Kerry ups ante in struggle to crack South China Sea rules

By Greg Torode and Manuel Mogato HONG KONG/MANILA (Reuters) - Pressure is mounting on China and Southeast Asia to agree a code of conduct to keep the peace in the disputed South China Sea, but Beijing is warning of a long road ahead. Only last week, U.S. Secretary of State John Kerry urged China and the Association of South East Asian Nations (ASEAN) to work out rules to ease tensions after a fresh Chinese campaign of assertiveness in the region. "The longer the process takes, the longer tensions will simmer and the greater the chance of a miscalculation by somebody that could trigger a conflict," Kerry said in Indonesia during a visit to Asia. ASEAN officials told Reuters that a working group of officials from China and the 10-member association would resume negotiations in Singapore on March 18 after agreeing to accelerate talks last year that have made little headway so far. The code of conduct is intended to bind China and ASEAN to detailed rules of behavior at sea - all geared to managing tensions long-term while broader territorial disputes are resolved. It stems from a landmark 2002 declaration between ASEAN and China, then hailed as the first significant agreement between the grouping and an outside power. Much is at stake. China claims about 90 percent of the South China Sea, displaying its reach on official maps with a so-called nine-dash line that stretches deep into the maritime heart of Southeast Asia. Vietnam, the Philippines, Malaysia, Brunei and Taiwan also have claims to the sea, which sits above potentially rich but largely unexplored oil and gas deposits. The South China Sea carries an estimated $5 trillion in ship-borne trade annually - including oil imports by China, Japan and South Korea. Kerry also raised the issue in Beijing, where Chinese officials generally bristle at Washington's growing involvement in China's territorial disputes. China wanted to try to reach a deal, Kerry said. In the meantime, Kerry said it was vital for countries to refrain from "coercive or unilateral measures" to assert their claims - an apparent reference to a string of recent moves by China, from expanded naval patrols to new fishing restrictions, that continue to rattle a nervous region. The Chinese Foreign Ministry said Beijing was sincere about pushing for a code of conduct. "The burden is heavy and the road is long for talks on the code of conduct," it said in a statement sent to Reuters. Philippines Foreign Secretary Albert del Rosario last week said ASEAN was seeking "an expeditious conclusion" to talks. PLAYING FOR TIME Many regional officials and military officers have long feared Beijing wanted to "play for time" - wary of being tied down and preferring instead to buttress its controversial claims while pressuring weaker neighbors into separate talks over specific disputes. An earlier unofficial draft code of conduct drawn up by Indonesia outlines an agreement that ties the region to refraining from even routine military exercises in disputed waters and settling disputes according to the U.N. Law of the Sea or little-used ASEAN procedures. China has objected to efforts by Manila to challenge its claims under the Law of the Sea at the Permanent Court of Arbitration at The Hague. The Indonesian draft, seen by Reuters, also provides for full freedom of navigation and overflight while setting detailed rules for preventing accidents at sea. The occupation of previously unoccupied features at sea is outlawed. The document has yet to be formally tabled but has circulated within ASEAN for more than a year as a possible basis for discussions, ASEAN diplomats said. China was reluctant to be presented with a "pre-cooked" draft, said Termsak Chalermpalanupap, a political analyst at Singapore's Institute of South East Asian Studies and a former staffer at the ASEAN secretariat in Jakarta. Many ambiguities remained about China's position, Termsak added. "We still have to find out if they really want a legally binding code," he said. ASEAN leaders want a code with teeth given the inadequacies of the 2002 declaration in preventing rising tensions, he said. Beijing is expected to seek to thwart any push to include the Paracel islands - a strategic archipelago south of Hainan Island that is occupied by China but also claimed by Vietnam, in any final deal. Any Chinese attempt to create an air defense identification zone in the South China Sea - something Washington has warned against - is widely expected by regional analysts and diplomats to include the Paracels. Beijing has denied reports it has plans for a zone in the South China Sea. Its announcement in November of such a boundary in the East China Sea, where aircraft have to identify themselves to Chinese authorities, drew condemnation from Washington. Carl Thayer, a South China Sea expert at the Australian Defence Force Academy in Canberra, said he had noticed a cautious optimism surrounding the prospect of fresh talks. "The atmospherics have definitely improved but I do fear we are still talking about an effort that is going to be protracted if not interminable," he said. (Additional reporting by Ben Blanchard in BEIJING. Editing by Dean Yates)