Amid deteriorating relations and a raging trade war between China and the United States, the USS Ronald Reagan aircraft carrier battle group was allowed to make a port call in Hong Kong on Wednesday, a move that can be interpreted as a gesture of goodwill by Beijing in an apparent attempt to de-escalate current tensions.
Meanwhile, Chinese President Xi Jinping went on an official visit to the Philippines.
Apart from billions of dollars worth of infrastructure investment contracts, Xi also has another big gift for the Philippines’ President Rodrigo Duterte: the conclusion of a memorandum of understanding on cooperation on oil and gas development in the disputed waters of the South China Sea.
Relations between China and the Philippines were frosty over the past 10 years. Bilateral ties got even worse after Manila took the territorial dispute in the South China Sea to the Permanent Court of Arbitration in the Hague, which eventually ruled in favor of the Philippines.
However, after Duterte took office, he quickly put aside the Hague court ruling and extended the olive branch to Beijing. He also eagerly embraced China’s Belt and Road initiative.
For the Philippines, teaming up with China to tap into the vast oil reserves in the South China Sea can kill two birds with one stone: avoiding any direct confrontation with Beijing and helping meet its own energy needs.
As far as China is concerned, setting aside the territorial dispute with the Philippines for now and embarking on joint oil and natural gas development can even kill three birds with one stone: first, turning Manila from foe into friend; second, alleviating its own energy shortage, and third, depriving the United States of any excuse to get involved in the South China Sea dispute.
A clever way for China to prevent the US from extending its influence into the South China Sea in the name of defending the freedom of navigation is to conclude bilateral or multilateral agreements with all countries which have territorial claims in the disputed waters.
Once Beijing manages to settle its differences with these countries on the territorial issue, Washington would be in no position to intervene.
Apart from the Philippines, countries which have territorial claims in the South China Sea include Vietnam, Brunei, Indonesia and Malaysia.
Among them, Vietnam is relatively more difficult to deal with. However, Vietnamese Prime Minister Nguyen Xuan Phuc said during his visit to Shanghai earlier this month that he is looking forward to enhancing relations with China.
Judging from his remarks, one cannot rule out the possibility that Beijing and Hanoi may strive together for a win-win situation and stability in the South China Sea in the coming days.
This article appeared in the Hong Kong Economic Journal on Nov 21
Translation by Alan Lee
[Chinese version 中文版]
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