Beijing and Manila follow diplomatic thaw with economic embrace
      

Countries sign $13.5bn in trade deals as Duterte distances Manila from US
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China moved to roll back economic sanctions on the Philippines and ramp up investment in the wake of this week’s Beijing visit by Rodrigo Duterte, who this week promised to distance Manila from the US. 
One of China’s incentives for Manila involves Mr Duterte’s home town of Davao. On Thursday the China Communications Construction Company, a state-owned group, signed a memorandum of understanding with Mega Harbour Port and Development of the Philippines to conduct a 208-hectare land reclamation project in Davao harbour. The reclamation is expected to finish by the end of 2019.

No total value was published for the investment and CCCC declined to comment. 

In total, the two countries signed 13 agreements on Thursday spanning a variety of economic sectors, while Ramon Lopez, Philippine trade secretary, said the two countries had signed $13.5bn in trade and investment deals. 
China’s foreign ministry further announced that restrictions on 27 Philippine fruit growers on exporting to China would be lifted, as would a travel warning to Chinese tourists to avoid trips to the Philippines. China Eastern Airlines, one of the country’s largest carriers, announced the launch of a direct air route from Guangzhou to the Philippine city of Laoag, starting next month. 

Beijing placed sanctions on Manila in the wake of a 2012 crisis over Scarborough Shoal, a strategic outcrop in the South China Sea that was claimed by Manila, but was seized that year by China. The events caused a decisive break in relations between the two countries, and Filipino fishermen have been prevented from fishing in the area ever since. 

Mr Duterte and his Chinese counterpart, Xi Jinping, agreed to further talks on fishing rights, even as the Philippine president appeared to surrender any leverage he had over China by all but renouncing a July decision by an international tribunal in Manila’s favour. The court in The Hague ruled that China’s expansive claims in the South China Sea had no basis but Mr Duterte seemed to set the ruling aside, describing it as “just a piece of paper with four corners”. 

Experts say an offer of Access to the shoal would give China a face-saving way to recognise at least part of the legal substance of the ruling in Manila’s favour. 

Paul Haenle, director of the Carnegie-Tsinghua Center in Beijing, said there were indications before Mr Duterte’s visit that an agreement could include granting Filipino fishermen conditional access to certain waters around the disputed shoal. “We’ll have to wait to see what was actually agreed on during the meeting and if it can be implemented at sea,” he said. 
But Euan Graham, director of the Lowy Institute in Sydney, said Mr Duterte’s effusive overture may yet undermine any deal. “Duterte is finally discovering that he has placed himself in a weak position by undercutting all his sources of leverage on the South China Sea ahead of the visit. Since he is offering, upfront, to cut ties with the US and align with China, what’s in it for Xi?” 

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