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    Southeast Asia
     Sep 12, '13

New nadir for China-Philippine ties
By Richard Javad Heydarian

MANILA - As the Philippines prepares for a new defense agreement to enable an expanded US "rotational" military presence on its soil, bilateral relations with China have taken a turn for the worse. Amid uncertainties over a diplomatic resolution of territorial disputes in the South China Sea, there is growing worry over how deteriorating Philippine-China relations could escalate.

Shortly after US Secretary of Defense Chuck Hagel's high-profile visit to Manila in late August, a trip that signaled Washington's resolve to step-up its military footprint in the Philippines as part of its broader "pivot" to the Asia-Pacific region, China took the unprecedented decision to rescind its invitation to Philippine

President Benigno Aquino to the 10th ASEAN-China Expo (CAEXPO) in Nanning, China.

The episode generated an uproar in the Philippines while simultaneously deepening fears of an irreversible slide towards confrontation. Aquino's plan to visit China was generally viewed as a constructive effort to re-establish communication channels between Manila and Beijing, most especially because Aquino and his Chinese counterpart, Xi Jinping, are yet to meet as state leaders. As the leader of Asia's biggest economy, Xi has already met all regional leaders apart from Aquino.

The last time Aquino sought to meet his Chinese counterpart was during the presidency of Hu Jintao, on the sidelines of the 2012 Asia-Pacific Economic Cooperation Leaders' Summit in Vladivostok, Russia. On that occasion, Hu refused to meet the Filipino leader, citing Beijing's outrage at Manila's official renaming of the South China Sea to the "West Philippine Sea".

To up the ante, China consolidated its hold on the contested Scarborough Shoal, which was the site of a months-long stand-off between Manila and China in mid-2012. Concurrent with the controversial rebuff of Aquino's planned visit to China, Philippine defense and foreign affairs officials cried foul over intelligence reports suggesting that Chinese construction activities in the Scarborough Shoal, known as Panatag Shoal to the Filipinos and Huangyan Island to the Chinese.

These building activities are viewed in Manila as a potential prelude to the establishment of military fortifications in the contested feature, which at its closest point is a mere 123 nautical miles from Philippine shores west of Subic Bay and well within its claimed 200 nautical miles exclusive economic zone.

The Philippines faces the dilemma of preventing a conflict and outright diplomatic alienation from China without relenting on territorial issues, which carry huge domestic political implications and resonate across the political spectrum. While Beijing has chosen to more aggressively pursue its territorial claims amid a slowing economy and a crackdown on systemic corruption, the Manila is trying to match its rising economic profile with a more assertive defense posture. Aquino has backed plans to spend around US$1.6 billion on military modernization in the next five years.

Given its military vulnerability as well as the geographical proximity of contested territorial features to its mainland, Manila has simultaneously pushed for international arbitration, based on the provisions of the UN Convention on the Law of the Sea (UNCLOS), and stronger American military support to overcome its deterrence deficit. This has expectedly irked hawks within the Chinese civilian and military leadership, who see the Philippines as part of a bigger American strategy to contain China's rise and deny its territorial claims in the oil and gas-rich South China Sea.

Both sides, however, have ample economic, diplomatic and strategic reasons to bridge their differences. Regionally, China and the Philippines have tried to communicate their individual national interests and find a common ground under the auspices of the Association of Southeast Asian Nations (ASEAN), as part of umbrella efforts to establish a legally binding code of conduct in the South China Sea.

Dishonored guest
Given ASEAN's institutional handicaps, namely the absence of any compliance enforcement mechanisms or a corresponding process to fast-track the diplomatic resolution of regional disputes, the dynamics of the disputes in the South China Sea have to date been largely determined by military maneuvering.

It was against this backdrop of increasingly overt military jostling that Aquino sought to more directly reach out to China. The 10th CAEXPO in Nanning - where the Philippines is the supposed "country of honor" - represented a perfect opportunity to break the ice in bilateral relations.

Manila acknowledges that the establishment of a more robust US military presence in the Philippines will take time to scale up. Meanwhile, the international legal arbitration of South China Sea disputes is far from feasible in the short-run, mainly because China - as a permanent veto-bearing member of the UN Security Council - has categorically refused to subject its territorial, military, and sovereignty-related claims to external judicial scrutiny.

