Duterte and the Philippines: No Pivot to China Just Yet

Beijing is courting the Philippines president, but the U.S. has the upper hand



Summary

China wants to have the Philippines as an ally, and the Philippines wants to decrease its dependence on the United States. Philippine President Rodrigo Duterte’s recent behavior suggests that a partnership with China is possible. However, the Philippines also needs protection from China’s aggressive or expansionist moves in the South China Sea, which threaten Philippine territorial claims. Until either Manila or Beijing is willing to give up on those claims, a Chinese-Philippine alliance will remain out of reach.
  • Forging an alliance with the Philippines would strengthen China’s strategic position and weaken the U.S.’ strategic position in the Pacific.
  • Duterte’s perceived madness and willingness to open a dialogue with China suggest that China and the Philippines could forge closer ties.
  • China and the Philippines have conflicting imperatives: Both claim sovereignty over some of the same islands in the South China Sea, and neither wants to give up those claims.
  • Its economic relationship with the U.S. is important for the Philippines, and the U.S. is also its security guarantor against a much stronger and increasingly aggressive People’s Republic of China.
  • The Philippines is leveraging its weak position to get more from the U.S., not to realign with China.
Introduction
Philippine President Rodrigo Duterte’s penchant for choice language has made the Philippines a topic of regular media coverage. While Duterte’s language is often crass, it is the content of his statements that is controversial. A theme of developing an independent foreign policy for the Philippines runs beneath all of his insults. In many of Duterte’s public remarks, he has insinuated that he will terminate the Philippine relationship with the United States; block U.S. troops from making extended stays in the Philippines, building bases and operating on approved bases; and turn to China and even Russia as potential weapons suppliers and allies. During an official visit to China in October, Duterte said that “America has lost” and that the Philippines would align itself in China’s “ideological flow.”




 

Duterte Philippines China
Philippine President Rodrigo Duterte, left, and Chinese Vice-Premier Zhang Gaoli at the Philippines-China Trade and Investment Forum in Beijing, China, on Oct. 20, 2016. Wu Hong-Pool/Getty Images
 
China wants to use the Philippines because a Chinese-Philippine alliance would solve China’s main strategic weakness – the various choke points around its coast that it cannot currently control. The U.S. wants to continue to use the Philippines as a key part of its naval strategy in the Pacific, like it has for decades, because the Philippines is highly valuable strategic territory and Philippine alignment with the United States is a key part of U.S. naval dominance in the Pacific. The Philippines wants to gain some degree of independence in its foreign policy, and that means not being too dependent on any outside power. At present, the Philippines is extremely dependent on the United States, Manila’s most important economic and military partner, despite whatever Duterte may say to the public. There will be continued tension and fireworks at the upper diplomatic level, but the fundamentals of the U.S.-Philippine relationship will remain in place for the foreseeable future. The cost for China of securing an alliance with the Philippines is too high for either China or the Philippines to bear.
China’s Imperative
China has a key geopolitical imperative: maintaining its access to the sea-lanes that enable it to export its goods to the global market. China faces three key challenges to this imperative.

The first is geographic. Shipments from the country’s ports must transit through a series of islands. These island chains, of which the Philippines is one of the largest, act as potential choke points that could directly threaten China’s access to maritime trade if held by an outside power. Without this trade, China’s economy would enter a crisis. The second challenge is that the Chinese navy does not have the capability of projecting force at the distance necessary to secure these choke points. China only this past year saw its lone aircraft carrier, the Liaoning, make its maiden voyage, and China has a significant way to go before it is capable of operating carrier battle groups.
The short range of its aircraft and its diesel-powered submarines are also limiting factors. This is one of the reasons China is building runways and small bases in places like Subi Reef and Fiery Cross Reef. Third, China faces a challenger in its own backyard with a naval force far more capable than its own: the United States. Furthermore, the U.S. is not alone as it counts among its allies Japan, South Korea and Taiwan, all with significant military capabilities that could be brought to bear in any potential conflict.

Currently, China has very few options in ensuring its imperative to maintain access to global markets, beyond playing by U.S. rules. China, like all countries, would like to be master of its own fate and is therefore engaged, on multiple fronts, in trying to overcome these challenges. This includes pushing military development at home and asserting its sovereignty claims in the South China Sea. However, China could try to flip one of the U.S. allies or find an ally in the region to give the Chinese guaranteed access to the world’s oceans and a place for China to station significant naval and air assets that would greatly increase China’s ability to project force at a distance beyond the Chinese mainland. The Philippines is an excellent candidate for this at first glance. Duterte’s harsh criticism of the U.S. and his willingness to explore the possibility of strengthening Chinese-Philippine relations represents a significant opportunity for the Chinese, one that could strengthen China’s strategic position immensely while simultaneously dealing a serious blow to U.S. power projection capabilities.

