China's Xi Sidesteps SE Asia Pressure Over South China Sea Disputes

By Kanupriya Kapoor 4 October 2013

JAKARTA — Chinese President Xi Jinping showed no sign of bending to Southeast Asian pressure to resolve increasingly irascible territorial disputes over the South China Sea on Thursday, simply repeating calls for dialogue.

Xi, in the first address by a foreign leader to Indonesian MPs, made no reference to regional demands, echoed in Washington, that Beijing deal with the rival claims through multilateral talks rather than with individual negotiations.

The issue is certain to overshadow two regional summits next week that Xi will attend. But while Xi is touring Southeast Asia, including signing off on multibillion dollar deals with Indonesia, U.S. President Barack Obama has had to cancel trips to the Philippines and Malaysia because of the U.S. government shutdown.

The U.S. crisis has also put into doubt Obama’s attendance at the two regional summits at a time when Washington has been promoting its strategy of putting more emphasis on its ties with Asia.

“As for the disagreements and disputes between China and certain Southeast Asian nations on territorial sovereignty and maritime rights, both sides must always uphold the use of peaceful methods …to maintain the broad picture of bilateral relations and regional stability,” he told MPs on the second and last day of his visit to Southeast Asia’s largest country.

“China’s development is a force for peace and friendship in the world, bringing development opportunities for Asia and the world and not threats.”

Last month, the Philippines accused China of violating an informal code of conduct in the South China Sea, home to some of the world’s most vital trade routes, by planning new structures on a disputed shoals.

The disputes have centred on concerns that China’s use of its growing naval might to back claims to much of the oil- and gas-rich sea could spark a military clash.

Four of the 10 members of the Association of Southeast Asian Nations (Asean), including Vietnam and the Philippines but not Indonesia, have overlapping claims with China. Indonesia has offered to mediate but has in the past criticized China for not showing more restraint over the disputes.

Next Tuesday sees the Asia-Pacific Economic Cooperation (APEC) summit in the Indonesian resort island of Bali. After that, Xi and several other leaders will head to Brunei for the East Asia summit.

“What we wanted to hear from President Xi Jinping was whether China has the goodwill to resolve the South China Sea issue … But he didn’t address the issue at all, so I’m disappointed,” legislator Tantowi Yahya told Reuters.

Xi has used his visit try to lift relations in the region, saying China hoped trade with ASEAN would reach $1 trillion by 2020. He flies later in the day to Malaysia.s

$33 Billion Worth of Deals

Indonesian companies secured $32.8 billion of financing and investment from Chinese firms on Thursday during the state visit, an Indonesian government official said.

Xi, in his first visit as president to southeast Asia’s biggest country, became the first foreign leader to address Indonesian lawmakers in parliament.

He said China hoped trade with the 10-member Association of Southeast Asian Nations (ASEAN) would reach $1 trillion by 2020, from $320 billion in 2012, according to ASEAN’s website.

Negotiated by companies including Indonesian state-owned firms and privately held Sinar Mas Group, deals included a $1.8 billion loan to PT OKI Pulp & Paper Mills – an affiliate of Sinar Mas – to build a mill in Sumatra, and funding for five Boeing 777-300 ER planes for PT Garuda Indonesia.

Several Chinese companies also pledged to invest in Indonesia, including Hangzou Jinjian Group Co. Ltd, which plans to spend $600 million on a bauxite-processing complex there, according to the government official.