Navigating the minefield of President Duterte’s pivot to China
The episode in the popular TV show ‘Madam Secretary’ aired on CBS network on March 12, 2017, depicted a fictional Philippine president whose pivot to China alarmed U.S. leaders to the point that the ‘Secretary of State’ made a visit to the ‘President’ to dissuade him with an offer of more military aid to bolster his personal ambition. Instead of taking on the offer, the fictional president sexually harassed the secretary who, in return, punched his face bloody. The secretary was quickly escorted out of the country and U.S. officials mulled the option of removing him through a military coup, if not by assassination. But none of these options were pursued when U.S. officials uncovered a scandal that they used to blackmail the president into submission.
Although the episode was fictionalized it became controversial because of some striking similarities with the current political situation in the country. Some conspiracy theorists pointed to the possibility that U.S. officials might have influenced the TV production as part of a destabilization plot against Duterte. Indeed, President Duterte’s pivot to China is stirring a hornet’s nest and the ongoing debate on its ramifications to the country, and to the international community, has been divisive and intense.
Expectedly some administration officials are quick to heap praise on Duterte’s action pointing out to the commitment of billions of dollars in economic assistance and trade agreements that he brought home after his recent visit to China. On the other hand, many, including this writer Yvonne, viewed his action with skepticism and believe that it will not reap benefits for the Philippines beyond what can be expected historically from its foreign relation with China without the pivot. And overall, it may be less than a zero sum equation.
As one of the superpowers, China (or should I say Beijing?) is a major player in international political arena and is very adept at playing political poker. Duterte is gravely mistaken if he thought China would shower the Philippines, or him for that matter, with special accommodations in exchange for his pivot or open-arm embracing of China. Beijing has a very good read on the psyche of Filipino politicians and knows which buttons to push for the likes of Arroyo, Binay, and now with Duterte, to get the most advantage for China to the detriment of others. The fondness of Beijing’s for Arroyo when she was president, and for Binay when he was a leading presidential candidate, are classic examples on how expertly the Chinese leaders play their hands.
What his supporters hyped as Duterte’s successful trip to China is actually a big disappointment in that he did not come home with economic aid in exchange for his pivot. What he got are commitments for a loan package (not aid package) and trade agreements that are likely to be onerous. The loan package is likely to contain preferential covenants for the purchase of Chinese products and services absent competitive biddings. And the trade agreements are likely lopsided in favor of Chinese companies.
According to analysts, China typically requires counterpart financing from the borrowing country in the range of 20% to 50% of her loan commitments. The loans are also tied to having access to a range of natural resources – oil, farm, fisheries, and metals – from the borrowing country with Chinese companies getting separate juicy contracts to extract those natural resources. Thus, it is not surprising, but alarming, that the Duterte administration has not made public any details and conditions for the Chinese loan commitments and trade agreements.
On the other hand, the Philippines will lose a significant amount of U.S. aid in return. As reported in the press, the U.S. decided to defer economic aid to the Philippines until such time that the country is able to “demonstrate a commitment to just and democratic governance, investments in its people and economic freedom.” The previous aid package to the Philippines was a substantial amount of $434 million. Of course, the U.S. used diplomatic language to express its dismay with the pivot just like when President Obama diplomatically described Duterte simply as a “colorful guy” in response to the latter’s obscenity-laden rant against the former U.S. president.
Beijing is likely to view its new political relationship with Duterte with extreme caution and skepticism due to his fickle-mindedness, volatile temperament and lack of coherent foreign policy. His pivot to China is one of political expediency and not rooted on nationalistic ground and principles – thus it is bound to be short-lived as is shown in the sudden and unexplained cancellation of a Chinese commerce minister’s visit to the Philippines last month to sign some 40 joint projects worth billions of dollars.
If anything, Duterte’s pivot provided Beijing with a timely face-saving opportunity to deescalate the heightened tension in the South China Sea. Many political analysts viewed China’s flexing of military muscles in Southeast Asia as maybe intended to arouse nationalistic fervor among the Chinese to divert their attention from the worsening economic situations at home, the escalating citizen’s demand for government openness, and from the increasing political unrest in Tibet.
Is spite of its being the second largest economy in the world today, China is in broad economic turmoil due to its slowing economy and overextended financial burden. It will be recalled that the worsening economic problems in China caused a near meltdown of the world financial markets some two years ago. And President Trump’s protectionist stance and efforts to bring jobs back to the U.S. will only make things more difficult for the Chinese economy. For example, Jack Ma, founder and chairman of Alibaba, a leading Chinese company, committed to help President Trump create one million jobs in the U.S. in the next five years. Although Jack Ma’s commitment is highly unrealistic, it highlights the effect of Trump’s new policy of taking jobs back to the U.S. to the detriment of China.
While Duterte extended his open arms with China he showed a willingness to do the same with Russia. It can be assumed that Beijing is aware of Duterte’s political gambit to play the U.S., the Chinese, and the Russian cards to his advantage, reminiscent of how martial law dictator Ferdinand Marcos skillfully played the Russian card to keep President Reagan’s support of the Marcos dictatorship going. It seems like Duterte is following the Marcos playbook (including his threat lately to impose martial law) but Duterte is a political novice that can easily be the one to fall into Beijing’s own political gambit.
