Tillerson says China should be barred from South China Sea islands

In comments expected to enrage Beijing, Rex Tillerson told his confirmation hearing on Wednesday before the U.S. Senate Foreign Relations Committee that China's building of islands and putting military assets on those islands was "akin to Russia’s taking Crimea” from Ukraine.

Asked whether he supported a more aggressive posture toward China, he said: "We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed.”

The former Exxon Mobil Corp (XOM.N) chairman and chief executive did not elaborate on what might be done to deny China access to the islands it has built up from South China Sea reefs, equipped with military-length airstrips and fortified with weapons.

Trump's transition team did not immediately respond to a request for specifics on how China might be blocked from the artificial islands.

China claims most of the energy-rich waters through which about $5 trillion in ship-borne trade passes every year. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

When asked repeatedly about Tillerson's comments on blocking access to islands, China's foreign ministry spokesman Lu Kang said he couldn't make any guesses as to what Tillerson was referring to and would not answer hypothetical questions.

China's right to carry out 'normal activities' in its sovereign territory in the South China Sea is 'indisputable', Lu said, speaking at a daily briefing on Thursday. He did not elaborate.

Tillerson also said Washington needed to reaffirm its commitment to Taiwan, which Beijing regards as a renegade province, but stopped short of Trump's questioning of Washington's long-standing policy on the issue.

The United States switched diplomatic recognition from Taiwan to China in 1979, acknowledging that China takes the position that there is "one China" and Taiwan is part of it. But the United States is also Taiwan's biggest ally and arms supplier.

"I don’t know of any plans to alter the 'one China' position," Tillerson said.

Tillerson said he considered China’s South China Sea activity "extremely worrisome" and that it would be a threat to the "entire global economy" if Beijing were able to dictate access to the waterway.

He blamed the current situation on what he termed an inadequate U.S. response. "The failure of a response has allowed them just to keep pushing the envelope on this," Tillerson said.

"The way we’ve got to deal with this is we’ve got to show back up in the region with our traditional allies in Southeast Asia," he said.

Democratic President Barack Obama’s administration conducted periodic air and naval patrols to assert the right of free navigation in the South China Sea. These have angered Beijing, but seeking to blockade China's man-made islands would be a major step further and a step that Washington has never raised as an option.

Under his strategic "pivot" to Asia, Obama has increased the U.S. military presence in the region, and Trump has vowed a major naval buildup.

Tillerson's words also went beyond Trump's own tough rhetoric on China.

Regional military sources said while the U.S. navy had extensive capabilities in Asia to stage blocking operations with ships, submarines and planes, any such move against China's growing naval fleets would risk dangerous escalations.

Obama has sought to forge a united front in Southeast Asia against China’s pursuit of its territorial claims, but some allies and partners who are rival claimants have been reluctant to challenge Beijing.

Tillerson called China's South China Sea island-building and declaration of an air defense zone in the East China Sea it contests with Japan "illegal actions."

"They’re taking territory or control, or declaring control of territories that are not rightfully China’s," he said.

The response was muted from the Philippines, a traditional U.S. ally that last year won an international arbitration case that included a challenge to China's island-building within its 200 nautical mile exclusive economic zone.

"These are not policies yet and let us wait if they will implement what was said in the hearing," Defense Secretary Delfin Lorenzana told reporters on Thursday.

"Let's wait until Trump is in office."

His comments reflect the sharp change in Manila's approach to China under new President Rodrigo Duterte, who wants good diplomatic and business ties with Beijing and says challenging it is provocative and pointless. He makes no secret of his lack of trust in the Obama administration and has chided it for what he considers inaction in the South China Sea.

Tillerson also said the United States could not continue to accept "empty promises" China had made about putting pressure on North Korea over that country's nuclear and missile programs.

He said his approach to dealing with North Korea - which recently declared it is close to carrying out its first test of an intercontinental ballistic missile - would be "a long-term plan" based on sanctions and their proper implementation.

Asked if Washington should consider imposing "secondary sanctions" on Chinese entities found to be violating existing sanctions on North Korea, Tillerson said: "If China is not going to comply with those U.N. sanctions, then it's appropriate ... for the United States to consider actions to compel them to comply."

He accused China of failing to live up to global agreements on trade and intellectual property, echoing past remarks by Trump, who has threatened to impose high, retaliatory tariffs on China. But Tillerson also stressed the "deeply intertwined" nature of the world's two biggest economies.

"We should not let disagreements over other issues exclude areas for productive partnership," he said.

(Additional reporting by Manuel Mogato in Manila and Michael Martina in Beijing and Greg Torode in Hong Kong; Reporting by David Brunnstrom and Matt Spetalnick; Editing by Jonathan Oatis and Bill Tarrant)