* Kerry in Brunei for summit, met China's Li on sidelines
* China has been reluctant to address sea dispute
* U.S. wants "rebalancing" towards Asia
* Obama cancelled trip to summit due to U.S. shutdown
By Lesley Wroughton and Manuel Mogato
BANDAR SERI BEGAWAN, Brunei, Oct 9 (Reuters) - U.S. Secretary of State John Kerry will press Southeast Asian leaders and China to discuss the South China Sea dispute at an Asian summit, a senior U.S. official said on Wednesday, despite Beijing's reluctance to address the issue in public forums.
Kerry arrived in Brunei on Wednesday for an annual East Asia Summit (EAS) and talks with leaders of Southeast Asian nations and, separately, met Chinese Premier Li Keqiang on the sidelines of the summit.
A U.S. official said Kerry would urge Association of Southeast Asian Nations (ASEAN) member states to continue to work "for enhanced coherence and unity" to strengthen their position with China in negotiating a code of conduct for the South China Sea.
Obama last week cancelled his scheduled trip to the summit because of the U.S. government shutdown, raising concern that Washington would lose some of its influence in countering China's assertive claims over the South China Sea and in maintaining its strategic "rebalancing" toward Asia.
"That rebalance is a commitment, it is there to stay and will continue into the future," Kerry told ASEAN leaders in opening remarks shortly after arriving. He began his speech by apologising that Obama was not able to attend but emphasised the U.S. commitment to the region.
"I assure you that these events in Washington are a moment in politics and not more than that," Kerry said. "The partnership that we share with ASEAN remains a top priority for the Obama administration."
China has resisted discussing the territorial issue with the 10-member ASEAN, preferring to settle disputes in the South China Sea through negotiations with individual claimants. It has also frowned at what it sees as U.S. meddling in a regional issue.
"The Chinese consistently indicate their view that 'difficult issues' that might fall outside the comfort zone of any member need not be discussed," the U.S. official said.
"That is not a view that is held by the U.S., or, I believe, many if not most of the EAS member states, but we will find out."
The conflicting claims over the South China Sea pit an increasingly assertive Beijing against smaller Asian nations that look to support from the United States.
The row is one of the region's biggest flashpoints amid China's military build-up and the U.S. strategic "pivot" back to Asia signalled by the Obama administration in 2011.
China claims almost the entire oil- and gas-rich South China Sea, overlapping with claims from Taiwan, Malaysia, Brunei, the Philippines and Vietnam.
The United States says it is neutral but has put pressure on China and other claimants to end the dispute through talks.
Kerry would emphasise the role of the United States as "a longstanding champion of security and stability in the region, and as an advocate of the rule of law, peaceful solution of disputes, and freedom of navigation, and the principle of unimpeded lawful commerce", the senior official said.
Nevertheless, Washington will be hamstrung at the summit because of Obama's absence.
"I'm sure the Chinese don't mind that I'm not there right now," the U.S. president said at a news conference in Washington on Tuesday. "There are areas where we have differences and they can present their point of view and not get as much push back as if I were there."
As Li and Kerry met for talks on the sidelines of the summit some tensions were evident.
"I'm sure that we are all committed to living with each other in harmony and discussing jointly those issues of common interest," Li said. "While China is the largest developing country in the world, while the United States is the largest developed one in the world."
Li's remark later that the U.S. and Chinese economies were at "different stages of development" prompted Kerry to respond: "I know you know we think you're a little more developed than you may want to say you are, but nevertheless we have the same responsibilities."
In an apparent softening of its stance, China agreed this year to hold "consultations" with ASEAN on a code of conduct (CoC) for disputes in the South China Sea.
But some diplomats and analysts say China may be giving the appearance of dialogue without committing to anything substantive, aiming to drag the talks out for years while it consolidates its expansive maritime claims.
"It's a face-saving mechanism to show the world, to show ASEAN, that China is committed to come up with a CoC but the consultations are designed to delay formal negotiations on a binding code," said one diplomat from an ASEAN nation.
However, Li said the code of conduct talks last month were a success and China would be willing to build on that, although he did not give any specifics.
"We've always agreed that South China Sea disputes should be dealt with in a direct way, and to seek a resolution through negotiations and talks," Li said in a speech at the summit.
He, however, maintained China was "unshakable in its resolve to uphold national sovereignty and territorial integrity".
The dispute has soured relations between China and U.S. ally the Philippines, in particular. The two countries have been involved in naval standoffs and China has effectively occupied a shoal 124 nautical miles off the Philippine coast.
Manila is taking part in the code of conduct talks but has angered China by launching an arbitration case with the United Nations on the validity of China's claims.
Philippine President Benigno Aquino stressed the importance of the rule of law to the region's economic well-being in a speech on Wednesday, calling for a return to the naval status quo that existed at the time a 2002 non-binding agreement on maritime conduct was signed by China and ASEAN.
"Our development as a region cannot be realized in an international environment where the rule of law does not exist," Aquino said.