China’s Xi urges improved SE Asia ties in Indonesia speech

Chinese President Xi Jinping and his wife Peng Liyuan at the Hero's Cemetary in Jakarta, Indonesia on October 3, 2013

JAKARTA - China's President Xi Jinping said Thursday territorial disputes with Southeast Asia should be resolved in a "peaceful manner" as he sought to mend frayed ties during the first speech by a foreign leader to the Indonesian parliament.

Making his first visit to the region since taking power in March, Xi turned to the issue of maritime territorial disputes - China's increasingly assertive claims to almost the entire South China Sea have sparked territorial rows in recent times, in particular with the Philippines and Vietnam.

Xi said that Beijing and the 10-member Association of Southeast Asian Nations (ASEAN) should resolve territorial and maritime disputes "in a peaceful manner so as to safeguard regional stability and peace".

"Southeast Asia is one important hub of the maritime Silk Road. China is ready to increase maritime cooperation with ASEAN," he said.

"China attaches great importance to Indonesia's role in ASEAN and is ready to work together with Indonesia and other ASEAN countries to make the two sides share the same prosperity."

Xi chose to make his comments in Indonesia, a country that does not have any disputes with China over the strategically important sea and that has often acted as a mediator in rows.

The fact that Xi is the first foreign leader to address the Indonesian parliament shows a remarkable improvement in relations between Jakarta and Beijing over the past 20 years.

Indonesia broke off diplomatic relations with China in the 1960s, accusing the state of supporting an attempted coup by the Indonesian communist party.

Ties remained frosty for more than two decades and diplomatic relations were only restored in the 1990s.

The Chinese president arrived on Wednesday to a ceremonial welcome in the capital Jakarta and held talks with President Susilo Bambang Yudhoyono.

Chinese and Indonesian ministers also signed memoranda of understanding at the presidential palace to enhance cooperation in several industries, including tourism, technology and space research.

The Indonesian and Chinese central banks also agreed to a 100 billion yuan (S$20.4 billion) currency swap deal to shore up the ailing rupiah if necessary.

Trade between China and Indonesia has soared from $16.5 billion (S$20.6 billion) in 2005 to more than $66.2 billion (S$82.7 billion) in 2012, while Chinese direct investment has also increased.

After his visit to Indonesia, Xi will head to neighbouring Malaysia and then to a meeting of the Asia-Pacific Economic Cooperation forum on the Indonesian resort island of Bali.