ISIS Fight: China, US See Rare Moment Of Agreement On Foreign Policy Around Islamic State

(Reuters) - When the United States and China discuss cooperating against Islamic State later this month, the most prominent outcome is likely to be less criticism of each other's anti-terrorism policies.

Both countries have flagged that President Barack Obama and President Xi Jinping will discuss the issue when they meet on the sidelines of the Asia Pacific Economic Cooperation (APEC) summit in Beijing.

Cooperation like sharing intelligence will be difficult. And China will not commit troops or weapons.

But simply seeing eye-to-eye on the problem of Islamic State can pay political dividends, experts and diplomats say, as the United States launches air strikes against the ultra-radicals in Iraq and Syria and China faces condemnation of its hardline tactics in its western Xinjiang region.

"You're mostly likely to see China sit back and not criticize the United States. That is what cooperation looks like," said Philip Potter, an assistant professor at the University of Virginia who studies global terrorism.

In return, Beijing would value more recognition from Washington of what Chinese authorities say is the threat of militant Islamic separatists in its far western province of Xinjiang.

China charges that a group called the East Turkistan Islamic Movement (ETIM) is seeking to set up a separate state in Xinjiang, home to the Muslim Uighur ethnic minority.

Rights groups and Uighur exiles dispute the extent of the ETIM threat, and argue that economic marginalisation of Uighurs is one of the main causes of violence there.

Washington deemed ETIM a terrorist organization in the wake of the September 11, 2001 attacks, but a few officials in the U.S. government have privately questioned the extent of the organization's influence in Xinjiang.

However, some experts note that the United States' rhetoric on the group may be swinging back in favor of Beijing.

"The United States stands by its decision to designate ETIM a terrorist organization by executive order in 2002. Furthermore, we support the U.N. designation of ETIM," Daniel Russel, Assistant Secretary of State for East Asian and Pacific Affairs, told Reuters.

QUID PRO QUO?

Russel, however, noted that Chinese government measures in Xinjiang "stoke discontent" and dismissed the idea that there was a shift to lend Beijing's policies more credence in return for less criticism from China on U.S. operations in Syria in Iraq.

"I reject the implicit premise that there's a quid pro quo for China's cooperation against ISIL. We believe China should continue and expand its contributions to the international efforts against ISIL because it is in China's interest to do so," Russel said.

China has significant energy interests in Iraq and its state media has reported that militants from Xinjiang have sought training from Islamic State fighters for attacks at home.

It has offered humanitarian and reconstruction assistance in Iraq, pledges not lost on the United States.

Still, China has often pressed Washington to abandon "double standards" when it comes to combating extremists.

"The fight against ETIM is a component of the global fight against terrorism. We hope for the support of the international community," Foreign Ministry spokesman Hong Lei told reporters on Thursday.

Beyond that, China has been vague in public about what it hopes for in cooperation with the United States.

Asked if it would work with the United States to limit financial transactions by militant groups, Hong said China wanted to treat the "cause and symptoms of terrorism".

"EASY DIPLOMATIC WIN"

U.S. Secretary of State John Kerry hosted two days of talks in Boston with China's top diplomat, State Councillor Yang Jiechi, in October, during which the two agreed on the need to cooperate against Islamic State.

"Agreeing to fight terrorism is an easy diplomatic win for both countries," one Beijing-based Western envoy told Reuters on condition of anonymity.

U.S. officials say Islamic State is generating tens of millions of dollars a month through a combination of oil sales, ransom, extortion and other criminal activities and the Obama administration has threatened to slap sanctions on anyone buying oil from the militants.

But the extent to which the two countries' leaders are likely to discuss that in public is limited. The prospect of intelligence sharing between Washington and Beijing is uncertain at best.

"The strong impression that I'm getting is that the intelligence communities are getting farther apart and more adversarial," said Potter at the University of Virginia.

Experts said that given the often acrimonious relationship between the United States and China, diplomatic support from Beijing would be a positive development.

"We have to be realistic about what China can and will be willing to do," Martin Indyk, vice president and director of the foreign policy program at the Brookings Institution told a forum in Beijing in late October.

"While you (China) have an interest in counter-terrorism cooperation you don't see the threat to China in the same way as we in the United States see the threat to us. So you are limited in what you are prepared to do there," Indyk said.

(Additional reporting by Ben Blanchard in Beijing; Editing by Raju Gopalakrishnan)