MANILA (Reuters) - U.S. Secretary of State Hillary Clinton on Wednesday urged claimants to the South China Sea not to resort to intimidation to push their cause in the potentially oil-rich waters, an indirect reference to China ahead of a regional leaders' summit.
Clinton reiterated that the United States wanted a candid discussion of the maritime dispute, which an Australian think tank warned earlier this year could lead to war, when the leaders gather in Bali, Indonesia, this week.
However, China says it does not want the issue discussed, putting it at loggerheads with the United States once again after they exchanged barbs over trade and currency at last week's meeting of Asia Pacific Economic Co-operation forum in Hawaii.
"The United States does not take a position on any territorial claim, because any nation with a claim has a right to assert it," Clinton said in Manila, while marking the 60th anniversary of the U.S.-Philippine Mutual Defence Treaty.
"But they do not have a right to pursue it through intimidation or coercion. They should be following international law, the rule of law, the U.N. Convention on Law of the Sea."
She said disputes in the sea lanes should be resolved through the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which defined rules on how countries can use the world's oceans and their resources.
That could embolden Southeast Asia's hand against China, which has said it would not submit to international arbitration over competing claims to the area, believed to be rich in natural resources and a major shipping lane.
China says it has historical sovereignty over the South China Sea and so supersedes claims of other countries, including the Philippines, Vietnam, Malaysia and Brunei.
"Introducing a contentious subject into the meeting would only affect the atmosphere of cooperation and mutual trust, damaging the hard-won setting of healthy development in the region," Chinese Foreign Ministry spokesman Liu Weimin said on Wednesday. "That's is beyond any doubt."
Estimates of proven and undiscovered oil reserves in the South China Sea range from 28 billion barrels of oil to as high as 213 billion barrels, U.S. figures showed in 2008. Gas deposits could be as high as 3.8 trillion cubic metres, the U.S. Geological Survey has estimated. Both would supply China with energy supplies for decades if proven.
China's resource needs and its risk-taking behaviour over staking its claim in the increasingly crowded sea lanes of the maritime region raise the possibility of armed conflict that could draw in the United States and other powers, the Lowy Institute said in a report in June.
Tensions flared again earlier this year with concerns raised over China's enforcement of its claim in areas also claimed by Vietnam and the Philippines, including the cutting of cables on survey ships, threats to ram some vessels and breaches of airspace by military aircraft.
On Tuesday, the Philippines criticised its South East Asian neighbours for failing to take a united stand against China.
"ASEAN is now at a critical junction of playing a positive and meaningful role to contribute in the peaceful resolution of the disputes in the South China Sea," said Foreign Secretary Albert del Rosario.
Manila wants ASEAN to be able to help resolve sensitive issues without letting them affect bilateral or multilateral relations, he said.
Smaller Southeast Asian claimants view a U.S. presence and a multilateral approach to negotiations as strengthening their stance against China's all-encompassing claim on the sea.
"President Obama will reaffirm our national interest in the maintenance of peace and security in the region and internationally," Clinton said.
She said that included freedom of navigation, the rule of law and unimpeded lawful commerce, with the United States seeing UNCLOS as the overriding framework for territorial disputes.
The shipping lanes of the South China Sea carry some $5 trillion in annual trade that the United States wants to keep open.
Additional reporting by Chris Buckley in Beijing; Writing by John Mair and Neil Fullick; Editing by Jason Szep and Ron Popeski