WRAPUP 5-China rebuffs U.S., Asia pressure in sea dispute
* China pushes back on sea dispute after U.S. pressure
* Underlines view against multilateral talks on dispute
* U.S. says China's heavy-handed approach will backfire
* Caps major diplomatic push by Obama to court Asia region
NUSA DUA, Indonesia, Nov 19 (Reuters) - China pushed back on Saturday against a week of U.S. pressure to resolve a rancorous dispute over territorial claims in the South China Sea, a crucial, mineral-rich commercial shipping lane at the heart of growing tensions among Asian leaders.
Chinese Premier Wen Jiabao chastised President Barack Obama for raising the issue during an Asia-Pacific leaders summit, hours after Obama told Wen the United States wants the sea lanes kept open and peaceful, capping two weeks of Sino-U.S. tensions.
Vietnam, the Philippines, Taiwan, Malaysia and Brunei all have claims to parts of the sea lanes, while China claims large parts of the region, which might hold rich deposits of oil and gas.
Obama ended a nine-day trip with a meeting with Wen where, according to U.S. officials, he raised U.S. concerns over festering economic issues such as China's currency policy, after huddling with Asian leaders in a concerted effort to court the world's fastest-growing region.
U.S. lawmakers have long argued Beijing keeps the value of the yuan down to help drive the country's exports engine, a stance they say costs American jobs.
Wen defended Beijing's currency stance, stressing that from late September to early November, offshore foreign exchange markets showed "expectations of a depreciation in the renminbi exchange rate" and that China will also strengthen the renminbi's trading flexibility in either direction, without elaborating.
But it was Obama's comments on the South China Sea, a possible flashpoint in Asia, that drew Beijing's ire.
Wen said the South China Sea issue should be resolved directly among related sovereign countries "through friendly consultation and negotiation", state-owned news agency Xinhua reported, a comment that suggests U.S. exclusion from the dispute.
He added that the East Asia Summit on the Indonesian island of Bali, where Obama met with 17 Asia-Pacific leaders in three days of talks, was not "a proper occasion" to discuss the issue.
Still, a briefing by a U.S. official said 16 leaders present at the summit addressed maritime security. Indeed, the bulk of the discussions were a "very robust" conversation on maritime security and the South China Sea, the official said.
"The Chinese will come away from the meeting believing that a heavy-handed approach on the south china sea will backfire badly," said the official.
But Xinhua, in an English language commentary, warned that "any attempt by outside forces to internationalise the issue will only make it more complicated and undermine peace and stability in the region", in a veiled reference to the United States.
Tensions flared earlier this year with often tense maritime stand-offs in the sea that carries some $5 trillion a year in world trade. U.S. Secretary of State Hillary Clinton earlier this week warned claimants against using intimidation to back their claims, an indirect reference to China.
An Australian think tank warned in June that risk-taking behaviour of the Chinese military, the resource needs of the fast-growing economy and its greater assertiveness raised tensions and could spark a conflict that could draw in the United States and other powers.
China wants to hold bilateral talks with other countries that claim parts of the South China Sea as their territory, but the Southeast Asian claimants, the United States and Japan are pushing for a multilateral approach.
The United States had been "quite direct with the Chinese about our strategy", said Tom Donilon, Obama's top national security adviser.
Beijing understood that Washington was serious about sustaining a more active presence in the region to help its stability and peace, he said.
"Our partners and allies look to us for that reassurance. They want to know that the United States is going to play the role it has played with respect to security and reassurance and balancing and stability here," he said.
Still, he said Washington was pursuing deep engagement with China to manage a range of U.S.-Chinese issues.
"We have a very complicated and quite substantial relationship with China across the board," he said, adding that while the United States does have "economic issues" with Beijing, "our relationship with China has in the main been productive and constructive".
The summit capped two weeks of a hard diplomatic push by Obama to reassert America's footprint in the Asia Pacific, which will fuel China's fear of being encircled, or contained by the United States and its allies.
However, Obama on Thursday acknowledged China's unease, pledging to seek greater cooperation with Beijing. And Clinton told America's ABC television: "It's not about countering anybody else's power. It's about asserting our own position as a Pacific power."
On Thursday, Obama said in Australia that the U.S. military would expand its Asia-Pacific role, declaring America was "here to stay" as a Pacific power.
Days earlier, as host of the Asia Pacific Economic Co-Operation forum in Hawaii, Obama had voiced growing frustration at China's trade practices. He declared "enough is enough" as he pushed for a new Asia-Pacific trade deal with some of Beijing's neighbours.
However, China has adopted a largely restrained response to the expansive moves by Washington.
"The U.S. has been an important player in Asia ever since the Second World War. We are looking forward to cooperating with them, with the U.S., in the region," China's Assistant Foreign Minister Liu Zhenmin told reporters in Bali.
Obama also announced on Friday that he would send Clinton to Myanmar next month, which has drawn closer to China in reaction to Western sanctions.
It will be the first such trip to the isolated country in half a century and will add to Beijing's fears of encirclement.
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