New Dynamics in China-Philippines Relations

Dr. Puyam Rakesh Singh *

On January 22, 2013, the Philippines instituted arbitral proceeding against China under Annex VII to the United Nations Convention on the Law of the Sea (UNCLOS) concerning the role of historical rights and the source of maritime entitlements in the South China Sea. On July 12, 2016, the ruling of the Permanent Court of Arbitration (PCA) denounced China's historical claims over the South China Sea including the Scarborough Shoal which falls within the Philippines' exclusive economic zone (EEZ). It has undermined China's 'international standing and exposed its duplicity in its commitment to a rule-based international order.'[1] Notwithstanding, China will forward to enhance cooperation and understanding with the Philippines as Manila hints toward foreign policy re-alignment as the new President Rodrigo Duterte hints at foreign policy re-alignment.

Not all the Association of Southeast Asian Nations (ASEAN) countries are claimants to the South China Sea dispute. Moreover, they have varied levels of dependence on China in various fields. Beijing successfully exploits the situation to its advantage, and also wedges differences on some key issues including the territorial disputes over the Spratly Islands. In some occasions, Cambodia and Laos blocked the ASEAN joint statement on the issue[2]. A divided periphery serves China's objectives as long as no other power finds a foothold in the vicinity of China. China has not moved beyond its stand of bilateral consultations and negotiations to resolve the issues.

On October 18, Duterte visited China to build political trust and handle the differences. In order to facilitate infrastructure development with Chinese funds, Duterte expressed willingness to join the 'One Belt, One Road' Initiative. In fact, China is the first non-ASEAN country visited by him after taking office in June this year[3]. China assured cooperation in fight against illegal drugs, terrorism and crimes. Moreover, China expressed readiness to increase cooperation in areas such as connectivity, infrastructure construction, production capacity, agriculture, finance and trade and investment. In the wake of the PCA's ruling, the relationship deteriorated causing more tensions.

The Philippine looks forward to create a new image of the country by pursuing an independent foreign policy. Yet it is not clear how far the Southeast Asian country will go to reduce dependence on the US. In this regard, the Philippine foreign affairs secretary Perfecto Yasay stated that it would not be in the best interests of the country to separate from the US[4]. The revelation underscores pragmatism in foreign policy while dealing with two major powers in the international system. The new Philippine Government would enhance economic relations with Beijing but it is very unlikely to give in to Chinese pressure over the territorial issue[5]. Nevertheless, China can make attempt to restrain the behaviour of the Philippines, and influence its foreign policy by enhancing cooperation in various areas[6].

On July 25, 2016, in his first State of the Nation Address, Duterte made some major policy pronouncements. Besides infrastructure improvement, he announced to crack down upon criminals, narcotic drugs, religious fanaticism, terrorism and corruption[7]. As the Philippines looks for investment in areas such as connectivity, infrastructure construction, production capacity, agriculture and finance, China has expressed willingness to support the Southeast Asian country[8]. A total of 13 deals worth over US$13.5 billion were signed during the visit. Duterte's plans to ramp up infrastructures could be facilitated by funds from China. On October 22, 2016, China has launched a new fund called the China Ocean Strategic Industry Investment Fund (COSIIF) to support Chinese enterprises investing in foreign markets, especially along the 21st Century Maritime Silk Road[9]. In 2014, China established the Silk Road Fund with a contribution of US$40 billion. The Philippines government has expressed interest in the China-initiated Asian Infrastructure Investment Bank (AIIB) which was set up in 2015 with an initial capital of US$100 billion.

Though China can provide funds for various development projects in the Southeast Asian country, political trust remains low because of territorial dispute and other maritime interests. China occupied the Scarborough Shoal (known as 'Huanyan Dao' in China) in 2012, and the Chinese vessels harass the Philippines' fishing community depriving a rich fishing ground within the EEZ of the Philippines[10]. In addition, Chinese coast guard ships blocked food supplies and rotation of marines aboard a grounded Philippine navy ship in the Second Thomas Shoal. Similarly, after establishing its control over the Mischief Reef in 1995, China has turned the reef into an artificial island. Furthermore, the Chinese armed forces have been conducting regular high-sea trainings in the Western Pacific Ocean by crossing the Bashi Channel that divides Taiwan and the Philippines[11]. The Chinese navy and air force have stepped up joint drills in the South China Sea. Thus, Chinese activities in the South China Sea created a new ground for the Philippines to reassess its position concerning foreign military bases in the country.

After shutting down former US military bases in 1991, the Philippines entered into a pact with the US in 1999. The Visiting Forces Agreement allows annual visits of US forces to conduct the 'Balikatan' (It means 'shoulder-to-shoulder' in Tagalog language) annual military exercises. However, the Enhanced Defence Cooperation Agreement (EDCA) signed in April 2014 would provide the US troops and equipments access to the Philippine military bases on a rotational basis. The pact was approved by the Philippine Supreme Court in January this year. Under this agreement, the US military personnel will be based in Antonio Bautista Air Base, Basa Air Base, Fort Magasaysay, Lumbia Air Base and Mactan-Benito Ebuen Air Base[12].

