Duterte wants to use South China Sea ruling to warm China relations

MANILA (Bloomberg) - Philippine President Rodrigo Duterte’s much-touted meeting with Chinese leader Xi Jinping does not appear to have yielded an agreement on the South China Sea territorial dispute between the two nations or a plan to explore the area for oil and gas.

Instead, Xi said China and the Philippines should aim to conclude talks on the Code of Conduct in the South China Sea by 2021 or earlier, the state-run Xinhua News Agency reports in Weibo post.

Duterte and Xi witnessed the signing of six deals after a meeting in Beijing late Thursday. These included a loan agreement for a rail project across the Philippines’ main island, while a joint oil and gas exploration was not in the list provided to media.

The Philippine leader said the two countries were in a clear path of partnership, according to portions of the bilateral meeting aired by state-run People’s Television, while Xi was quoted as saying that he will work with Duterte to further improve relations.

The meeting’s expected outcome shows exploration talks are proceeding “as slow as can be expected,” said Jay Batongbacal, director of the University of the Philippines Institute for Maritime Affairs and Law of the Sea.

“This will only be the start of the process. This does not guarantee that a final agreement will be signed,” Batongbacal said.

While an oil deal where Manila gets a bigger share might appear to be a win for Duterte, it could undermine Philippine interests in the future because an agreement may give credence to China’s sea claim, said Collin Koh, research fellow at the S. Rajaratnam School of International Studies in Singapore.

“This deal may even embolden China to demand a share of energy resources in other Southeast Asian nations’ exclusive economic zones, in waters that Beijing lays no legitimate resource claim to,” Koh said.

Chinese Warships

Duterte may also raise with Xi the presence of Chinese warships and survey vessels in Philippine waters, which has triggered diplomatic protests from Manila over the past weeks.

It’s unlikely that Duterte’s meeting with Xi will yield a concrete plan to address the issue, said Jeffrey Ordaniel, assistant professor of international security studies at Tokyo International University.

“Xi wants a good media narrative out of his meeting with Duterte,” Ordaniel said. “Certainly, China wants to create a false atmosphere of calm and cooperation in the South China Sea.”

China wants to “expand practical cooperation to ensure steady and sustained progress” in its ties with the Philippines through Xi’s meeting with Duterte, Chinese Foreign Ministry spokesman Geng Shuang said last week.

The meeting is also taking place amid Beijing’s crackdown on the Philippines’ billion-peso online casinos catering mostly to Chinese nationals despite a gambling ban in mainland China. Manila has stopped granting new permits for online casinos, but China wants a total ban.