When Duterte visited China last October, China rolled out the red carpet for him. Duterte left with promises of $24 billion worth of Chinese investment, which Philippine Trade Secretary Ramon Lopez touted as potentially bringing 2 million jobs to the Philippines in the next five years. If money were all it cost China to secure a relationship with Duterte’s Philippines, China would spend it – gaining the Philippines as an ally would, from China’s strategic perspective, be worth spending the entire Chinese defense budget. The problem is that solidifying an alliance with the Philippines will cost China more than money; it will also cost land over which China claims sovereignty.
Conflicting Goals
Both Duterte’s rhetoric and last October’s Chinese investment deals made headlines across the world. Less noticed at the time was that Duterte left China without an agreement that Philippine fishermen would be allowed to once again fish around Scarborough Shoal, disputed territory between China and the Philippines that China has restricted Philippine access to since 2012. A Philippine official who accompanied Duterte on the China visit noted to local Philippine media that no agreement was reached on Scarborough Shoal fishing rights because China insisted on language saying that Philippine fishermen would be “allowed” or “permitted” to fish near Scarborough Shoal. In effect, this language would have required the Philippines to recognize Chinese sovereignty over Scarborough Shoal, contradicting a recent ruling over sovereignty rights by the Permanent Court of Arbitration that was favorable to Philippine claims.
Duterte, as much as he courted the Chinese, was not willing to sign such an agreement on those terms and instead left empty-handed on the fishing front.


China Philippines claims map

As the above map shows, China and the Philippines disagree about a large group of islands in the South China Sea. (This map does not show other claimants, such as Taiwan, Vietnam and Brunei). China’s President Xi Jinping uses nationalism to maintain the legitimacy of the Communist Party, and Chinese students learn that territory within the so-called “nine-dash line” shown above is China’s sovereign territory. Therefore, the Chinese people likely would not support a policy that includes forfeiting islands they see as belonging to their nation. China wants to secure its access to maritime trade routes, but it will not give up sovereign territory to do so, especially now that the issue has been magnified by the recent international tribunal ruling. Giving in now would prompt memories of all the times China previously bowed to foreign wishes regarding Chinese territory – frustration over that very issue was one of the many forces Mao Zedong and the communists used when they rose to power.

The Philippines, like China, is also a proud and nationalistic country with a less-than-savory memory of Western imperialism. Of course, the United States was the Philippines’ last imperial master, but the U.S. currently has no interest in taking control of Philippine territory. The U.S., which was critical of Duterte under the administration of President Barack Obama over human rights issues, desires an ally that will allow it to station military equipment there to strengthen its power position in the Pacific. It is China that is encroaching on the Philippines’ territory today, and the Philippines is powerless to stop it. Duterte, it should be remembered, came to power with a great deal of support from his people, and his message is about increasing the nation’s security and strength. He is not interested in giving up territory to the Chinese. The results of a 2014 Pew Research Center study help to bear this out. The study found that only 38 percent of Filipinos had favorable views of China, while 92 percent had favorable views of the United States. The reason for this is simple: China is much closer to the Philippines and claims territory that Manila believes belongs to the Philippines.

 

Philippines Perspective map

 

China’s proximity and its territorial claims are not the only reasons the Philippines is wary of China. The Philippines is also much weaker than China. The Philippine military is dwarfed by the Chinese military, and the Philippines depends on the U.S. for its external defense. For one thing, the Armed Forces of the Philippines (AFP) has its hands full with domestic issues, such as a Muslim insurgency in the south. Duterte said he wants the AFP to become involved in his government’s war against the country’s illicit drug industry. Duterte also wants to increase Philippine military spending by 14 percent to $2.9 billion this year. China’s precise defense spending is unknown, but its publicly disclosed defense spending for 2015 totaled $146 billion, whereas the U.S. Department of Defense estimated it at $180 billion and the Stockholm International Peace Research Institute at $214 billion. Even assuming the low figure, China spends almost 50 times more on its military per year than the Philippines. In terms of overall naval capability, the Philippine navy pales in comparison to the Chinese navy, relying mostly on refurbished U.S. Coast Guard cutters as the Chinese continue to build advanced new frigates and destroyers at an impressive pace. When China restricted Philippine access to Scarborough Shoal, the Philippines was powerless to resist.

