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US: Sinking of South Korean Ship Raises 'Very Serious Set of Circumstances'

A top U.S. State Department official said Wednesday that the pending release of a report that is expected to blame North Korea for the sinking of a South Korean warship in March raises a "very serious set of circumstances" for the region. The South Korean report is expected to be issued on Thursday only hours before U.S. Secretary of State Hillary Clinton leaves Washington on an Asia trip.

U.S. officials took part in the South Korean investigation of the sinking. They say they are aware of and that they support the findings of the inquiry.

They are limiting their public comments until the official release of the report on Thursday morning South Korea time. But they are making clear that the document will have serious implications.

Previewing Secretary of State Clinton's Asia trip, which begins on Thursday, Assistant Secretary of State for East Asian and Pacific Affairs Kurt Campbell called the sinking of the South Korean vessel, the Cheonan, tragic. He said the United States supports the Seoul government "unequivocally and strongly" in finding a way forward in the aftermath of the incident.

But Campbell was measured in his remarks about North Korea, saying Pyongyang should cease provocations and fulfill commitments it made five years ago to scrap its nuclear program.

"We are concerned by a number of steps that North Korea has taken that we consider to be provocative - nuclear tests, missile launches and other regional activities," said Kurt Campbell. "The United States still believes that North Korea must comply by its commitments that it made in 2005 to relinquish its nuclear pursuits. We are, however, facing a very serious set of circumstances in the coming days. And as I indicated, we will have more to say specifically about the tragic sinking of the Cheonan in the coming days."

Campbell said the sinking incident will be on the agenda on all three of Secretary Clinton's stops in Asia - Japan, China and South Korea. The political upheaval in Thailand and the drive for new sanctions on Iran because of its nuclear program are also expected to be discussed.

In China, after visiting the U.S. pavilion at the World Exposition in Shanghai, Clinton will lead an inter-agency delegation of more than 200 civilian and military officials to Beijing for the second meeting of the U.S.-China Strategic and Economic Dialogue.

The U.S. economic team will include Treasury Secretary Timothy Geithner and Federal Reserve Chairman Ben Bernanke. Their talks will focus on ways to sustain the global economic recovery and reduce the huge imbalance in bilateral trade favoring China.

The Obama administration has delayed a decision on whether to declare China a currency manipulator, as has been called for by members of Congress who say the Chinese currency, the yuan or renmimbi, is artificially undervalued to promote exports.

But the Treasury Department's senior coordinator for China affairs, David Loevinger, says U.S. concerns on the issue remain.

"I don't think there's been any change in Secretary Geithner's approach on the renmimbi," said David Loevinger. "We've been very clear with the Chinese that this remains a top priority. And I think what's happening in Europe reinforces the imperative that China move quickly to promote homegrown, consumption-led growth in its own economy."

Loevinger acknowledged anxiety by China, a major holder of U.S. government debt, about the size of the U.S. budget deficit.

He said the Obama administration is committed to bringing down the deficit and government debt to a "sustainable level," but that the United States will not do so until economic recovery is fully established. Loevinger said that approach is in the best interests of China and the United States.

Secretary Clinton goes first to Tokyo for talks on regional security issues, including the Japanese government's call for changes in a 2006 agreement on relocating some U.S. forces from Okinawa.

She stops in Seoul at the end of the mission next Wednesday for meetings likely to be dominated by the naval incident and efforts to get North Korea back to Chinese-sponsored nuclear negotiations.