What Xi did and didn’t give Duterte

Chinese President Xi Jinping concluded today a landmark visit to the Philippines, a two-day tour that aimed to underscore the notion that Beijing is the region’s partner of choice for trade and development.

But the Chinese leader’s highly anticipated visit fell short on several fronts, including on a previous pledge to provide as much as US$24 billion in official aid and private investment for mega-projects, raising questions about Beijing’s true commitment to the Southeast Asian nation.

The trip came at a crucial juncture for both nations, with Xi under rising pressure from an escalating trade war with the US, and Philippine President Rodrigo Duterte under opposition fire for compromising national interests in alleged blind pursuit of warmer ties with Beijing.

An agreement reached to upgrade strategic ties marked a major diplomatic victory for China’s leader, whose foreign policy assertiveness, including in the contested South China Sea, is coming under rising fire.

At the same time, Duterte, who has staked his self-proclaimed “independent” foreign policy on developing stronger relations with Beijing while simultaneously downgrading ties to Washington, was eager to reap demonstrable rewards for his engagement gambit.

Amid much fanfare, the two sides agreed to elevate bilateral relations into a full “strategic partnership.” Beijing clearly hopes the upgrade in ties will dissuade Manila from providing any major assistance to America’s efforts to constrain China’s maritime ambitions, namely in the contested South China Sea.

Duterte has refused to allow US warships to use Philippine ports for conducting Freedom of Navigation Operations in the maritime area. He has also denied America’s request for access to prized bases, namely the Bautista Airbase near the Spratly Islands and Basa Airbase near the Scarborough Shoal, despite their Enhanced Defense Cooperation Agreement.

China is angling for closer defense cooperation with the Philippines, seen in the multiple visits made by Chinese warships and military aircraft to Duterte’s hometown of Davao over the past year. The newly announced strategic partnership could allow Beijing to consolidate a strategic presence in the country.

Ahead of the anticipated visit, the Chinese leader penned an op-ed disseminated by state news agency Xinhua saying “Our relations have now seen a rainbow after the rain.”

Xi’s visit, however, failed to produce any major breakthroughs on areas of concern, including simmering territorial disputes in the South China Sea and China’s still unrealized vow to provide as much as US$24 billion for infrastructure and other development projects across the Philippines.

Beijing’s failure to deliver that capital could be a blessing in disguise amid rising criticism that some of its Belt and Road Initiative (BRI) infrastructure projects are thinly-veiled, sovereignty-eroding debt traps.

US Vice President Mike Pence underscored that criticism at the recently concluded Asia-Pacific Economic Cooperation Summit, where Xi was in attendance. Pence warned leaders gathered at the meeting in Port Moresby to guard against China’s “empire and aggression” in the region.

America’s Donald Trump administration has effectively declared a new Cold War against China, as Washington ramps up its trade war through ever-rising tariffs on Chinese imports while reasserting its military footprint across the Indo-Pacific specifically to keep China’s ambitions in check.

This is why Xi’s visit to the Philippines was of paramount importance to China, as the Southeast Asian country now stands out as a remarkable exception to a now rising anti-China trend. (It is notable, however, that the Philippines’ military recently expanded the number of exercises it will hold with the US next year).

Indeed, the Philippines has emerged as an unlikely crown jewel of the Chinese leader’s “peripheral diplomacy” strategy, which aims to charm once estranged neighbors through aid, trade and investment initiatives, including through BRI backed building.

During Xi’s visit to Malacanang, the Philippines presidential palace where he met Duterte, the two leaders hailed their improved relations after years of mutual acrimony over their South China Sea disputes.

That acrimony came to a head in 2012, when China occupied the Scarborough Shoal after a months-long standoff at sea. The shoal is situated in the Philippines exclusive economic zone (EEZ) and is strategically positioned for China to assert an air defense identification zone (ADIZ) over the maritime area.

Controversially, Duterte’s government has opted to gloss over a mid-2016 decision handed down by The Hague’s Permanent Arbitration Court that ruled in favor of the Philippines against China’s expansive claims to the South China Sea, which through via its nine dash-line map claims 90% of the waterway.

