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China's top general criticises US exercises
by Staff Writers
Beijing (AFP) July 11, 2011

Oil falls on China, eurozone debt worries
New York (AFP) July 11, 2011 - Oil prices dropped Monday, pressured by growing market concerns about the slowing Chinese economy and the eurozone debt crisis.

New York's main contract, light sweet crude for delivery in August, closed at $95.15 a barrel, a drop of $1.05 from Friday's finish.

In London, Brent North Sea crude for August delivery shed $1.09 to settle at $117.24 a barrel.

On Friday New York's benchmark West Texas Intermediate contract shed nearly $2.50 after the release of a dismal June jobs report in the United States, the world's biggest oil-consuming country. The US economy added few new jobs and the unemployment rate unexpectedly rose to 9.2 percent.

"Not only are we seeing lowered demand expectations here in the United States but across the globe," said Phil Flynn, an energy analyst at PFGBEST.

China, the second-biggest oil consumer, reported Saturday its inflation rate accelerated in June to 6.4 percent, the highest level in three years.

Some analysts are concerned Beijing might go too far in tightening monetary policy to curb overheating in the economy.

"That really worried the markets because oil demand growth is predominantly coming from emerging markets," said Matt Smith at Summit Energy.

"And we've got the follow-through from last Friday -- the (US) employment report -- and then we've also got this risk of sovereign debt spreading to Italy and Spain."

Bond yields for those two eurozone countries hit record highs Monday as investors worried that Italy and Spain could be the next to sink into Europe's spreading debt crisis.

China's top military officer said Monday the timing of US naval exercises in the South China Sea was "inappropriate," after talks with his American counterpart aimed at cooling the territorial dispute.

General Chen Bingde urged the United States to be "more modest and prudent in words and deeds", amid growing tensions over China's claims in the strategic and potentially resource-rich region.

He also criticised Washington over its military spending and accused the US of "placing too much pressure on taxpayers" in the wake of the global economic crisis, in unusually provocative remarks before a foreign visitor.

"On various occasions, the US side has expressed that it does not have the intention to intervene in the disputes in the South China Sea," Chen told reporters after meeting Admiral Mike Mullen in Beijing.

"However, we are observing the latest joint exercises between the US and other countries, for example the Philippines and Vietnam.

"We acknowledge that those exercises were there in the past, however the timing of these joint exercises is inappropriate as we see it."

The Philippines recently finished 11 days of naval drills with the US Navy close to the South China Sea, although both sides emphasised the event is held annually and aimed at deepening defence ties.

Mullen is the first chairman of the US Joint Chiefs of Staff to visit China since 2007 and his trip comes as military ties between the two powers are tested by Beijing's growing assertiveness in the South China Sea.

In a joint press conference, Chen said the pair had "found a lot of common ground", but that there were still "different opinions on certain issues," and accused Washington of spending "so much money on the military."

"I know the US is still recovering from the financial crisis, it still has some difficulties in its economy... Isn't it placing too much pressure on taxpayers?"

Mullen, however, later said on Twitter: "Good discussions with my Chinese counterpart. Will not agree on everything but now is the time to focus on those things we CAN agree on."

Vietnam and the US are to hold joint naval activities this month, with the latter again saying they are long-planned and unconnected to recent tensions.

China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan have overlapping claims to parts of the South China Sea, which is believed to have vast oil and gas deposits, while its shipping lanes are vital for global trade.

Vietnam and the Philippines have in recent months accused Beijing of taking increasingly aggressive actions in staking its claims.

In May, Vietnam said Chinese marine surveillance vessels cut the exploration cables of an oil survey ship inside Hanoi's exclusive economic zone.

And Philippine President Benigno Aquino has accused China of inciting at least seven recent incidents, including one in which a Chinese vessel allegedly opened fire on Filipino fishermen.

In response, China has insisted it wants to resolve disputes peacefully but remains firm in its claims to most of the South China Sea, even waters within the Philippines' economic exclusion zone.

Speaking to reporters after arriving in Beijing on Sunday, Mullen said Washington was concerned about freedom of navigation, but suggested that the disputes would be "resolved peacefully".

With ties sometimes fraught between the two militaries, he stressed that the US was in no way seeking to contain China's dramatic rise, but said it would remain active in the Asia Pacific region for a long time.

Chinese Vice Foreign Minister Fu Ying, speaking in Hong Kong on Monday, meanwhile, said "diplomatic wisdom" between China, the Philippines and Vietnam was needed to "make sure that our differences will be contained".

Mullen is also expected to address rising tensions with North Korea and measures to boost security cooperation between China and the United States during his four-day trip.

He held talks Monday with China's vice president Xi Jinping, who is widely expected to take over as president next year, and will visit military bases in the eastern provinces of Shandong and Jiangsu on Tuesday.




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China urges 'wisdom' to resolve sea disputes
Hong Kong (AFP) July 11, 2011 - China on Monday told the Philippines and Vietnam to use "diplomatic wisdom" to resolve tensions in the South China Sea, amid criticisms that Beijing was being increasingly aggressive in its claims.

"It is important to manage the conflicting points," Chinese Vice Foreign Minister Fu Ying said in a speech on "China's peaceful development and international environment" in Hong Kong on Monday.

"It takes diplomatic wisdom from China, from Vietnam and from the Philippines to make sure that our differences will be contained, well-managed and we will be able to not allow the differences to affect our relationship.

"You could see we are moving in that direction," she said, acknowledging the countries in the territorial dispute all felt strongly about their claims.

China, the Philippines, Vietnam, Brunei, Malaysia and Taiwan have overlapping claims to parts of the South China Sea, which is believed to have vast oil and gas deposits, while its shipping lanes are vital for global trade.

Vietnam and the Philippines have in recent months accused China of taking increasingly aggressive actions in staking its claims.

In May, Vietnam said Chinese marine surveillance vessels cut the exploration cables of an oil survey ship inside Hanoi's exclusive economic zone.

And Philippine President Benigno Aquino has accused China of inciting at least seven recent incidents, including one in which a Chinese vessel allegedly opened fire on Filipino fishermen.

In response, China has insisted it wants to resolve disputes peacefully but remains firm in its claims to most of the South China Sea, even waters within the Philippines' economic exclusion zone.

Fu also defended the Asian giant's military build-up, in a bid to dismiss fears following recent reports that China was building its first aircraft carrier amid tensions in the South China Sea.

"The Chinese defence development is going along with the progress of the country," she said.

"It is relatively weaker, it is not one of the strongest yet. The alarm on Chinese defence development is a bit blown out (of proportion)."

Chinese top military officials reportedly confirmed in June that Beijing is building a huge aircraft carrier, a remodelled Soviet-era vessel, in its first acknowledgment of the ship's existence.





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