's sinking of a Philippine fishing boat in disputed waters.”

Still, as China has become more aggressive in asserting its claim to vast swathes of the South China Sea, the U.S. has deepened its criticism, last week describing Beijing's moves as “bullying behavior.”

U.S. Secretary of State Michael Pompeo is due to arrive in Bangkok on Thursday, where he will hold three-way talks with Japanese Foreign Minister Taro Kono and South Korean Foreign Minister Kang Kyung-wha. This trip should also have been the first chance since June for Pompeo to hold working-level meetings with the North Koreans. But the North Korean Foreign Minster Ri Yong Ho skipped the Asean forum, leaving the country's ambassador to Thailand to attend.

The Asean ministers also urged all sides to rely on dialogue to realize lasting peace on the Korean peninsula, and said negotiations over the Regional Comprehensive Economic Partnership -- a Beijing-backed 16-nation trade deal that accounts for 3.5 billion people and $22.5 trillion in gross domestic product -- should be concluded by year end.

And they addressed the Rohingya Muslim crisis in Myanmar, agreeing on the need for adequate resources to carry out the repatriation of hundreds of thousands of refugees who fled from into Bangladesh, and on a solution that addressed the root causes of the crisis.

Singapore's Minister for Foreign Affairs, Vivian Balakrishnan, said the safe and dignified repatriation of Rohingya remained an immediate priority, noting racial and ethnic discrimination remained a challenge in all societies.

--With assistance from Bibhudatta Pradhan and Natnicha Chuwiruch.

To contact the reporters on this story: Philip J. Heijmans in Bangkok at pheijmans1@bloomberg.net;Siraphob Thanthong-Knight in Bangkok at rthanthongkn@bloomberg.net

To contact the editors responsible for this story: Ruth Pollard at rpollard2@bloomberg.net, Karen Leigh