Aquino: Trade Good For China
China, Philippines Seek Modus Vivendi

China pressures Philippines to recognize its China Sea claims in return for trade, calls on Indian ship to identify itself off the coast.

Amiel Ungar,

Benigno Aquino
Benigno Aquino

The South China Sea territorial dispute continues to make news.

A Chinese warship called upon an Indian naval vessel to identify itself in an assertion of sovereignty over the area off the coast of Vietnam, the Financial Times of London reported.

This is the first naval encounter between the two Asian giants. India denied the story, but other sources confirmed it.

Meanwhile the president of the Philippines, Benigno Aquino was visiting Beijing and one of the items on the agenda was the territorial dispute over the South China Sea or, as Manila calls it, the West Philippines Sea.

China maintains that these issues have to be settled bilaterally while the Philippines together with other small Southeast Asian countries want the issue to be settled multilaterally and regionally so they can band together against China.

The two sides therefore tried to work on a "code of conduct"—i.e. practical arrangements for peaceful solutions to the dispute. This was a way to get around the disagreements, as Aquino conceded, saying "Our positions previously were really so disparate. They were too far apart."

The Philippine president came to Beijing to discuss trade on his first state visit to China and he was accompanied by over 250 businessmen. His objective was to double bilateral trade between the two countries which totaled nearly $28 billion last year.

China hoped to use the Philippine interest in trade to pressure their guests into making concessions on the territorial issue.

The China Daily, in an editorial, reflected the official line:

"However, it has to be acknowledged that a stable and sound relationship of the two Asian nations should be underpinned by not only strong trade ties, but also their commitments to a proper settlement of the maritime disputes in the South China Sea.'

In other words, if the Philippines want trade, they will be expected to make concessions on China's territorial claims. Instead of embracing Chinese candidness and goodwill, remonstrated the commentary, some Philippine politicians continued to release "irresponsible remarks" denying China's rights.

President Aquino pushed back against this pressure by claiming that China had as much to gain from good trade relations with the Philippines as did the Philippines. The Philippines had exceeded the growth rates exhibited by Thailand, Korea and Malaysia and were now poised for takeoff

“In the past, our commercial relations have been more beneficial to you than to us. Now we have come here to balance the equation.”

China was advised to get in on the ground floor. 

“I encourage you to ride on this wave of optimism. The time to put in place strategic investments in tourism, agriculture and infrastructure is now,” Mr. Aquino said.