Talking Point

The pivot to Beijing?

Why Duterte’s Beijing tour is being watched carefully by Washington

Duterte-w

Belt and Road diplomacy: Duterte threatens to ditch US on hopes China will invest heavily in the Philippines

“I announce my separation from the United States, both in military but economics also,” Rodrigo Duterte told a group of businessmen yesterday during his state visit to China. “I will be dependent on you for a long time,” the Filipino president told his hosts.

Duterte has waved a series of farewells to Washington during his trip to China this week. As Barack Obama leaves office, America’s foreign policy ‘pivot’ to Asia looks to have been upended by one of its longest-standing partners in the region.

Some of Duterte’s earlier diatribes have been dynamite, castigating Obama as a son of a whore and telling him to go to hell for the criticism of his war on drugs, which has claimed thousands of lives.

Contrast all of this with the mood at the Chinese embassy in Manila, where Zhao Jianhua, China’s ambassador to the Philippines, has been waxing lyrical about a new era of friendlier ties. “The clouds are fading away. The sun is rising over the horizon, and will shine beautifully on the new chapter of bilateral relations,” Zhao has enthused.

Duterte, who took office in June, says he’s fed up with the Philippines’ foreign policy being dictated by a Western agenda, and that he wants to refashion his country’s approach. The Chinese may be the major beneficiary. “What kept us from China was not of our own making. I will charter a new course,” he promised.

What’s the background to the changing mood?

The warmer relations between the Philippines and China are something of a surprise, after rising tensions over their rival maritime claims in the region, and the ruling in Manila’s favour by the UN-backed Permanent Court of Arbitration in The Hague in July (see WiC333).

One of the main flashpoints is Scarborough Shoal, a coral atoll claimed by Beijing as Huangyan Island and by Manila as Panatag. Although the shoal is traditionally a fishing ground for Filipino trawlers, the Chinese have blocked access since 2012, driving away intruders with water cannons.

The confrontation brought the Philippines closer to Washington and the two signed a deal giving American troops more access to bases closer to the flashpoints. Over the same period the Americans have been working with other countries to counter Chinese activity, including freedom of navigation exercises by the navies that challenge Beijing’s claims to islets it has occupied.

The row also prompted Manila, under Duterte’s predecessor Benigno Aquino, to bring the case against Chinese claims in the South China Sea, where Beijing defines its rights according to a ‘nine-dash line’ that encircles the large majority of the region’s waters. Duterte took office in June and a month later the tribunal ruled that the boundary had no legal basis, although the Chinese say the ruling is worthless because the court has no jurisdiction.

But rather than muster support behind the ruling, Duterte’s government has been tacking closer to China and threatening to break with Washington. Aside from his rebuking of the US president, he has threatened to expel American troops from the southern island of Mindanao, suspended joint military exercises, and even dumped the defence agreement signed by Aquino.

Contrast that with his media effort in China this week, where Duterte talked positively to the state news agency Xinhua about his Chinese heritage (his grandfather was born in Xiamen) and his hopes for closer relations between Manila and Beijing. “It’s only China [that] can help us,” he insisted.

Why does Duterte want to butter up Beijing?

During his presidential campaign Duterte played to the crowd, saying he was ready to travel to islands claimed by China and protest in person.

“I’ll go down, riding a jet ski, carrying a Filipino flag… and then I would say, ‘This is ours, and do what you want with me’. I would stake that claim, and if they want to [kill me], you know, I have the ambition of being the hero too,” he told the media.

Since he was elected he has toned down the bluster, telling Xinhua that “there is no sense fighting over a body of water” and that “most of all, we want to talk about business”.

In part this is pragmatism – the Philippines doesn’t have the military heft to deter Chinese encroachment.

“The U.S. gave us two aircraft without weapons… what we could face are 3,000 aircrafts from China,” Duterte said in an interview with Hong Kong-based Phoenix TV in advance of his China trip.

It’s also no secret that his administration wants Chinese funding for railways, roads and power stations and his trade officials last week flagged expectations that at least $3 billion in loans would be offered during his visit.

“I have a good feeling they [China] really want to help us in a big way. If I get something big, I promise you, I will build hospitals and schools from the soft-term loans we will get. If there is anything left, I will use it to help you build a power plant,” Duterte told residents of impoverished Basilan last week.

The Philippines has missed out on Chinese lending in the massive Belt and Road infrastructure programme and Duterte has been clear that he wants to get his compatriots onto the bandwagon. “If we can have the things you have given to other countries by way of assistance, we’d like to be part of it and to be a part of the greater plans of China for the whole of Asia, and particularly Southeast Asia,” he told Xinhua.

How have the Chinese responded?

The early signs of a charm offensive have included an end to a four-year ban on imports of Philippine bananas, worth $250 million a year, and the lifting of a longstanding warning against travelling to the Philippines.

This week the Chinese have also offered more than $9 billion in low-interest loans, and Philippine officials said that the delegation now expects to sign economic agreements valued at $13.5 billion.

In return Beijing will want to grab the opportunity to fracture the opposition to its policy in the South China Sea, and detach one of the more vocal opponents from the lobby group.