A political novice himself, Pres. Trump created a diplomatic breach when he called Taiwan’s President Tsai Ing-wen, essentially brushing aside the U.S. one-China policy. The resulting international uproar forced Pres. Trump to do an about-face and issue a statement confirming his administration’s commitment to the U.S. one-China policy. Is the about-face connected with the unexplained cancellation of the Chinese commerce minister’s visit to the Philippines, a sort of ‘let’s keep the status quo’ message?
What about the Chinese minister’s abrupt cancellation of visit to the Philippines? Was it an attempt to keep Duterte in check and prevent him from getting too bigheaded? Or was it due to his administration’s failure to come up with counterpart funding for the Chinese loan commitments?
To be sure, China’s flexing of military muscles is a threat not only to her neighboring countries, and the U.S., but it is problematic to China as well because of the groundswell of defensive response to China’s military provocation. There is already an increasing clamor in Japan to amend its Constitution to allow for the creation of an offensive capability to its armed forces. In India, a country with nuclear arsenal, the government is accelerating the upgrade of its military capability using its sophisticated railways system should there be a disruption of passage through the South China Sea. And Vietnam, a country with proud history of standing up against superpowers, has shown an increasing willingness to engage the Chinese in armed skirmishes.
On the other hand, the Trump administration has just made public its proposed federal budget for the next year that includes a very substantial increase in military and defense spending, partly in response to China’s flexing of power in Southeast Asia.
Will China respond in kind to the U.S. increase in military spending next year? Highly unlikely because of the strain it will cause on her already slowing economy and overextended financial burden. In fact, China reduced its military spending last year after years of increasing military budget. Consider, for instance, that her newest aircraft carrier, the Liaoning, is not entirely new but a refurbished Soviet carrier Varyag. This reminds us of Pres. Reagan’s very expensive star wars defense program – it was designed to bankrupt the Russian economy if the Russians attempted to match the initiative.
Of late there have been reports of armed military installations in the Chinese reclaimed islands in South China Sea. While these are matters that are of serious international concern, some analysts believe that the installations have limited military capability because the Chinese would not be folly enough to expose their highly guarded military secrets to U.S. eavesdropping. The U.S. can always invoke its right to safe passage to make close-by navigation runs, overhead and underwater, for military intelligence gathering activities.
And will China pull back its military capability and exercise restraint simply because of Duterte’s pivot? It is highly unlikely. According to U.S. congressional report, “China still maintains intermediate range nuclear missiles, DF-21s and possibly DF-3s, at its Lianxiwang Launch Complex. Originally these were targeted at U.S. military forces in the Philippines, but China’s missiles have remained pointed at Filipinos long after the departure of U.S. forces. The anti-ship ballistic missile of People’s Liberation Army Navy has extended its attack range to the Philippines.”
According to the US Navy’s unclassified intelligence assessment report, “the introduction of long-range anti-ship cruise missiles (ASCM), non-PLA(N) weapons such as the DF-21D anti-ship ballistic missile (ASBM), and the requisite Command, Control, Communications, Computers, Intelligence Surveillance and Reconnaissance (C4ISR) architecture to provide targeting data will allow China to expand its combat capability further into the Philippine and South China Seas”.
To be sure, many professional military insiders in the Duterte administration do not share Duterte’s seeming belief that a pivot to China woud result in benefits to the Philippines more significant than without the pivot. Could it be that Duterte’s public pronouncement of newly found friendship with Beijing is just a smoke screen to appease his major political donors and supporters? Why, for instance, were Bongbong and Imee Marcos part of the Duterte entourage to China when they are not cabinet members and have no known businesses that would potentially benefit from a Chinese connection? Is it payback time for the Floirendos, and the Lagdameos, the banana magnates from Davao whose biggest export market is China?
On the other hand, in spite of Duterte’s public pronouncement of distancing from the U.S., his administration continues to seek U.S. military assistance quietly. This includes a request for the sale of two AN/SPS–77 Sea Giraffe 3D Air Search Radars, support services, including installation, operator training, and system operational testing, with a total estimated cost of $25 million. “The AN/SPS–77 Air Search Radars will be used to provide an enhanced ability to detect and track air contacts. The radars will be installed on two Hamilton-class cutters acquired through the Excess Defense Articles (EDA) program.” As of last month the U.S. Congress was still deliberating approval of this request.
Additionally, although the proposed sale of 26,000 assault rifles to the Philippine National Police was halted while still in the pre-notification process, the U.S. State Department, upon the request of the Duterte administration, is considering a proposal to send $1.9 million worth of barrel blanks for the manufacture of small arms in the Philippines.
These requests for U.S. assistance to beef up the Philippine military and police capabilities do not look like distancing from the U.S. So is Duterte’s public pronouncement of pivot to China, coupled with severing military ties with the U.S., for real? Or, are these posturing just for public consumption? Or, as some of his apologists would say it, “the President is only joking?”
There is no doubt that it is in China’s own interest to deescalate the tension in South China Sea and to dial down the political rhetoric. Duterte’s pivot to China may have just given Beijing the pawn it needs in its game of political chess with the U.S. And in any game of chess, the pawn can easily be sacrificed.