Asian leaders are gathering in Brunei against a backdrop of divisive territorial disputes and flagging free trade efforts, with China taking expected to take on a prominent role in the absence of US President Barack Obama.

Leaders of the Association of Southeast Asian Nations (ASEAN) were to first meet among themselves on Wednesday before the leaders of eight other countries - including China, Japan, South Korea and India - joined them for two days of closed-door talks.

They will attempt to overcome maritime tensions and inject fresh momentum into regional free-trade initiatives.

Obama was forced to cancel a four-nation swing through Southeast Asia, including attendance at the ASEAN meeting and an earlier summit in Bali, Indonesia, to grapple with a budget deadlock that sparked a partial shutdown of the US government. Secretary of State John Kerry is taking his place.

That has given Chinese Premier Li Keqiang a chance to take the spotlight.

Although its annual meeting is often derided for being more talk than action, ASEAN and its 10 nations are a prized catch, both politically and economically, in the rivalry between a rising China and a United States that has been trying to reassert its dominance in the region of more than half a billion people.

Trade agreement

ASEAN wants to transform itself by the end of 2015 into an EU-like community in two years with a freer flow of goods, services and investments, though there are doubts as to whether that timeframe is feasible.

China plans to establish an Asian investment bank to help finance infrastructure projects in the region, Li said in an interview published by the Borneo Bulletin, a newspaper in Brunei.

While trade is high in the agenda at the summit, long-seething rifts over contested territories in the busy South China Sea are once again sparking friction.

The bloc has been struggling to manage the disputes, which many fear could ignite Asia's next major armed conflict.

China and Taiwan claim the resource-rich waters and its chains of islands, islets and reefs virtually in its entirety while ASEAN members Brunei, Malaysia, the Philippines and Vietnam lay claim to some parts.

American officials say the peaceful resolution of the conflict and freedom of navigation in the contested waters are in the US national interest, but China has warned them to stay out of what should purely be an Asian dispute.

Vietnam and the Philippines have had recent skirmishes with Chinese maritime ships in the sea, igniting fresh tensions.

Chinese and Philippine diplomats squabbled on Tuesday over the wording of a paragraph on the territorial rifts in a joint statement to be issued by Chinese and ASEAN leaders after they meet on Wednesday, two Filipino diplomats told The Associated Press news agency.

When asked by Southeast Asian journalists, who sent in their questions in writing, about fears that China might seek hegemony in the region with its growing military might, Li portrayed his country as a gentle giant which has had no track record of expansionism in Asia unlike Western powers.

But while China is firmly committed to a peaceful rise, Li said it "is unshakable in its resolve to uphold national sovereignty and territorial integrity".

By Agencies

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