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Japan's Defence Minister Tomomi Inada meets with U.S. Secretary of Defense James Mattis on the sidelines of the 16th IISS Shangri-La Dialogue in Singapore June 3, 2017. REUTERS/Edgar Su

(reuters_tickers)

By Idrees Ali and Lee Chyen Yee

SINGAPORE (Reuters) - The United States is encouraged by China's efforts to restrain North Korea but Washington will not accept Beijing's militarisation of islands in the South China Sea, U.S. Defence Secretary Jim Mattis said on Saturday.

The comments by Mattis, during the annual Shangri-La Dialogue, show how U.S. President Donald Trump's administration is looking to balance working with China to restrain North Korea's advancing missile and nuclear programmes while dealing with Beijing's activities in the South China Sea.

U.S. allies have been worried by Trump's actively courting Chinese President Xi Jinping to restrain North Korea, fearing Washington might allow China a more free rein elsewhere in the region.

Some allies have also expressed concern that Washington's withdrawal from the Trans-Pacific trade partnership and the Paris global climate accord signals the United States is diluting its global leadership role.

Speaking at the dialogue, Asia's premier security forum, Mattis said the United States remained fully engaged with its partners.

"Like it or not, we are a part of the world," he said. "What a crummy world if we all retreat inside our borders."

Nevertheless, reversing or slowing North Korea's nuclear and missile programmes has become a security priority for Washington, given Pyongyang's vow to develop a nuclear-tipped missile capable of hitting the U.S. mainland.

The Trump administration has been pressing China aggressively to rein in its reclusive neighbour, warning all options are on the table if North Korea persists with its weapons programmes.

"The Trump administration is encouraged by China's renewed commitment to work with the international community towards denuclearisation," Mattis said.

"Ultimately, we believe China will come to recognise North Korea as a strategic liability, not an asset."

However, Mattis said seeking China's cooperation on North Korea did not mean Washington would not challenge Beijing's activities in the South China Sea.

The U.N. Security Council on Friday expanded targeted sanctions against North Korea after its repeated missile tests, adopting the first such resolution agreed by the United States and China since Trump took office.

In another sign of increased pressure on North Korea, Japan's navy and air force began a three-day military exercise with two U.S. aircraft carriers in the Sea of Japan on Thursday.

Japanese Defence Minister Tomomi Inada, speaking at the Singapore forum, said Tokyo backed the United States using any option to deal with North Korea, including military strikes, and was seeking a deeper alliance with Washington.

But she also said she was concerned about the situation in the South China Sea and in the East China Sea.

China's claims in the South China Sea, through which about $5 trillion in ship-borne trade passes each year, are contested by Brunei, Malaysia, the Philippines, Taiwan and Vietnam. China and Japan both claim islands in the East China Sea.

LOW-KEY

China, which sent only a low-key delegation to the forum,

said its ties with the United States were vital for the region.

"I believe that if China and the United States can ensure no conflict, as well as maintain mutual respect, cooperation and trust, it will contribute greatly to security in the Asia Pacific and the world," Lt Gen He Lei, the head of Beijing's delegation, told reporters.

Allies around the world have been concerned about the commitment of the United States since Trump took office on Jan. 20 because of his "America First" rhetoric and expectations that he would concentrate on a domestic agenda.

Mattis sought to ease concerns for allies in the Asia-Pacific, saying the region was a priority and the primary effort was alliance building. He added, however, that countries must "contribute sufficiently to their own security."

In a sign of the U.S. commitment to the region, Mattis said that soon about 60 percent of overseas tactical aviation assets would be assigned to the region and he would work with the U.S. Congress on an Asia-Pacific stability initiative.

Mattis said the United States welcomed China's economic development, but he anticipated "friction" between the two countries.

"While competition between the U.S. and China, the world's two largest economies, is bound to occur, conflict is not inevitable," Mattis said.

While eager to work with China in dealing with North Korea, Mattis said the United States did not accept China placing weapons and other military assets on man-made islands in the South China Sea.

"We oppose countries militarising artificial islands and enforcing excessive maritime claims," Mattis said. "We cannot and will not accept unilateral, coercive changes to the status quo."

Without giving details, Mattis also said the United States would take further steps to protect the U.S. homeland.

Earlier this week, the United States carried out a successful, first-ever missile defence test involving a simulated attack by an intercontinental ballistic missile, in a major milestone for a programme meant to defend against a mounting North Korean threat.

(Additional reporting by Masayuki Kitano and Greg Torode; Editing by Raju Gopalakrishnan and Lincoln Feast)

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