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* Ahead of China trip, Clinton says “threats” create more

risk

* Rising tensions raise spectre of military conflict

* Clinton hopes for progress by November East Asia Summit

By Andrew Quinn

JAKARTA, Sept 3 (Reuters) – China and its neighbours in

Southeast Asia must move to draw up a code of conduct in coming

months to help resolve disputes in the South China Sea, and

should refrain from threats and coercion that have sent tension

skyrocketing, U.S. Secretary of State Hillary Clinton said on

Monday.

Clinton, visiting Indonesia ahead of a trip to China this

week, said she would tell Beijing and other claimants that it

was essential to get faltering diplomacy back on track and move

toward a deal.

“The United States does not take a position on competing

territorial claims over land features, but we believe the

nations of the region should work collaboratively together to

resolve disputes without coercion, without intimidation, without

threats and certainly without the use of force,” she said.

The South China Sea is one of a number of potential

flashpoints that have emerged since the Obama administration

announced it was “pivoting” U.S. attention to the Asia-Pacific

following years of military engagement in wars in Iraq and

Afghanistan.

Other disputes over maritime territory involving China and

key U.S. allies South Korea and Japan have also sharpened,

adding to strain on U.S.-Chinese relations as both countries

make their way toward political transitions this year.

Clinton’s talks in Indonesia focused on the aftermath of

July’s summit of the 10-member Association of Southeast Asian

Nations (ASEAN), where efforts to agree on a common approach to

territorial tensions with China collapsed in disarray, raising

fears of increased friction..

Beijing’s assertion of sovereignty over a vast stretch of

the South China Sea has set it directly against Vietnam and the

Philippines, while Brunei, Taiwan and Malaysia also lay claim to

other parts of the region, making it Asia’s biggest potential

military troublespot.

China has resisted proposals for a multilateral code of

conduct, preferring to try to negotiate disputes with each of

the far less powerful individual claimants.

It has also stepped up its activity in the region, including

establishing a military garrison on a disputed island, and

accused Washington of seeking to stir up trouble far from home.

MECHANISM

Clinton will travel to Beijing for Wednesday talks with top

Chinese officials including outgoing President Hu Jintao and

Vice President Xi Jinping, the man tipped to replace him at

China’s paramount leader following a Communist Party congress

later this year.

She said her message would be that it was time to calm to

the waters and that a mutually agreed code of conduct was the

best way to do this.

“It is critical for the work that has begun on the code of

conduct to continue. The United States believes very strongly

that no party should take any steps that would increase tensions

or do anything that could be viewed as coercive or intimidating

to advance their territorial claims,” Clinton said.

“It is important that there be a mechanism for resolving

the potential for the outbreak of conflict or miscalculation by

any party,” suggesting this could be a goal for the East Asia

Summit leaders conference in Cambodia in November.

“This is in everyone’s interest, and it is time for

diplomacy,” Clinton said. “I will be discussing these matters in

Beijing with Chinese leaders. I think we can make progress

before the East Asia Summit.”

Indonesia, the region’s biggest country and one seen as

neutral given it has no claim to the disputed waters, has taken

on the role of mediator, and Foreign Minister Marty Natalegawa

said he was confident that the ASEAN nations were now working in

concert on the South China Sea issue.

Natalegawa said he had had “frank” discussions on the

subject with Chinese Foreign Minister Yang Jiechi during a

recent round of Indonesian diplomacy aimed at getting all

parties back into talks.

“I think the track is quite clear what’s ahead of us,”

Natalegawa said. “Absent the diplomatic process, we can be

certain of more incidents and more tension for the region.”

Clinton’s current trip began in the South Pacific – another

corner of the world where Beijing is fast expanding its

influence – and she will continue on from China for further

talks in East Timor and Brunei.

She will round out the week in the Russian port city of

Vladivostok for the annual Asia Pacific Economic Cooperation

(APEC) forum, a further chance to press the theme of U.S.

engagement with regional leaders.