China's Xi says Asia faces 'new challenges' to stability

BOAO(AFP, REUTERS) - Chinese President Xi Jinping said on Sunday that Asia faced "new challenges" to its stability and warned no one should be allowed to throw the region into chaos as tensions mounted over North Korea.

Xi, delivering a speech at an annual international forum on the southern Chinese island of Hainan, did not mention the crisis on the Korean Peninsula or China's territorial disputes with Japan and Southeast Asian nations.

But he said there should be no tolerance for those who foster "chaos for selfish gains" and reiterated that China would "firmly" uphold its "sovereignty" and "territorial integrity".

Tensions have soared in recent weeks with North Korea threatening nuclear war after the United Nations imposed fresh sanctions over its latest atomic test and the US and South Korea launched joint war games.

"We need to make concerted efforts to resolve major difficulties to ensure stability in Asia," Xi said.

"Stability in Asia now faces new challenges as hot spot issues keep emerging and both traditional and non-traditional security threats exist," he added.

China has traditionally been North Korea's closest political ally since they fought together in the 1950-1953 Korean War and is Pyongyang's biggest trading partner.

Speaking more broadly, Xi called on the international community to push for a "vision of comprehensive security, common security and cooperative security".

Xi said that was necessary so the world could become a stage for the pursuit of "common development", as opposed to one "where gladiators fight each other".

"And no one should be allowed to throw a region, even the whole world, into chaos for selfish gains," he added.

Stressing that peace was pivotal for the future of the world's second biggest economy, Xi appealed to business and political leaders to use diplomacy and dialogue to resolve disputes and allow wealth to spread and solve problems.

"For Asia, development is still the top question, development is still crucial for solving many problems and conflicts," Xi said.

"Without peace, there is no need to talk about development," he added.

Painting a picture of a richer China in 2020, when the government expects average rural and urban incomes will be double 2010 levels, Xi said his country would increasingly export its wealth to its neighbours.

China will import $10 trillion (S$12.4 trillion) worth of goods a year five years from now, he said, and outbound investment will rise by a big margin. Domestic consumption, particularly retail consumption, will also continue to expand.

China imported $1.8 trillion worth of goods and services last year, up a meagre 4.3 percent from a year ago as its economy slumped into its worst downturn in 13 years.

But Xi was upbeat about the future, saying growth would follow when his government changes China's economic structure and financial system. He did not give details.

Australian Prime Minister Julia Gillard echoed Xi, saying "all countries in the region share a deep interest in strategic stability".

But Gillard, who has been critical of Pyongyang, singled out North Korea, saying the Korean Peninsula situation illustrated the potential consequences of conflict.

"There, any aggression is a threat to the interests of every country in the region," she said in her speech, hailing "the growing cooperation of all regional governments to prevent conflict on the Korean Peninsula and to counter North Korean aggression".

Alexander Downer, a former Australian foreign minister who listened to the speeches, said it was not surprising that Xi did not mention North Korea by name as it was not something a Chinese president would do.

"I thought he was alluding to it," Downer added.

"And I think in a very clever way, which was very reassuring to people."

It was Xi's first attendance at the Boao Forum for Asia since becoming China's president last month. He took over as head of the ruling Communist Party in November and now holds the country's two most powerful positions.

Touted as an Asian version of the World Economic Forum, the three-day Boao gathering has brought together leaders in government, business and academia in Asia and other continents every year since 2001 to discuss pressing issues in the region and the rest of the world.

Among political and financial leaders at this year's event are Myanmar President Thein Sein, International Monetary Fund managing director Christine Lagarde, Mexican President Enrique Pena Nieto and Yasuo Fukuda, a former Japanese prime minister.