Return of the US armed forces to military bases in the neighbouring Southeast Asian country was not in favour of China. However, the poorly-funded armed forces of the Philippines cannot balance the military capability of the China. On the other hand, China has felt increasing US pressure in its neighbourhood because of the Obama Administration's 'Pivot to Asia'. Unlike the pact of 1999, the new defence agreement would allow larger military presence of the US in the Philippines as it grapples with China's military assertion in the South China Sea. Being the former colonial master of the Philippines, the US continues to face some opposition from the Philippine society when it comes to establishing military bases[13]. The US will remain a major player in the South China Sea but Beijing has regained confidence in the wake of Duterte's state visit. The relationship was strained due to the PCA's ruling against China.

The unfolding events in China-Philippines relations would restrain adventurism on both sides. As for China, despite the goodwill of the new Philippine government towards peaceful resolution of the maritime dispute, Beijing will have to deal with the ruling of the PCA as the Duterte Administration accepts it. Meanwhile, the US will refrain from certain actions to avoid displeasure of the Philippines as the latter asserts sovereign equality of all nations. The Hague ruling has enhanced Manila's international standing in relation to China's assertiveness in the region. Nevertheless, the ruling also favours Manila in its dealing with the former colonial master to follow an independent foreign policy. In fact, Manila does not have resources to balance China internally, but at the same time does not want to be subservient to the US.

Footnotes:

1 Dipanjan Roy Chaudhury, "China should accept PCA ruling on South China Sea: Expert," Economic Times, August 07, 2016 (updated), Opinion section, http://economictimes.indiatimes.com/opinion/interviews/china-should-accept-pca-ruling-on-south-china-sea-expert/articleshow/53584165.cms, accessed on October 24, 2016.

2 Ibid.

3 An Baijie, "Xi, Duterte hail 'springtime' of ties," People's Daily, October 21, 2016, http://en.people.cn/n3/2016/1021/c90000-9130519.html, accessed on October 21, 2016.

4 "'Little brown brother image' of Filipinos stunts Philippines: foreign secretary," People's Daily, October 23, 2016, World news section, http://en.people.cn/n3/2016/1023/c90000-9131363.html, accessed October 24, 2016.

5 "Duterte says Filipinos may be able to return to China-held Scarborough Shoal 'because we won in court', The Japan Times, October 24, 2016, Asia Pacific news section,

6 Joint Statement of the People's Republic of China and the Republic of the Philippines, People's Daily, October 21, 2016, World news section, http://en.people.cn/n3/2016/1021/c90000-9130952.html, accessed on October 24, 2016.

7 State of the Nation Address of Rodrigo Roa Duterte President of the Philippines to the Congress of the Philippines Session Hall of the House of Representatives, July 25, 2016, http://news.abs-cbn.com/focus/07/25/16/read-transcript-of-president-dutertes-1st-sona, accessed on October 23, 2016.

8 "China, Philippines eye for enhanced economic ties," People's Daily, October 21, 2016, http://en.people.cn/n3/2016/1021/c90000-9130557.html, accessed on October 21, 2016.

9 Liu Zhun, "China Ocean Strategic Industry Investment Fund to promote 'Belt and Road' initiative," People's Daily, October 24, 2016, http://en.people.cn/n3/2016/1024/c90000-9131645.html, accessed on October 24, 2016.

10 Eva Fu, "China Blocks Philippines Fishing Boat, Reasserting Its Claims to South China Sea," Epoch Times, July 15, 2016, Asia & Pacific news section, http://www.theepochtimes.com/n3/2116851-china-blocks-philippines-fishing-boat-reasserting-its-claims-to-south-china-sea/, accessed October 24, 2016.

11 Ankit Panda, China's Air Force revisits the Bashi Channel. Here's why that matters, September 13, 2016, The Diplomat, http://thediplomat.com/2016/09/chinas-air-force-revisits-the-bashi-channel-heres-why-that-matters/, accessed on October 25, 2016.

12 Prashanth Parameswaran, A Big Deal? US, Philippines Agree First 'Bases' Under New Defence Pact, March 19, 2016, The Diplomat, http://thediplomat.com/2016/03/a-big-deal-us-philippines-agree-first-bases-under-new-defense-pact/, accessed October 23, 2016.

13 Javier C. Hernandez and Floyd Whaley, "Philippine Supreme Court Approves Return of U.S. Troops," New York Times, January 12, 2016, http://www.nytimes.com/2016/01/13/world/asia/philippines-us-military.html?_r=0, accessed on October 24, 2016.