This has become an ever more contentious issue between the two countries, with the USA sending warships and aircraft carriers to the region.
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Envoys from the two sides also didn’t agree on what to do about China’s aluminum producers, among the bloated industries Washington and other trading partners complain are dumping exports too cheaply, hurting foreign competitors and threatening jobs.
“And for those differences that can not be resolved for the time being, we need to appropriately and effectively manage them so as to always keep the growth of this relationship on a sound and steady track”, Xi was quoted as saying.
Beijing will submit next week its “negative list” offer of sectors that will remain off-limits to U.S. investment in a bilateral investment treaty (BIT), Vice Premier Wang Yang said on Monday.
“What we’ve seen over and over in the last years, China is unwilling to risk activities that threaten deadly force”, Poling told diplomats and military officials at the main army base in Manila.
“It’s not scary to have disagreements”, Mr Xi said.
If secretary of state John Kerry’s brief news conference was anything to go by, the US-China strategic dialogue ended on Tuesday without much to show as a breakthrough in a bilateral relationship fraught with challenges.
The U.S. and China are the two largest economies in the world – and interdependent in a host of ways.
China has said it will not respect the court’s decision and there are fears in Manila that China may retaliate by declaring an air defence identification zone in the disputed waters or by reclaiming disputed Scarborough Shoal. But it has urged all sides to exercise restraint and resolve the issue through talks – and reserves the right to sail through what it says are global waters, including in areas claimed by China. But China and the US apparently remain at an impasse over China’s territorial claims in the South China Sea.
At least $5 trillion of trade passes through this maritime zone every year and maritime limitation means a disaster to the whole world if China, or any other nation for that matter, controls this area.
Malaysian defense minister Hishammuddin Hussein spelt out the costs to smaller regional countries if great power rivalries escalate, however. China has also reclaimed 3,200 acres of land and added military infrastructure on seven features in the Spratly Islands.
The governments reaffirmed their commitment to freedom of navigation and overflight, Kerry said.
Secretary Kerry, meanwhile, expressed continuing concerns about human rights issues in China, including a new law on NGOs that requires them to be registered with and scrutinized by China’s police.
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Kerry described cooperation on climate change as “one of the strongest pillars of our relationship” with China. Previously, Kerry and other senior U.S. officials had focused on sending a positive message in contrasting the North Korean and Iranian nuclear issues – suggesting Pyongyang could improve its relationship with Washington like Tehran did by abandoning its nuclear program. He called the dialogue an opportunity to “seek creative ways to narrow them, or eliminate them altogether”.
