Host Malaysia avoids Chinese ire over disputed sea at ASEAN summit

KUALA LUMPUR/MANILA - Malaysia is steering clear of criticising China's actions in the South China Sea at a meeting of Southeast Asian leaders next week, a draft end-statement seen by Reuters shows, despite a push by the Philippines to denounce Beijing's reclamation work.

Philippines President Benigno Aquino has called on leaders of the Association of Southeast Asian Nations (ASEAN) to issue a collective statement condemning China's reclamation in the disputed waters at the end of their Kuala Lumpur meeting.

The summit starts on Sunday.

China says ASEAN is not a party to the South China Sea dispute.

A draft copy of the concluding statement by Malaysian Prime Minister Najib Razak devotes two paragraphs to tensions in the energy-rich waters, but stops short of taking sides in the matter, a source with direct knowledge of ASEAN issues told Reuters.

China's actions in the South China Sea have created a deep divide between the 10 ASEAN members, four of which have competing claims over the disputed territory.

China claims most of the area, with overlapping claims from the Philippines, Vietnam, Malaysia, Brunei and Taiwan.

Disputes over how to address the increasingly assertive role of China - an ally of several ASEAN states - in the strategic waters of the South China Sea has placed the issue squarely as Southeast Asia's biggest potential military flashpoint.

Recent satellite images show China has made rapid progress in building an airstrip suitable for military use in the South China Sea's Spratly Islands and may be planning another.

ASEAN summit host Malaysia, which has close economic ties with China, has traditionally downplayed tensions in the South China Sea.

An advance copy of Najib's statement, as of April 16, makes no mention of China's reclamation work in the area.

It emphasises the importance of "creating, maintaining and enhancing mutual trust and confidence (and) exercising self-restraint in the conduct of activities".

The Malaysian Prime Minister's Office did not immediately respond to a request for comment.

Similarly, Cambodia, as host three years ago, refused to be drawn on China's actions in the disputed waters and the summit broke down. Then, for the first time in the group's 45-year history, a customary communique was not issued.

Unlike the summit in Cambodia, a final communique is not expected from the meeting in Kuala Lumpur, leaving the final word to Najib.

"I think ASEAN should not avoid this problem, it will not go away," a Philippine foreign ministry official, who asked not to be identified, told Reuters.

"Before we discuss the situation in the Middle East, in Libya and in the Korean peninsula, let's talk about this problem first because it affects the region."

The Philippines and Vietnam have been the most vocal critics of China's reclamation works in the South China Sea.

Their leaders are due to meet on the sidelines of the ASEAN summit to discuss a pact strengthening their ties in the face of China's increasingly assertive claims, Philippine officials say.