Recent diplomatic events highlight the fundamental underlying tension between the Philippines’ desire to ally with China and its desire to regain control of its territory. The Philippine foreign minister said on Dec. 16 that the Philippines had no intention of protesting Chinese moves to install new anti-aircraft and anti-missile systems on some islands in the disputed region. Exactly one month later, the same foreign minister revealed that the Philippines had indeed filed a diplomatic protest in the form of a note verbale over China’s moves in the South China Sea. The foreign minister sought to downplay the dispute, but the next day the Philippines’ defense minister said that China’s moves toward militarization are “very troubling” and that the Philippines needs to protect its national interests. Last week, Japan’s Prime Minister Shinzo Abe traveled to the Philippines to present Duterte with a new aid package and, per the Japanese Foreign Ministry, secured an assurance from Duterte that Philippine cooperation with the U.S. would continue.
Economic Dependence
The Philippines is not only dependent on the U.S. from a national security perspective. Both in terms of trade and foreign investment, the United States is a very important partner for the Philippines. China has become increasingly important in recent years, but the U.S. remains the dominant partner. Underscoring how much the Philippines will lose if it separates from the United States under the current circumstances is the number of U.S. allies that also have relationships with the Philippines.

 

Philippines import chart

 

China has the most economic leverage in terms of products imported by the Philippines. In 2015, just over 16 percent of all goods imported by the Philippines came from China; this number increases to just over 19 percent if Hong Kong’s exports to the Philippines are added. The U.S. is the second largest source of goods imported by the Philippines, accounting for 10.9 percent of total imports. Other major U.S. allies – which is to say other powers in the region that oppose China’s moves in the South China Sea, including Japan, Taiwan and South Korea – are also important supplying markets for the Philippines. Together these four nations make up just under 35 percent of Philippine imports. One thing to note is that China only took over as the top Philippine supplier in 2011 (when factoring in Hong Kong’s exports). Since 2006, Chinese exports to the Philippines have doubled while U.S. exports to the Philippines have decreased by 12.3 percent.

The Philippines has a moderate dependence on exports, which accounted for 28 percent of GDP in 2015. However, the Philippines has been weaning itself from export dependence in recent years. Exports reached a peak of 51.4 percent of GDP in 2000, but the Philippines has cut that dependence almost in half. In 2015, China’s and Hong Kong’s combined figures made China the top importer of Philippine products, accounting for about 21.4 percent of all Philippine exports. China and Japan have traded this title back and forth in recent years; in 2015, Japan was the export destination for 21.1 percent of all Philippine products. Here, too, the U.S. role has slowly diminished over time. In 2006, for example, the U.S. was the largest market for Philippine exports and accounted for 18.3 percent of total Philippine exports at the time. The U.S. market now only comprises 15 percent of Philippine exports. While China is technically the largest trading partner for the Philippines, many of the Philippines’ other trading partners are U.S. allies and don’t want to see the Philippines and China develop a close relationship.

 

Philippines export chart

 

The story is similar for foreign investment. According to the Philippine Statistics Authority, total foreign investment in the Philippines was roughly $4.9 billion in 2015.
China was not among the Philippines’ top 10 foreign investors in 2015, and through at least the first quarter of 2016, that didn’t changed. The Netherlands is by far the largest investor in the Philippines, followed by Japan, the U.S. and Singapore. This represents some degradation in U.S. influence – in the 1970s and ’80s, for example, the U.S. was by far the largest investor in the Philippines.
The point, however, remains: China is not a large investor in the Philippines, and many large investors are countries that would react negatively to a Sino-Philippine alliance. Meanwhile, the U.S. is responsible for roughly 10 percent of foreign investment in the Philippines – not one of the largest investors, but still important. It remains to be seen whether China’s pledge of $24 billion worth of investment in the Philippines comes to fruition, especially considering that Duterte has not toed the Chinese line on sovereignty disputes in the South China Sea.


