China seen wielding economic clout in standoff with Philippines

MANILA, Philippines—It won’t be surprising if China wields its economic clout to soften the Philippine claim to the Scarborough Shoal, political analyst Bobby Tuazon said Friday.

Beijing committed 40 development projects for Manila at the beginning of the Aquino administration and could use this as leverage in the standoff, said Tuazon, who teaches political science at the UP Manila College of Arts and Sciences.

“China will use its economic leverage to at least neutralize the Philippines and soften its assertiveness in the territorial claims,” he said in an interview at the Center for People Empowerment in Governance (CenPEG) in UP Diliman where he serves as director.

After a five-day state visit to China in September 2011, President Benigno Aquino announced nearly $13 billion worth of actual and planned Chinese investments in the Philippines.

During the visit, Aquino invited Beijing to invest some of its $10-trillion surplus capital in Manila, which Filipino-Chinese businessmen expected would put their trade relations into high gear, Tuazon said.

All the potential gains, however, could go down the drain because of the escalating standoff over Scarborough Shoal, locally called Panatag Shoal, he said.

“This standoff threatens to suspend, or worse, retard the economic relations. It will prompt China to look elsewhere… for other Southeast Asian countries where there are less territorial disputes, like Indonesia, Malaysia or Japan,’’ he said.

Aquino said last year that Philippine foreign direct investments in China totaled $2.8 billion, five times more than Chinese investments in the Philippines of $500 million.

Tuazon also expressed doubt  that the United States would offer similar investments, much more go to war with China over the disputed Spratly Islands.

“Will the US replenish whatever economic losses that P-Noy will get as a result of this strong assertive policy? I don’t think the US will supply that. Of course, it will supply that in terms of military forces, or military aid,” he said.

US officials’ pronouncements about protecting Philippine sovereignty were plain rhetoric, Tuazon said.

“The United States will not go to war with China. They have a bigger economic stake in China,’’ he said.

By engaging Philippine forces in joint military exercises Balikatan, the American forces were merely showcasing their arms, and stood to gain more in training for their eventual deployment in conflict-torn countries such as Afghanistan, he said.

“They just want to get short-term benefits from the tensions that are now emerging in the South China Sea…. In the final analysis, Balikatan will be to the bigger benefit of the US arms industry,” he said.