INTERVIEW-UPDATE 1-ASEAN chief says China plan on disputed seas escalates tension

(Adds quotes, background)

JAKARTA, Nov 30 (Reuters) - China's plan to board and search

ships that illegally enter what Beijing considers its territory

in the disputed South China Sea is a very serious turn of

events, the head of the Association of Southeast Asian Nations

(ASEAN) said on Friday.

"My reaction is (this is) certainly an escalation of the

tension that has already been building. And it is a very serious

turn of events," ASEAN Secretary-General Surin Pitsuwan told

Reuters in a telephone interview.

"It is extremely important to exercise restraint and to try

to approach this development with a level head and be open to

listen to concerns of all parties, all sides," he said.

The South China Sea is Asia's biggest potential military

trouble spot with several Asian countries claiming sovereignty

over waters believed to be rich in oil and gas.

China claims virtually the entire sea. The Philippines,

Taiwan, Vietnam, Brunei and Malaysia claim various parts.

The shortest route between the Pacific and Indian Oceans,

the South China Sea has some of the world's busiest shipping

lanes. More than half the globe's oil tanker traffic passes

through it.

New rules, which come into effect on Jan. 1, will allow

police in the southern Chinese province of Hainan to board and

seize control of foreign ships which "illegally enter" Chinese

waters and order them to change course or stop sailing, the

official China Daily reported.

"It certainly has increased a level of concern and a level

of great anxiety among all parties, particularly parties that

would need the access, the passage and the freedom to go

through," said Surin, speaking from Thailand.

"The problem is that you can stake the claim, you can

initiate measures and policies but there is that potential of

misunderstanding, miscalculation that could lead to major

tension and major incidents," he said.

The move, if mishandled, could undermine confidence in East

Asia as a locomotive of global economic growth, he said, adding

that whether or not it was legal depended on the positions of

the parties involved.

(Reporting by Matthew Bigg; Editing by Raju Gopalakrishnan)

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