After months of tension over their rival claims in the South China Sea, the Philippines and China are trying to smooth over some of their differences this week, and the chief salve appears to be money. Philippine President Benigno Aquino III arrived in Beijing Tuesday for his first visit to China since taking office last year. He brought with him some 200 Philippine business leaders and expectations of landing as much as $7 billion in Chinese investments. On Wednesday morning Aquino spoke at a trade forum in Beijing, listing partnerships between the two countries and repeatedly declaring that his country is “open for business.”
China’s rapidly rising economy has helped boost its Asian neighbors. For the Philippines, China remains the country’s third-largest trading partner, after Japan and the U.S. But China is rapidly gaining. The Philippines two-way trade with China was up by nearly one-third over the first four months of 2011, according to the Financial Times, versus an increase of 9% with Japan and a drop of 2.5% with the U.S. The newspaper notes that some Chinese-funded infrastructure projects in the Philippines have stalled over corruption allegations, and one of Aquino’s goals while in China will be to get them restarted. At the trade forum Aquino highlighted the Philippines anti-corruption work. “Most important among our efforts, however, is instilling a culture of transparency and integrity in government: weeding out corruption, and ensuring that businessmen—whether from within our shores or from foreign enterprises such as yours—are met with a level playing field,” he said.
It remains to be seen whether economic sweeteners can help bring calm to the South China Sea. The Philippine government has accused China of several incursions this year in waters it claims, and announced it was renaming the body of water the West Philippine Sea. China’s growing naval strength, including the launching of its first aircraft carrier this month, has unsettled some of its Asian neighbors. Vietnam and the Philippines have recently added warships to their significantly smaller fleets and are shopping for more military hardware, the Associated Press reported last week.
Aquino was expected to raise the territorial disputes in his talks Wednesday afternoon with Chinese President Hu Jintao, Philippine press reported, but no breakthroughs were expected. As Aquino was heading for China some Philippine lawmakers were warning that he not be seen as retreating on territorial claims in exchange for Chinese investment.
Beyond trade, the two sides have another avenue that could help lessen animosity. On Saturday Aquino will visit Hongjian village in coastal Fujian province, the South China Morning Post reports (behind paywall). The village was home to one of the president’s ancestors who left for the Philippines in 1861. Aquino’s mother, late Philippine president and democratic icon Corazon Aquino, visited the village in 1988 and planted a tree. If money can’t ease tensions, perhaps shared kinship can.
