China and the Philippines: “Pivot to China” Despite South China Sea Tensions?

According to Pew Research Center data, over 90% of those who live in the Philippines are worried that tensions around geopolitical hot spots such as the South China Sea between China and its neighbors could lead to a military confrontation. And, indeed, the Philippines is a significant variable in the South China Sea equation, with the authorities being less than thrilled about the fact that China continues to maintain artificial islands in the exclusive economic zone of the Philippines.

Despite this state of affairs, however, president Rodrigo Duterte made it quite clear that:

1. The Philippines is pivoting away from the United States
2. The Philippines is pivoting strongly toward China, with Russian ties also representing a priority

Some analysts find this pivot peculiar in light of the fact that while trade with China is without a doubt vital, China is not the #1 trading partner of the Philippines, it only occupies position #2. The number one trading partner of the Philippines is Japan, with the United States being its third trading partner. In other words, the other geopolitical “axis” continues to remain more significant from a trade volume perspective.

Then there is also the Hong Kong perspective. For example, only roughly 10% of exports end up finding their way to mainland China, with more than that heading toward Hong Kong. Comparatively, 43% of Filipino exports tend to head toward the Japan, United States and Singapore trio (with Singapore being the number four trading partner of the Philippines). Import-wise, the Philippines is in no way dependent on China, with only approximately 16% of its imports coming from the direction of China, compared to approximately 50% which come from the US axis.

The same way, cultural ties between the Philippines and Hong Kong tend to be quite a bit stronger than those between the Philippines and China, with approximately one hundred times more Filipinos being located in Hong Kong than in China at this point in time.

Militarily speaking, the same principle is valid with respect to the Chinese component of the equation being less than dominant. Frankly, the Philippine armed forces have quite a bit more experience when it comes to working with their US counterparts than as far as Chinese cooperation is concerned.

As far as Russia is concerned, we are looking at a trading partner who does not even account for 1% of the trading volume the Philippines boasts. This doesn’t mean there is no potential whatsoever associated with Russia, it simply means that at this point in time, a pivot toward an insignificant trading partner seems… well, confusing.

Why, then, has Duterte chosen this approach?

A few possible reasons include:

1. The fact that the United States are backing out of foreign involvement in general and foreign investments in particular, compared to a China which is making it clear that it has every intention to continue “buying” geopolitical influence through primarily infrastructure-oriented investments. As an eloquent example, the US saying no to the Trans-Pacific Partnership speaks for itself
2. Duterte being more interested in his domestic campaigns such as the aggressive war on drug trade than in the international dimension. As far as his very aggressive (to the point of extreme violence) anti-drug campaign is concerned, the West has condemned the human rights violations that have taken place very firmly, whereas China has proven to be supportive, something which can definitely be considered a geopolitical selling point from the perspective of Duterte
3. The pivot to China and to a lesser degree Russia not actually being a pivot from one geopolitical bloc to another but rather a pivot toward independence. A state of affairs China and Russia have no issues whatsoever with because it aligns with their goal of “selling” the idea that the world is now multi-polar rather than US-centric. From that perspective, a pivot toward independence can be considered (almost) as important as a pivot toward the China-Russia axis
4. A miscalculation, plain and simple, with Duterte allowing his animosity toward the proverbial West to lead him to decisions which are sub-optimal at best from an economic as well as military and geopolitical perspective

To conclude, is pivoting toward China a wise idea or will it prove to be a gesture that only alienated the West further, while stripping the Philippines of the little leverage it had in the first place when it comes to China? While it can be both fascinating and entertaining to speculate, time will ultimately tell. What we do know is that despite tensions with respect to the South China Sea persisting, this pivot is without a doubt manifesting itself.

As time passes, we will be able to gather more (economic but not exclusively economic) data and assess the effectiveness of this strategy… or lack thereof. To stay on top of geopolitical developments that revolve around China, we would strongly recommend bookmarking ChinaFund.com and developing the habit of reading our articles on a regular basis. Should you have more specific concerns that we can address, visit the Consulting section of ChinaFund.com to find out how we can be of assistance or simply get in touch by heading over to the Contact page of our website.