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So far, the China visit of President Aquino has produced agreements on the economic and business side but minimal on the political and boundary issues. There is a definite toning down of expectations regarding the latter although much hype has been done on the former.

Of course, this is as it should be, given the complexity of the territorial claims issue, intertwined as it is with strategic geopolitical ones and the prospects of huge gas and oil deposits in the areas being claimed. To the extent that they can play down the tensions associated with widely-varying positions on the claims, the two sides evidently relegated the issue to future negotiations, including the latter’s terms of reference.

What the two sides are doing is still in the confidence-building stage. Aside from the obvious business and economic benefits derived from the agreements so far, the visit conveyed to each party the other side’s willingness to talk over the territorial claim issue.

The Philippines, in addition, also offers its own incentive to include the possibility of a joint oil exploration in the contested areas outside of its own exclusive economic zone. China seems hesitant so far but the offer is tempting since it does not bind future arrangements.

China also tempts the Philippines with prospects of more economic ties, including a US$60 billion investment, a US$7.7 billion development investment loan, and a ten-fold increase in tourist arrivals. On its own, this economic package, if realized, offers a huge safety net in the face of the worsening global recession. If used wisely, this can stabilize and expand the domestic industries and lay the foundations for sustained economic growth, at least in the medium term.

The visit will not, of course, stop the current military, diplomatic, and political strategies being pursued by each party in relation to the claims in the South China Sea (also called West Philippine Sea). However, it should lead to a more manageable future negotiation and less tension in the area.

China has made a major move in the Chinese checkers game with the economic and business gambit. And it seems, the Philippines wants to be part of the play, rather than be a mere chip on the board. It wants to reconfigure its ties with China—as a friend and partner rather than as a perceived minor power with overweening ambitions.

How will the United States, a close Philippine ally with considerable interests of its own in the area, craft its reposté? Definitely, it will not let its own bargaining power weaken in the face of the success of President Aquino’s China visit. An official visit to the US perhaps?

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