South China Sea takes centre stage at U.S.-ASEAN summit

By Jeff Mason and Bruce Wallace
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U.S. President Obama hosts a meeting with leaders from the ASEAN during a summit held at Sunnylands in Rancho Mirage

U.S. President Barack Obama hosts a meeting with leaders from the Association of Southeast Asian Nations (ASEAN) during a summit held at Sunnylands in Rancho Mirage, California February 16, 2016. From left are Thailand Prime Minister Prayuth Chan-ocha, Singapore Prime Minister Lee Hsien Loong, Obama, Philippine President Benigno Aquino and Malaysia Prime Minister Najib Razak. REUTERS/Kevin Lamarque

By Jeff Mason and Bruce Wallace

RANCHO MIRAGE, Calif. (Reuters) - U.S. President Barack Obama and Southeast Asian leaders turned their attention to China on Tuesday on the second day of a summit intended to improve commercial links and provide a united front on maritime disputes with Beijing.

After a first day discussing trade and economic issues at the Sunnylands resort in California, Obama and his Association of Southeast Asian Nations counterparts were to try to arrive at a common position on the South China Sea, where China and several ASEAN states have conflicting claims.

Not all the 10 ASEAN nations agree on how to handle the disputes and U.S. officials want a statement calling for China to follow international law and handle disputes peacefully.

"We will be continuing to work with our ASEAN partners on a potential statement that we might issue together," White House national security adviser Susan Rice said on Monday.

She said past statements had underscored a "shared commitment to a peaceful resolution of disputes, freedom of commerce and navigation, the rule of law, and the necessity of disputes being resolved through peaceful, legal means."

Obama is expected to address the issue at a news conference at the conclusion of the summit around 1:30 PST (2100 GMT.)

On Monday, Vietnamese Prime Minister Nguyen Tan Dung urged Washington to use a stronger voice and "more practical and more efficient actions" to prevent militarization and island-building in the South China Sea, the Hanoi government said.

China claims most of the South China Sea. ASEAN members Malaysia, the Philippines, Brunei and Vietnam have rival claims.

The United States has criticized China’s building of artificial islands and facilities in the sea and has sailed warships close to disputed territory to assert the right to freedom of navigation.

China accused Washington of seeking maritime hegemony through such patrols.

On Monday, Washington responded to a weekend report in The Diplomat magazine that said China was building a helicopter base at Duncan Island in the Paracel island chain by calling on all claimants to halt construction and militarization of outposts.

"Such a reciprocal halt would help to lower tensions and create space for diplomatic solutions,” State Department spokeswoman Katina Adams said, repeating a call on China and ASEAN to conclude a “meaningful” Code of Conduct for the South China Sea as soon as possible.

The White House also has emphasized non-China related aspects at Sunnylands and CEOs of IBM, Microsoft and Cisco were brought into Monday’s private sessions with the leaders to help strengthen commercial ties.

"The potential for deepening our economic engagement is tremendous," U.S. Commerce Secretary Penny Pritzker said. Monday’s discussions ranged from the need for capital to creating an entrepreneurial culture in Asia that is prepared to tolerate business failure.

But even business leaders are watching the South China Sea.

"What keeps us up at night is that one of the big tension areas is the South China Sea," said Alexander Feldman, president of the U.S.-ASEAN Business Council.

"We would like as a business community to see those differences and overlapping claims be addressed in a way that is done though discussion rather than military confrontation."

(Additional reporting by David Brunnstrom; Editing by Larry King and Bill Trott)