That’s probably why what was originally scheduled as a two-day trip was elevated to a four-day state visit, the highest diplomatic level. More than 400 business leaders from the Philippines were in tow.

Another key positive as far as Beijing is concerned is that Duterte is ready to break with protocol and talk directly instead of negotiating as part of a regional coalition in conjunction with the US.

“We are not interested in allowing other countries to talk. I just want to talk to China,” he told Xinhua.

The visit gives the Chinese another chance to trash the ruling from the United Nations tribunal too. “Given the positive signs, Duterte’s widely-watched visit functions as a litmus test of his sincerity and political wisdom,” an editorial in Xinhua noted approvingly. “Among others, he needs to resist the temptation to thrust the so-called final award in the arbitration case into bilateral talks on the South China Sea issue. The verdict issued by a law-abusing tribunal has no place in the negotiations at all.”

Duterte played ball in the days before his trip, promising to avoid “hard impositions” during the discussions. “We will talk, we will maybe paraphrase everything in the judgement and set the limits of our territories, the special economic zones,” he assured.

On the other hand, he also made clear to the Filipino press that he would never give up on his country’s sovereign rights. “We will stick to our claim. We do not bargain anything. We will continue to insist on what is ours,” he promised.

The status of the shoal doesn’t seem to have been discussed directly during Duterte’s visit. China’s foreign ministry said both countries had agreed on coastguard and fisheries cooperation, but did not give details.

One possibility: some kind of concession from the Chinese on fishing rights at Scarborough Shoal, as long as it isn’t seen to be conforming to the tribunal’s ruling. Duterte has also hinted that he is open to discussion on resource sharing and that he wants the Chinese to “allow” Filipino fishermen to return to the area. Beijing’s stance is that it has a claim to oil or natural gas deposits within its ‘nine-dash line’ even if they fall in exclusive economic zones of other nations. It has been pushing for bilaterally negotiated ‘joint development’ despite the ruling from the tribunal that the resources belong solely to the coastal state.

But even an exploratory deal like a joint fisheries pact could be problematic, as the Filipino constitution doesn’t permit dual activity in its exclusive economic zones unless the other party agrees to Filipino sovereignty. Antonio Carpio, a judge at the country’s Supreme Court, has even warned that the president could be impeached if he gives too much ground.

And why might the Chinese be cautious about Duterte?

For a start, they will wonder about the unpredictability of someone who seems willing to cut loose a longstanding ally like the Americans.

Another query is whether such an unconventional leader will be able to convince the Filipino establishment to take the same pro-China line, particularly in a country that has always looked favourably on the US.

A recent survey from Social Weather Stations, a Manila-based polling body, indicated that 55% of Filipinos regard China with “little trust”, and only 22% have “much trust” in relations with the Chinese. The Americans are viewed much more positively, however, with 76% of respondents claiming “much trust” in the country.

Nor is Duterte in such a strong position that he can afford to disregard domestic pressure to hold firm on his country’s claims or ignore advice warning him not to fracture Manila’s longstanding alliance with Washington.

“Are we throwing away decades of military partnership, tactical proficiency, compatible weaponry, predictable logistics and soldier-to-soldier camaraderie, just like that?” Fidel Ramos, the former Filipino president and now Duterte’s envoy to China, asked in an editorial in the Manila Bulletin.

A final question to ponder is whether Duterte might be playing a game of diplomatic double bluff, and that the rapid rapprochement with the Chinese is designed more as a signal to Washington to boost its support for Manila in the region.

That might help to explain a confusing strategy in which Duterte has seemed intent on destroying his relationship with the Americans before he has secured any meaningful concessions from China.

“It’s a strange negotiating tactic,” Gregory Poling of the Center for Strategic and International Studies told the Wall Street Journal, noting that the Filipino president was “unilaterally abandoning the only leverage he has over Beijing – the US security umbrella”.

In the same context, Eduardo Araral and Richard Heydarian have written in the South China Morning Post that Duterte’s cosying up to China makes more sense if he is really angling for more American aid, including an increase on the annual $180 million his country gets for allowing American troops to be stationed there.

Duterte is said to be frustrated that nations such as Egypt, Pakistan and Jordan have been getting billions of dollars of subsidies – far more than the Philippines – despite refusing to host bases for American forces.

In this reading of events, the suggestion from Duterte that he might buy arms from the Chinese could be another of his negotiating tactics, just as the championing of his new friendship with Beijing might be his way of drumming up more military support from Washington, and building up a more credible counterpunch to the Chinese in the region.

In the meantime, China’s foreign policy strategists will be cautious, trying to work out the motivations of the volatile Filipino president.

On the one hand, he’s the man who celebrates his Chinese ancestry and seems determined to rupture his nation’s key relationship with the Americans.

On the other, there are his wilder vows to confront the Chinese, including promises made to his troops this summer that there would be an awful price to pay for infringing on Filipino territory.

“I guarantee to them [China] if you enter here, it will be bloody,” he said. “And we will not give it to them easily. It will be the bones of our soldiers, you can include mine.”


© ChinTell Ltd. All rights reserved.

Exclusively sponsored by HSBC.

The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.