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US official: China constructive on disputed waters

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ABOARD AIR FORCE ONE (AP): China signaled a gradual evolution toward resolving quarrels with its Asian neighbors over disputed waters of the South China Sea, a senior US administration official has said describing the development as an encouraging step forward in easing tensions over the busiest trade route in the world.

Chinese Premier Wen Jiabao offered a measured response after 16 of the 18 leaders attending a major Asian summit raised the issue of maritime security, primarily on the South China Sea. The topic has been a thorny issue, with China laying claim to all of the sea, while several Southeast Asian nations claim parts of it.

The US official said Wen seemed reluctant to discuss the dispute during a retreat by the Asian leaders, but responded after President Barack Obama raised it.

The official spoke to reporters aboard Air Force One on the condition of anonymity to discuss a sensitive diplomatic subject. Obama and Wen talked Saturday in a surprise meeting on the sidelines of a major Asian summit, focusing on the economic matters that have prompted disputes between the two major world powers.

The session was not a formally planned moment of diplomacy but rather a late add-on to let the two men continue their conversation from a group dinner the night before.

The South China Sea disputes were discussed only briefly in that meeting, officials said. Instead, Obama and Wen focused on topics such as China currency.

CCTV, China's state broadcaster, said Wen told Obama that China has made strides in reforming its currency exchange and will continue to do so.

Wen also said the world's grim economy made it practical and necessary for China and the US to strengthen their economic and trade relationship, CCTV reported.

"We have a very complicated and quite substantial relationship with China across the board," White House National Security Adviser Tom Donilon told reporters after the one-on-one session.

"We do have economic issues, they are around the proper contribution that the Chinese make to global growth and that goes to currency and other policies," he added.

Donilon said Obama stressed the importance of China adjusting the value of its currency, which the United States contends is deeply undervalued. He said Obama and Wen also briefly discussed territorial disputes in the South China Sea toward the end of their meeting.

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