South China Sea disputes may disrupt trade in Asia

TERRITORIAL disputes over the South China Sea pose a threat to trade in Asia, creating uncertainties that are bad for business, officials from the United States and Singapore warn.

In a news briefing here yesterday, US Commerce Secretary Penny Pritzker criticised China's decision to tow a deep-water oil rig 300km from Vietnam's shores. Such actions "are provocative and raise tensions, and we're very concerned about that", she said.

Ms Pritzker said China's "dangerous conduct and intimidation by (its) vessels operating in the area is not good".

"As it relates to the business environment, our belief is that it's important that there is certainty, and actions like these create uncertainty, which is not good for the business environment," she said.

In an separate interview with Bloomberg on Tuesday, Singapore Defence Minister Ng Eng Hen said the risk that territorial disputes will damage trade in Asia is "very real".

"It's completely artificial to think that there are somehow firewalls between trade and security," he said in an interview at the Ministry of Defence. "We shouldn't, from a security point of view, be dominating headlines every few other days, and I don't think it's necessarily a positive if this continues for the region. At some point, it may impact trade and our real economies."

The region should focus on shoring up economic links, as well as security ties, he said.

Mr Ng and Ms Pritzker were speaking after a forum of defence ministers and military leaders in Singapore over the weekend, where the US and China openly criticised each other over their strategies for the region and the maritime disputes.

Tensions in the South China Sea especially have been escalating since China towed an oil rig and began drilling for oil in waters also claimed by Vietnam.

China claims nearly all of the South China Sea, locking it into territorial disputes with not just Vietnam and the Philippines, but also with Malaysia and Brunei.

"China needs to articulate its own vision, and its own position in this new, revised world order," said Mr Ng. "Our approach has been that dialogue is essential, inclusivity is important."

The 10-member Association of South-east Asian Nations is seeking a code of conduct governing the South China Sea, although talks have made little progress.

Yesterday, China rejected a ruling by the United Nations tribunal in The Hague giving it six months to respond to a case filed by the Philippines over disputed waters, saying it has no plans to take part. China has said it prefers a bilateral approach to resolve the conflicts.