U.S. hopes to revive stalled military ties with China

U.S. Deputy Secretary of State James Steinberg gestures during a news conference in Bishkek July 18, 2010.

WASHINGTON (Reuters) - The lack of sustained military ties between the United States and China is a key challenge for the two countries at a time of tensions in Asia, the U.S. No. 2 diplomat said on Tuesday.

Deputy Secretary of State James Steinberg said U.S. policymakers "continue to find a broad range of areas where we cooperate with China -- not only bilaterally, but regionally and globally" from economic recovery to climate change to the Iran nuclear issue.

But military-to-military ties -- which China put on hold in anger at U.S. arms sales to Taiwan earlier this year -- is an exception to a trend of broad official engagement, he said.

"The most important (challenge) ... is the continued unwillingness of China to deepen the mil-mil engagement," Steinberg said in remarks at the Nixon Centre in Washington.

"We continue to stress that this is not a favour to one country or the other, but is absolutely critical to manage this very complex process of China's own economic growth and military modernization," he said.

After the Obama administration notified Congress in January of plans to sell Taiwan up to $6.4 billion in arms, China broke off military-to-military contacts with the United States. In June, China turned down a proposed fence-mending visit by Defense Secretary Robert Gates.

In addition to dispute over Taiwan -- a self-ruled island over which China claims sovereignty -- U.S.-China security ties have been strained over joint U.S.-South Korean military exercises directed at North Korea but held in seas near China.

Steinberg said sustained, deepened bilateral military talks were necessary because of both specific disputes and a deeper disagreement over freedom of navigation in waters near China.

"It's frankly unproductive for China to see this as a benefit to be offered or withheld in relationship to other issues," he said.

The senior U.S. diplomat also explained the motive behind Secretary of State Hillary Clinton's move to raise sensitive territorial disputes in the South China Sea at the ASEAN Regional Forum (ARF) last week in Hanoi.

China was furious and accused Clinton of attacking Chinese interests in a disputed area rich in energy and key for shipping that Beijing had long succeeded in keeping off the ASEAN diplomatic agenda.

China has long-standing territorial disputes with Brunei, Malaysia, the Philippines and Vietnam.

The South China Sea, where the United States champions freedom of navigation but is neutral on territorial disputes, has been "bubbling around for a long time" and the issue is fraught with potential risks of incidents or ruinous military competition, Steinberg said.

"Frankly, the time had come to just make this more explicit and to bring it out in the open ... because it's clearly on everybody's mind," he said, referring to Southeast Asian countries that have sought to raise the issue in a multilateral setting.

(Reporting by Paul Eckert; editing by Mohammad Zargham)