Philippines' Duterte agrees to work with China on economic projects

By Elizabeth Shim   |   Nov. 20, 2018 at 11:27 AM
Chinese President Xi Jinping (L) shakes hands with Philippines' President Rodrigo Duterte (R) after a guest book signing at the Malacanang Presidential Palace in Manila, Philippines, on Tuesday. Photo by Mark R. Cristino/EPA-EFE

Nov. 20 (UPI) -- Chinese President Xi Jinping and Philippine President Rodrigo Duterte have agreed to work together on oil and gas exploration and cooperate on infrastructure projects -- as Beijing continues to defend the militarization of islands in the South China Sea.

In a sign the two countries are moving closer together as tensions increase between China and the United States, Beijing said its state-owned China National Offshore Oil Corporation would take up joint exploration in "relevant sea areas" of the South China Sea, CNN reported.

Xi met with Duterte in Manila on Tuesday for the start of a two-day visit. The two sides announced 29 agreements as Duterte takes a pragmatic approach to his neighbor. Others in the Philippines protested the Xi visit.

According to CNN Philippines, the protesters displayed caricatures of the Chinese president while opposing the construction of Chinese bases in the South China Sea and Chinese-led projects under its "One Belt, One Road" initiative.

Many of the economic deals the Philippines signed with China are to Beijing's advantage, said one Philippine analyst.

"They create massive economic and political leverage in favor of China against the Philippines, such that it will be difficult for any administration in the future to make decisions completely independently and free of China's influence," said Jay Batongbacal, director of the Institute for Maritime Affairs and Law of the Sea at the University of the Philippines, according to the Financial Times.

At the annual APEC summit in Papua New Guinea over the weekend, U.S. Vice President Mike Pence voiced similar concerns.

"The terms of [Chinese] loans are often opaque at best," Pence had said. "Projects they support are often unsustainable and of poor quality. Too often, they come with strings attached and lead to staggering debt...The United States deals openly, fairly. We do not offer a constricting belt or a one-way road."

Chinese businesses continue to expand in the Philippines, however.

The Financial Times reported Sunday China Gezhouba Group is to develop 500 hectares of a former U.S. military site, Clark Air Base, through a massive $2 billion investment.

A memorandum of understanding would be signed this week, Philippine authorities said.

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