UPDATE 1-Panetta seeks closer Sino-U.S. ties as China military expands

By David Alexander

TOKYO, Sept 16 (Reuters) - U.S. Defense Secretary Leon Panetta will look for ways to deepen military relations with China during a visit to Asia this week, even as he works to bolster U.S. alliances in the region as part of a strategic shift that Beijing views with concern.

Panetta, who arrived in Tokyo on Sunday, is making his third trip to Asia as defense secretary at a time when China is embroiled in testy territorial disputes with Japan and the Philippines, two key U.S. allies in the region.

Scores of cities across China erupted in anti-Japan protests at the weekend in which demonstrators looted shops and attacked Japanese cars and restaurants. They were angered by Japan's decision on Tuesday to buy a tiny group of disputed islands which Tokyo calls the Senkaku and Beijing calls the Diaoyu from a private Japanese owner.

Panetta will discuss with Japanese officials the realignment of U.S. military basing in Japan and expanding ballistic missile defense cooperation before heading to Beijing to try to deepen and broaden military-to-military ties.

He will wraps up his tour with defense cooperation talks in New Zealand.

Senior U.S. and Chinese defense officials have made an effort to push their military relationship forward since it resumed a year and a half ago after a bitter break over U.S. arms sales to self-ruled Taiwan, which Beijing views as a breakaway province.

However, despite high-level visits by top officials, relations between the Pentagon and the People's Liberation Army are marked by wariness and mistrust.

"This is a relationship that has in the past been characterized by a lot of ups and downs and an on-again, off-again cycle that reflected the lack of a solid foundation ... sufficient to weather the type of turbulence that's natural in a relationship that's as broad and complex as the one that we have with China," a senior U.S. defense official said on condition of anonymity.

"We're not there yet in terms of where we'd like to be in our military-to-military relationship, but visits like the one that Secretary Panetta is going to have ... sustain the forward progress that we've been able to make over the past several months."

U.S. defense officials pressed for a restoration of military-to-military ties with China due to concerns about the direction of Beijing's military modernization efforts, including development of anti-ship missiles, stealth aircraft and its first aircraft carrier.

Many of the weapons worry U.S. military leaders because they appear to be aimed at countering U.S. strengths and denying U.S. access to waterways in the region.

U.S. defense officials believe that by engaging in cooperative efforts with the Chinese military, the two sides will gain greater familiarity with each other's operations and develop transparency and communications channels that can help avoid misunderstandings that could lead to conflict.

But Dean Cheng, a China analyst at the conservative Heritage Foundation think tank in Washington, said it was not clear exactly what the upside to renewed ties had been.

"The relationship is not in the deep freeze, but there is, at best, limited evidence of any kind of progress," he said. "The Chinese military remains averse to transparency as the West understands it and remains hostile to things like U.S. military ships transiting China's EEZ (exclusive economic zone) without prior permission."

The U.S. push for deeper ties could be especially tough-going at a time when China is not only squaring off with its neighbors over potentially resource-rich islands in the East and South China Seas, but also hunkered down for a once in a decade leadership transition.

The United States is officially neutral on the territorial disputes and has urged the parties involved to settle their disputes peacefully, a point Panetta said he would raise in Beijing.

'WE DON'T WANT PROVOCATIVE BEHAVIOR'

"The United States does not take a position with regards to territorial disputes, but we do urge not just China but the other countries that are involved to engage in a process in which they can peacefully resolve these issues," Panetta told reporters on his plane en route to Tokyo.

He said he would encourage China to engage in the dispute-resolution process promoted by ASEAN, the Association of Southeast Asian Nations, in an effort to try to resolve the disagreements peacefully.

"What we don't want is to have any kind of provocative behavior on the part of China or anybody else result in conflict," Panetta said. "And my purpose will be to urge that they engage in the effort by the ASEAN nations to try to work out a format for resolving these issues."

China's claims over much of the South China Sea, including the Spratly and Paracel islands, have put it at loggerheads with Vietnam, the Philippines and other Southeast Asian nations. A similar dispute has set China against Japan in the East China Sea.

China has been irked by the U.S.-backed proposals for a multilateral approach to resolving such disputes, preferring to negotiate separately with each of the far less powerful Asian claimants.

Panetta said he hoped to talk to Chinese defense officials about cooperating on a range of additional issues where the two countries have common interests, including nuclear proliferation, freedom of navigation, piracy, trade and humanitarian assistance.

"These are all areas where we can work together to try to provide security support for the Asia-Pacific region that will enhance the ability of that region to be able to prosper in the future," Panetta said. "Those are some of the areas that I'd like to work on."

Even if Panetta is successful in moving U.S.-China cooperation to a new level, it is still not clear that the relationship will deliver the kind of communications U.S. officials hope is possible.

"Part of the question is what we want out of the mil-mil (military-to-military) relationship," Cheng said. "If it is simply to have a channel available, then it is succeeding. If, however, it is to have a channel of communications that can avert a crisis or tamp down escalation at critical moments, that is unlikely to happen under any circumstances.

"The PLA's procedures and organization, including the important role of political officers, does not match against how the US tends to operate."