Philippines foreign investments chart

 




If money and trade were the only issues, China could likely generate a significant amount of leverage in the Philippines, and China has been slowly increasing its share in Philippine trade over the past 10 years. China has also shown that if Duterte would be willing to accept the Chinese position on sovereignty of the islands in the South China Sea, China would be willing to considerably increase its relatively small investment in the Philippines. The problem is that if Duterte were to accept China’s terms, he would have to give up Philippine sovereignty claims. Allying his country with China could also mean a great deal of economic difficulty, not just because of the U.S. response, but also because of other countries that would be unhappy about an alliance between Manila and Beijing.
Empathetic Analysis
Duterte’s crass language offends some; his mercilessness in carrying out his self-declared war on drugs and corruption in the Philippines offends others. Many also attribute his mercurial personality and his colorful remarks to stupidity at best and raving lunacy at worst. Looking at Duterte’s actions instead paints a rather different picture, one of a smart, ruthless political leader attempting to play a weak hand to maximize benefits for the Philippines.

At the global level, consider that until Duterte took office, fewer people around the world cared whom the Philippine president was or could name him. The Philippines is a militarily weak country in a dangerous neighborhood, and it faces a Chinese rival that outclasses it in terms of economic, military and diplomatic strength. The Philippines felt threatened and embarrassed, not just by China’s advances, which deprive Manila of what it considers sovereign Philippine land, but also by a lack of firm U.S. support for the Philippine position. Duterte has turned this position on its head by using the Philippines’ one major strength: the strategic importance of its location in the Asia-Pacific region. The Philippines is now being courted by the world’s great powers: China, Japan, Russia and the United States, all of whom are willing to accept Duterte’s outbursts on the chance that doing so might aid their chances of solidifying an old relationship with the Philippines or developing a new one.

Despite U.S. officials insisting that all is well when speaking about the Philippines, despite the fact that Duterte or one of his underlings walks back his anti-U.S. comments each time he makes them, and despite the fact that the 1951 Mutual Defense Treaty signed by the U.S. and the Philippines remains in place, Duterte has injected a degree of uncertainty into the relationship with the United States, which is the Philippines’ main security blanket. When a country is as weak as the Philippines and depends on changing the behavior of a much stronger country, the weaker power must get creative. The one thing the Philippines can do is make U.S. policymakers and strategists doubt that it can be taken for granted, then make demands and hope that the doubt is enough to change the stronger power’s behavior.

For months, the U.S. has been blaming Duterte for potential human rights abuses related to extrajudicial killings in the drug wars, and yet on Jan. 14, the U.S. State Department changed its tune, saying the U.S. was unable to verify human rights abuses in the Philippines. This is a small and relatively insignificant concession in the broader relationship, but the point is that Duterte has already succeeded in shifting the parameters of the relationship to be more responsive to his desires. This is a difficult gambit to continue, but thus far Duterte has done a good job maximizing the value of the Philippines’ geographic position in terms of diplomatic relations.

The Philippines’ main problem with the U.S. is not that the U.S. has been too aggressive – it is that the U.S. has not been aggressive enough in countering China’s expansionist moves in the South China Sea. Duterte is exploring an alliance with China to decrease Philippine dependence on the United States, but the main goal of doing so would be to give Manila more leverage in its relationship with the U.S. The problem for Duterte and Xi is that China and the Philippines ultimately have a fundamental, mutually exclusive imperative. For Manila and Beijing to bury the hatchet, one side must give up sovereignty claims in the South China Sea. Neither side is going to do that, and at the end of the day, what the Philippines needs most is a United States that will defend the Philippines from China. Duterte expresses this sentiment when he criticizes the U.S. for focusing on alleged human rights abuses carried about by the Philippine government. The Philippines focuses on the shared imperatives that have made the Philippines and the U.S. treaty allies since 1951, and Duterte wants the U.S. to mind its own business when it comes to his domestic moves to solidify his power and undertake ambitious reforms.
Conclusión
China wants to have the Philippines as an ally. The Philippines wants to become less dependent on the U.S. The United States wants the Philippines to behave as the U.S. wishes. However, desire does not determine reality. Until either China or the Philippines is willing to give up sovereignty claims in the South China Sea, it is hard to see how an alliance between Beijing and Manila could work. Until the Philippines develops a better military or finds a naval power capable of replacing the U.S. security guarantee, the Philippines will remain an American ally, if a reluctant and boisterous one. The U.S. has always been slow to learn that self-righteous moral indignation does not translate into strategically valuable action and will have to re-examine its approach to the Philippines if it wants the relationship to be based on anything more than superior strength and need.
Duterte is likely to produce plenty more eyebrow-raising quotes, but until one of these variables changes, the Philippine relationship with China won’t progress much beyond a tease.

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