Working with China

On the surface it would seem a reasonable response. If China had made maps that included the disputed islands in Spratlys, the Philippines is right to object. It was in turn called a trouble- maker by China.

This childish exchange could have been avoided. It comes from a misguided policy and will continue until both countries agree on how to tackle the substance of the dispute. This column has consistently supported the Deng Xiaoping formula to work together now and leave settling of the dispute to the next generation.

China will continue to taunt and the Philippines will continue to respond but this is playing children’s games in a playground. Both are losers. China is portrayed as a bully while the Philippines as hopelessly amateur and incompetent which is neither.

What’s in a map? It does not give ownership to whatever is put in it and certainly not with territorial dispute. It is my personal opinion that the Philippines would have done better if it ignored the map. The dispute remains whatever is put in maps or not.

A more intelligent diplomatic approach to the Spratlys problem has to be pursued by the Aquino administration. It is not helped by hostile tit for tat.

At the heart of the problem is a difference on how to settle the dispute. China wants it settled bilaterally. The Philippines insists that the problem be brought before the Unclos (the United Nations Convention on the Law of the Sea).

The law puts down 200 nautical miles as the exclusive economic zone of countries. Under that law, Philippines is the only country that could explore or acquire maritime features, according to the DFA. Unclos merely arbitrates when both parties agree to bring the dispute before it. But China refuses to bring the dispute to Unclos and until it does then there is nothing to settle about. (As a parenthetical note, the US is not a signatory to Unclos.)

Because of the stalemate, there will be continuous carping and skirmishes in the disputed area. “It is normal practice for a sovereign state to patrol its territorial waters. Instead of feeling uncomfortable about it, Manila had better get used to it,” China Daily said.

* * * In the background of the dispute with China is the presumption that the US will be at its side when the shooting begins. But recently the US made it clear that although it has its own concerns regarding China’s growing power in the region, it must not be interpreted as in any way belligerent and should not mislead its allies into thinking that it intends to go to war to settle disputes. It was a pointed remark directed to the Philippines. Short of US coming to its rescue, the Philippines is not in any position to challenge China even with a belated decision to be more militarily prepared.

The US is not going to sacrifice its own interests for the sake of a weak ally. Some press reports have made it appear that the US may be on a double take, keeping friendly and close relations with China while encouraging countries like the Philippines and Vietnam to do the fighting for them.

But beyond this difficult and complex situation is the economic reality that while the American economy is on the decline, China continues its upward climb.

Economists have long predicted the diminution of American economy and the rise of China’s and India’s. The onus is on the US to do its best to postpone if not halt that decline but even with the best intentions that seems to be less and less possible. It will have to learn to live in a multipolar world and that is not a bad thing.

The Philippines must be ever conscious of that possibility and how to manage its relations with both countries. Its present approach will not work if it does not recognize the facts.

“The Chinese economy would become the world’s largest economy in 2016 in real terms, taking into consideration expected changes in currency rates by that time,” says the IMF itself.

The Organization for Economic Cooperation and Development, agrees with the IMF. It forecasts that “China’s economy would be larger than the combined economies of the Eurozone countries by the end of this year, and will overtake the US by the end of 2016.”

* * * British author Martin Jacques who was here in Manila on the invitation of the Philippine Futuristic Society to deliver a lecture entitled “When China Rules,” said pretty much the same thing.

“The fact remains that US power has been steadily receding and that of China remorselessly rising: there will be no return to the status quo ante when the US dominated the region.”

The Philippines, because of its misplaced policies has not taken advantage of China’s rise as other countries in the region have. Jacques cites that “just before Obama’s visit to Indonesia in 2010, it was announced that China would invest $6.6 billion in urgently needed infrastructure developments: this is the power of the Chinese purse. It will continue to grow apace and the US will be increasingly unable to match it.”

“Although the ASEAN countries are in varying degrees concerned about the rise of China, and several might be prepared to encourage the US to play a balancing role, none see a declining America as an alternative to the most dynamic economy in the world: they are very aware that China is the future of their region and that their relationship with it must take increasing priority over that of the United States. “Good advice.

* * * From the Instituto Cervantes comes this invitation to a forum “HAY SALIDA? Is There a Way Out? The Global Economy Today”. It will focus on the current situation of the European and Spanish fiscal crisis. It will be held on Jan. 22, at 6 p.m. in the Salón de Actos of Instituto Cervantes.

Participating are Spanish economists Mr. Juan L. Gómez and Mr. Luis Cañete. The forum will be moderated by the Economic and Commercial Counsellor of Spain in the Philippines, Mr. Enrique Feás. Where exactly is the global economy headed? The same question applies to the Spanish economy. What are the necessary measures for both to overcome the crisis they are currently facing?

Three Spanish economists will discuss the state of the global and the Spanish economy today.

It is good for the Instituto Cervantes to take on economic issues as well because there are thousands of Filipinos working in Spain. Admission is free on a first come, first served basis.