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Rommel C. Banlaoi
China and the Philippines will reach 45 years of diplomatic relations in June 2020. Like many other relationships, the relationship between the Philippines and China has had ups and downs. However, the two countries remain friends as the permanent neighbors they have been for many centuries.
Normalization Period
Since 1975, the Philippines has been pursuing a policy of maintaining friendly ties with China. The Philippine government recognized the importance of cooperating with China to ensure national survival during the Cold War while at the same time working with the United States as a security ally.
In 1975, the Philippines and China established diplomatic ties. The two countries enjoyed a normalization period in which they introduced numerous bilateral cooperation projects covering a broad range of areas including trade, investment, tourism, air travel, cultural exchange, scientific cooperation, agricultural development, taxation, logistics and even the military. They also became important trade partners in Asia. The bilateral trade volume spiked from US$20 million in 1974 to US$300 million in 1984, making China the Philippines’ sixth largest trading partner.
China began economic reforms by opening up to the world in 1978. The Philippines has benefited from this opening up policy through improvements in trade, investment, and tourism relations.
The Philippine government sustained its friendship with China throughout the 1980s despite its long-standing security alliance with the United States. But in the late 1980s, the Philippines-China relationship faced pressure from the arduous process of democratic restoration in the Philippines and the fall of the Berlin Wall. The end of the Cold War marked a difficult period for Philippines-China relations as both countries recalibrated their respective security interests for the post-Cold-War era.
Yet, the countries committed to remaining friendly not only at the government-to-government level but even more at the people-to-people level. The Philippine government intensified economic, cultural and educational exchanges with China and fostered closer relationships among non-governmental organizations. When President Aquino visited China in April 1988, she acknowledged roots in Fuijian Province where her ancestors originated. She even stressed the ancient origins of Philippines-China relations and the continuous and unbroken friendship.
Troubled Ties
In 1992, China passed the Law on Territorial Sea and Contiguous Zone which created security anxiety for some in the Philippines.
To address the situation, President Ramos visited China in 1993 to expand economic relations and manage territorial disputes with China. Ramos sought to improve economic ties with China to overcome political differences on the South China Sea.
In 1995, the Philippines and China signed a document titled Joint Statement on Philippines-China Consultations on the South China Sea and on other Areas of Cooperation to emphasize the need for bilateral consultation and cooperation to peacefully manage any conflict. Both sides agreed that bilateral cooperation would overpower potential bilateral conflict.
Despite the dispute on the South China Sea, the greater trade and investment relationship between the two countries improved. From a trade volume of US$457 million in 1994, it increased to US$1,306 million by the end of 1995—a 185.78 percent increase in just one year. Even Filipino-Chinese businesspeople were encouraged to invest in China despite any political problems in the South China Sea. The troubled political relations in the South China Sea hardly affected the consistently solid economic relations between the two countries.
Golden Age
The turn of the 21st Century brought Philippines-China relations into a golden age.
In May 2000, President Estrada visited China. During his visit, both sides signed Framework of Bilateral Cooperation in the Twenty-First Century. This elevated the Philippines-China relations to a higher plane.
At the regional level, China improved its relations with members of ASEAN when they signed the Declaration on the Conduct (DOC) of Parties in the South China Sea in 2002. The DOC aims to foster cooperation and avoid conflict in the South China Sea. In 2005, Chinese President Hu Jintao visited the Philippines, and both countries agreed to set aside the territorial dispute in favor of economic cooperation and joint development.
In 2007, the Philippines and China reached another new high in terms of trade when volume reached US$30.6 billion. In 2010, China became the Philippines’ third largest trading partner and the greatest provider of Official Development Assistance (ODA) to the Philippines. From 2001 to 2010, China committed a loan of US$1.3 billion to the Philippines and signed 65 agreements covering broad areas of cooperation.
Lowest Moment
Sadly, Philippines-China relations severely deteriorated after 2012. The Scarborough Shoal standoff in 2012 and the subsequent filing of an arbitration case by the Philippines against China in 2013 led to worsening of bilateral ties.
Those years were the lowest in recent memory for Philippines-China relations. Investment and trade relations severely declined. Official channels of communication were practically cut off. It was a dark period for bilateral ties.
Such Great Heights
There is always a rainbow after the rain. When President Rodrigo Roa Duterte took office in 2016, the Philippines and China turned the page to a new era of closer friendship. President Duterte’s policy of paradigm shift to China ushered in the new age of cooperation between the two countries. When President Xi Jinping visited the Philippines in 2018, the two countries decided to establish the relationship of comprehensive strategic cooperation, representing a rapid rebound of bilateral ties.
Today, the Philippines and China are enjoying their best bilateral relations. China has been the Philippines’ top trading partner and the largest source of imports since 2017. In 2018, bilateral trade volume reached US$56 billion. China has become the Philippines’ largest source of foreign investment, with at least US$67 million in 2018. China has become the Philippines’ second largest source of foreign tourists, with 1.7 million visits in 2019. China has become the Philippines’ largest source of foreign assistance to support infrastructure projects promoted by President Duterte under the “Build, Build, Build” program. China reportedly committed US$24 billion worth of investment and infrastructure project pledges to the Philippines when President Duterte visited Beijing in 2016. China is now the Philippines’ third largest export destination and the largest export market for Philippine bananas.
Politically, the Philippine government made a landmark decision in 2018 when it entered into an agreement with China to jointly develop oil and natural gas resources in the South China Sea. The two countries worked together to launch the Bilateral Consultative Mechanism in the South China Sea (BCM) in 2017 to peacefully manage their territorial disputes. The two countries held their 5th BCM meeting at the end of 2019. The mechanism has resulted in bilateral commitments to pursue joint marine environmental protection, joint search and rescue operations, and joint fishery management in the South China Sea.
After 45 years, the Philippines and China have traveled an incredible distance together. Despite ups and downs, the two countries remain committed to maintaining friendship for years to come. Deepening this friendship and broadening cooperation are the current and future direction of Philippines-China relations.
About the author Dr. Rommel C. Banlaoi is president of the Philippine Association for Chinese Studies and chairman of the Philippine Institute for Peace, Violence and Terrorism Research.
Manila workers assemble a light rail train delivered by China Railway Rolling Stock Corporation (CRRC) Dalian Co., Ltd. on January 16, 2017.
The bilateral trade volume spiked from US$20 million in 1974 to US$300 million in 1984, making China the Philippines’ sixth largest trading partner.
From a trade volume of US$457 million in 1994, it increased to US$1,306 million by the end of 1995—a 185.78 percent increase in just one year.