Those conflicts were set aside at Tuesday’s meeting, however. “We charted the future course of China-Philippines relations, and drew an ambitious blueprint for its development,” Xi said at a joint press conference with Duterte.

Xi said the two leaders agreed to a shared “vision” which “charts a clear course for China-Philippines relations” and “sends a strong message to the world that our two countries are partners in seeking common development.”

The Chinese leader also described the two countries as “natural partners with a common destiny,” while emphasizing how his country “will continue to do its modest best to help and support the Philippines.”

“Our support will come in many forms, from lending a hand to your counter-narcotics and counter-terrorism struggle, to helping to repair roads and bridges in Marawi and build new infrastructure there,” Xi added, emphasizing areas of cooperation that are known to be close to Duterte’s heart.

Similarly, Duterte hailed the “positive momentum” in relations as well as “deepening trust and confidence [between] our governments.” He described Xi’s visit as a “landmark moment” for both sides, which has “turned a new page” and opened a “new chapter of openness and cooperation” in bilateral relations.

Crucially, the Filipino leader emphasized “adherence to sovereign equality” as a cornerstone of the two sides’ relations. When uttering the phrase, Duterte looked at Xi, who nodded approvingly in response.

On one hand, “sovereign equality” could be seen as Duterte’s endorsement of China’s non-interference policy vis-à-vis human rights and domestic political issues in neighboring countries.

But it was likely also Duterte’s subtle way of expressing concern about China’s intrusion into Philippine waters, hoping to dissuade Beijing from using coercive force in their ongoing maritime spats in the South China Sea.

Beyond the bonhomie and expressions of mutual admiration, the two sides fell well short of agreeing to a proposed joint development agreement in the maritime area.

There were certain hopes that Xi’s visit would include the signing of a framework agreement for joint resource exploration in the contested sea areas.

As it turned, they only agreed to a Memorandum of Understanding (MOU) signed between Philippine Foreign Affairs Secretary Teodoro Locsin Jr and Chinese Foreign Wang Yi.

According to Philippine Energy Secretary Alfonso Cusi the MOU was “just a cooperation to explore solutions” on “how we can enjoy the resources” in the disputed areas.

The provisional MOU sparked new controversy, however. Shortly ahead of Xi’s visit, a copy of China’s proposed Framework Agreement on Joint Maritime Oil and Gas Exploration between China and the Philippines was leaked to the public.

The document indicated Beijing is exploring for energy resources in the contested Reed Bank area based on a formula that sets aside sovereignty disputes.

The leaked document prompted vigorous opposition from legislators and civil society groups, which have argued that any such agreement would be inimical to Philippine national interests and potentially unconstitutional.

Senators Antonio Trillanes and Francis Pangilinan filed a Senate resolution calling for an investigation into the matter as well as greater transparency from the government regarding the final draft of the agreement.

The resolution said public disclosure of those details were “a matter of paramount public interest” and urged the executive department against signing any agreement with China which “diminishes the Philippines’ exclusive rights.”

Xi’s visit also notably failed to provide clarity concerning the status of billions of dollars of promised Chinese aid, assistance and investment.

Of ten proposed big-ticket Chinese projects, so far only one, the Chico River pump irrigation project worth around US$60 million, has moved towards the implementation phase. Another 20 or so deals are likewise stalled.

Only two projects, namely the implementation agreement on a feasibility study for the Davao City Expressway project and Panay-Guimaras-Negros Island Bridges project, was there a hint of progress – significantly at a time when the Philippine economy is losing steam and needs new growth drivers.

The lack of a firmer Chinese commitment will no doubt add new fuel to opposition claims that Duterte has sold out national interests in the South China Sea and received little in quid pro quo exchange from Beijing.

Unless agreements were reached behind closed doors between the two leaders, and there is no immediate indication that they did, Xi appeared to bring very little to the table for Duterte’s to justify sustaining his high stakes and increasingly divisive rapprochement policy towards China.