Expansive bilateral trade and investment relations between China and the Philippines, meanwhile, have served as impetus for reviving bilateral diplomatic ties and avoiding confrontation. However, earlier hopes that Aquino's presence at CAEXPO would put business interests ahead of security imperatives were dashed by his rescinded invitation to the event.

At the height of last year's bilateral standoff over the Scarborough Shoal, China resorted to imposing travel bans on Chinese tourists to Philippines and non-tariff barriers on potentially up to $60 million worth of Philippine banana exports. More significantly, bilateral tensions have also dampened opportunities for multi-billion Chinese investments in the Philippines' decrepit infrastructure, which is deeply in need of foreign capital and modern construction technology.

"If the President will come to the CAEXPO, I am sure he can attract more Chinese investments into the Philippines and sell more Philippine products over there," the Philippine Chamber of Commerce and Industry's president, Miguel Varela, said in late-August, emphasizing how Aquino's visit to China was seen as a crucial step to promote the interests of Filipino industrialists and businessmen interested in China. "This is a great opportunity for us to promote the Philippines not just to the Chinese but to the rest of the world."

Aquino's own statements, however, suggested that the planned visit would have gone beyond mere economic diplomacy. There was a clear effort to initiate high-level talks on the sidelines of the event, paving the way for a re-opening of bilateral diplomatic channels. To downplay expectations of a major diplomatic breakthrough, Aquino decided to limit his trip to a single day, citing his wish not to "overstay" his welcome.

Hardened lines
So when China, mainly in reaction to Hagel's push for a 20-year-long rotational military presence in the Philippines, and shortly after his tense exchanges with Chinese officials over rising tensions in the South China Sea, rescinded its invitation to Aquino and subsequently denied that it had earlier sought his presence, it signaled to many analysts a hardening of Beijing's position.

A commentary by China's state media agency Xinhua summed up the reason for withdrawing Aquino's invitation, effectively blaming the Philippines of diplomatic duplicity: "On the one hand, the Philippines [has] referred the dispute in the South China Sea to a United Nations tribunal for arbitration ... [While] pursuing a 'hard-line' approach by begging military help from the United States and even Japan."

The situation was complicated when Filipino officials claimed that Chinese officials made "subsequent concerns and conditions to the President's attendance". The cancellation of Aquino's visit was thus touted by officials as a decision to "stand firm in the defense of the country's national interest".

Subsequent reports suggested that Chinese officials made Aquino's visit conditional on the Philippines withdrawing its UNCLOS case at The Hague and pulling out its troops and grounded vessel at the contested Second Thomas Shoal - conditions to which Manila would never agree.

Adding fuel to the fire, Philippine Defense Secretary Voltaire Gazmin, based on aerial photos taken by Philippine armed forces, reported the presence of Chinese coastguard ships and about 30 concrete blocks around the Scarborough Shoal. Describing the move as a "prelude to construction", Gazmin characterized Chinese actions as a glaring violation of the 2002 Declaration on the Conduct of Parties in the South China Sea, which discouraged disputing states from (forcibly) occupying contested features in the area.

"First rocks, then a pile driver, then a foundation ... When you get back again, if you don't survey, there will be a garrison," Gazmin warned during his testimony in the Philippine Congress, where he pushed for more legislative support for boosting the military's deterrence capabilities and seeking more external military support. "The important thing is we put men there, so this can be prevented ... [But] we don't have the capability to do that at the moment."

The depth of the diplomatic crisis was seen when the Philippine Department of Foreign Affairs recalled its top representative to China, Ambassador Erlinda Basilio, for a special consultation over the brewing crisis related to China's decision to apparently lay up to 75 concrete blocks in the Scarborough Shoal's vicinity. Filipino officials fear that China is moving closer to consolidating its hold on the contested feature, similar to how it won control of the Mischief Reef in the Spratly Islands after its seizure by Chinese forces in 1995.

Regional leaders are now left with little option but to push for a multilateral solution to the deepening territorial tensions at the forthcoming ASEAN Summit in early October. However, any multilateral resolution of the South China Sea disputes will require a parallel improvement in bilateral relations between the Philippines and China, of which there is currently few, if any, signs.

Richard Javad Heydarian is a Manila-based foreign affairs analyst focusing on the South China Sea and international security issues. He is a lecturer at Ateneo De Manila University's Department of Political Science, and the author of the upcoming book From Arab Spring to Arab Summer: The Economic Roots and the Precarious Future of the Middle East Uprisings. He can be reached atjrheydarian@gmail.com.

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