http://www.businessweek.com/news/2010-09-23/clinton-urges-china-japan-dialogue-stays-neutral-in-dispute.html

Clinton Urges China-Japan ‘Dialogue,’ Stays Neutral in Dispute

Sept. 24 (Bloomberg) -- Secretary of State Hillary Clinton urged Japan to resolve issues with China over a detained Chinese fishing captain through dialogue, as U.S. officials declined to step into a broader territorial dispute.

The U.S. encourages “both sides to work aggressively to resolve” their differences “as quickly as possible,” State Department spokesman Philip J. Crowley told reporters in New York yesterday, where Clinton met with Japanese Foreign Minister Seiji Maehara on the sidelines of the United Nations General Assembly’s annual meeting.

Japan detained the captain on Sept. 7 after his boat collided with two Japanese Coast Guard vessels near an uninhabited island group -- known as Diaoyu in Chinese and Senkaku in Japanese -- that is claimed by both countries. The U.S., which is committed to the defense of Japan under a 1960 treaty, is neutral on the territorial issue.

“We don’t take a position on the sovereignty of the Senkakus,” Crowley said.

President Barack Obama didn’t raise the issue when he met yesterday in New York with Chinese Premier Wen Jiabao, said Jeff Bader, Obama’s director of Asian affairs.

The diplomatic dispute has caught the attention of the U.S. military, which relies on Japan to provide bases and other support for American forces. Japan is one of two security treaty allies for the U.S. in the region, along with South Korea.

Watching Tension ‘Carefully’

“We’re watching that tension very, very carefully,” said Navy Admiral Mike Mullen, chairman of the Joint Chiefs of Staff and President Barack Obama’s top military adviser. “Obviously we’re very, very strongly in support of our ally in that region, Japan,” he told reporters at the Pentagon yesterday.

Defense Secretary Robert Gates, conducting a joint briefing with Mullen, added, “We would fulfill our alliance responsibilities.” The two leaders, who spoke in response to questions, didn’t comment further.

Wen this week called on Japan to “immediately and unconditionally” to release the captain, saying failure to do so would result in “further measures” being taken. He didn’t elaborate. China yesterday denied reports it banned the export of rare earths that are used in hybrid cars, laptop computers and iPhones to Japan.

The dispute prompted protests at Japan’s embassy in Beijing on Sept. 18, as demonstrators demanded the fishing captain’s release.

Historical Enmity

Anger over Japan’s occupation of large parts of China during the 1937-1945 Sino-Japanese War, in which millions of Chinese died, can erupt when political and territorial disagreements arise.

Japan returned the boat and crew to China, while handing the captain over to prosecutors who would decide whether to charge him.

Chinese Foreign Ministry spokeswoman Jiang Yu said on Sept. 22 that Japan must “immediately correct its wrongdoing” by releasing the captain to avoid further damage to relations between the two countries.

Obama and Chinese Premier Wen Jiabao, in remarks to reporters in New York yesterday after a separate meeting, pledged closer cooperation on economic issues. Obama called China an “outstanding partner” and said its work is “absolutely critical” in resolving the financial crisis.

--With assistance from Dexter Roberts, Michael Forsythe and Huang Zhe in Beijing, Makiko Kitamura in Tokyo, and Kate Andersen Brower and Julianna Goldman in New York. Editors: Bob Drummond, John Brinsley.

To contact the reporters on this story: Flavia Krause-Jackson in Washington at fjackson@bloomberg.net; Viola Gienger in Washington at vgienger@bloomberg.net.

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net