Philippines-China economic ties may persist amid US presence


THE PHILIPPINES under President Ferdinand R. Marcos, Jr. would probably keep close economic ties with China despite a security partnership with the United States, according to political analysts.

But increasing tensions in the South China Sea and Manila’s involvement in the China-Taiwan conflict pose threats to their relationship, they said.

The Marcos administration is likely to keep a stable relationship with China, security analyst Karl Gerard See said in a Facebook Messenger chat. “The Philippines is not in any position to turn away help, least of all economically.”

The US would get access to four more military bases of the Southeast Asian nation, their defense chiefs said on Thursday, amid mounting concern over China’s increasing assertiveness in the South China Sea and tension over self-ruled Taiwan.

The US would be given access to four more locations under the 2014 Enhanced Defense Cooperation Agreement (EDCA), US Defense Secretary Lloyd Austin and Philippine Defense Secretary Carlito Galvez said at a joint briefing in Manila.

They also said projects at five existing EDCA sites were almost finished.

“Philippine-China relations would remain stable unless there’s a significant provocation or confrontation,” Mr. See said, noting that their ties have been relatively stable under the government of ex-President Rodrigo R. Duterte despite joint sea patrols with the US.

“Recent improvements in US-Philippine relations don’t have that automatic negative effect on our relations with China,” Enrico V. Gloria, who teaches foreign policy at the University of the Philippines, said in a Messenger chat.

“It remains to be seen how Philippine-China relations will progress moving forward after this recent development.”

China is the Philippines’ biggest trade partner. Philippine exports to China hit $10.97 billion last year, while imports from China reached $28.2 billion, according to data from the local statistics agency.

The Marcos government expects the Philippines to benefit from China’s economic reopening especially in tourism, which accounted for 5.2% of Philippine economic output in 2021.

“Improving relations with the US doesn’t have to come at the expense of the gains we’ve made in our relations with China during the past couple of years,” Mr. Gloria said.

Achieving a win-win situation “requires a lot of diplomatic skill and diligence” on the part of the Philippines, while sticking to an independent foreign policy, he added. 

“While we have already pledged additional EDCA locations in strategic areas in the country, and near crucial areas that have caught the attention of China recently, it is also in our interest to ensure that the intended activities in these locations would only serve the shared interests of the alliance,” Mr. Gloria said.

Timely disaster response, interoperability of troops and deterrence are among the benefits the Philippines will get from its alliance with the US, he said.

China’s focus shift from manufacturing to services such as telecommunications, electricity distribution and banking is driving the expansion of Chinese investments overseas, particularly in Latin American countries, according to a report from think tank Foreign Affairs.

“There is another reason to expect a more active Chinese presence in Latin America in the coming years: the region is headed for an economic crisis that China is primed to exploit,” it said.

Unlike the Philippines, countries in Latin America are not locked in a territorial dispute with China.

“We might want to study the results or status of China’s investments in Latin America. Knowing China’s track record will help us even though it will delay our decision,” Mr. See said.

Joseph Herman S. Kraft, who teaches political science at UP, said trade relations between China and the Philippines “still heavily favor China.”

“Until there is a clear realization of the gains from economic relations with China, we are just discussing their promise and potential,” he said via Viber, noting that China had failed to deliver on its investment pledges to the Duterte government.

The Foreign Affairs report said China might exploit the trend toward populism and “undemocratic ideas” among Latin Americans to advance its presence there. The lack of political reforms and public discussion on the importance of democracy also make them prone to Chinese dominance.

“China may try to upgrade economic relations with the Philippines, increase scholarships available to Filipinos especially to military and police officers, and engage in joint business enterprises with Philippine companies to balance US influence,” Mr. Kraft said. 

“But these initiatives will also be seen in conjunction with their activities in the South China Sea that undermine Philippine sovereign rights.”

Last month, Mr. Marcos met with officials of China Communications Construction Co Ltd. to talk about its proposal to build an industrial park for its grass cultivation and processing projects.

The US blacklisted the Chinese state-owned company in 2020 for militarizing Philippine-claimed areas in the South China Sea.

“It’s not incompatible to maintain economic ties with one and become security tied with another,” Halsey A. Juliano, a political economy researcher, said via Messenger chat. “This has been an international relations practice in Southeast Asia.” 

“The importance is in drawing key nonnegotiable lines for your own policy.”

Mr. Juliano said the local elite’s penchant for foreign investments would facilitate increased Chinese presence in the Philippines. “It wouldn’t be inconsistent with our elite’s tendency for foreign dependency to keep Chinese economic partnerships as much as they restore ties with Japan and the US.” 

“The challenge now is for our opposition and civil society to provide genuine checks to the country’s foreign policy and propose alternatives that people will care about,” he said.

EDCA, which was signed in 2014, is seen as strategic to Washington’s defense of Taiwan, which is being claimed by China. Taiwan is just 390 kilometers away from northern Philippines.

Mr. Kraft said Philippine-China ties would likely be affected by increased tensions in the Taiwan Strait, which “will inevitably involve the US and most likely its forces in the Philippines.”

“At the same time, any uptick in incidents of Chinese Coast Guard harassment and presence in the West Philippine Sea would not be conducive to warming bilateral relations with the Philippines,” he added, referring to areas of the South China Sea within the Philippines’ exclusive economic zone.

Temario C. Rivera, a political analyst, urged the Marcos government to pursue doable diplomatic initiatives with China to manage the South China Sea dispute.

“One immediate point of intervention should be an agreement to allow full access by our fisherfolk to all our maritime entitlements,” he said via Messenger chat.

Increased US presence in the Philippines would prompt China to reexamine its relations with the Philippines, said Terry L. Ridon, a public investment analyst.  He said it might limit Philippine exports and delay or shelve development commitments.

“While the president can always make independent foreign policy his main strategy, contending world powers will definitely look at these additional bases as pivoting toward Washington,” Mr. Ridon said.

“In response to these recent events, the public should expect less warmth in various aspects of Philippine-China relations.”

Source B World Online