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China, Philippines agree on cooling tensions, boosting trade

January 5, 2023

Philippine President Ferdinand Marcos Jr. is visiting Beijing to seek better economic ties with China despite continued tension over territorial disputes in the South China Sea.

Philippine President Ferdinand Marcos Jr. and Chinese President Xi Jinping walk after the welcome ceremony.
China and Philippines agreed on boosting trade and territorial integrityImage: Shen Hong/Xinhua/picture alliance

Philippine President Ferdinand Marcos Jr.is currently on a three-day visit to Beijing, seeking to improve ties with China after taking office in June. 

On Thursday, the two countries released a joint statement spelling out 14 agreements aimed at cooling security tensions and boosting economic cooperation.

Tensions center on China's expansive maritime claims in the South China Sea, where China's navy and coast guard are accused of encroaching on waters claimed by the Philippines, including denying access to Filipino fishing boats.

Despite a 2016 ruling rejecting China's expansive claims in the South China Sea, Beijing has increased its presence by building military installations on reefs and atolls, and sending out fishing vessels into waters claimed by other countries. 

China's official Xinhua reported that both sides "agreed to handle maritime issues properly through friendly consultation.

Marcos said in a video address that both sides discussed "what we can do to move forward, to avoid possible mistakes, misunderstandings that could trigger a bigger problem than what we already have.''

A Chinese coast gaurd ship sails near a Philippine coast gaurd ship in the South China Sea.
China and Philippines have had long standing disputes over the strategic South China SeaImage: Philippine Coast Guard/AP/picture alliance

Putting business first 

China accounts for 20% of the Philippines' foreign trade and is also a major source of foreign direct investment. After the meeting, Beijing agreed to increase imports and aim for bilateral trade to exceed pre-pandemic volume.

The two countries vowed to boost tourist numbers and flights between Beijing and Manila. Last year, the Philippines saw only about 9,500 Chinese tourists as opposed to the 1.6 million before the pandemic.

Talks on oil and gas exploration in the South China Sea, solar, wind, electric vehicles and nuclear power, are all slated to resume soon, Xinhua reported.

President Xi Jinping also promised China will assist the Philippines in agriculture and rural development, infrastructure and connectivity projects through billions of dollars worth of investment.

South China Sea tensions 

China and the Philippines reiterated the importance of respecting each other's sovereignty and territorial integrity, and have pledged to hold an annual security dialogue, according to the statement.

However,  disputes linger over islands and waters in the strategic South China Sea, which is rich in oil, gas and fishery resources. The sea has been almost entirely claimed by Beijing.

The Philippines has raised concerns over Chinese construction activities and the crowding of Beijing's vessels in the disputed waters.

Coastguards from both sides are slated to meet "as soon as possible" and discuss "pragmatic cooperation," the statement said.

In a video message, Macros said he argued on behalf of the Filipino fishermen who were denied access by China to the disputed areas of the sea.

He added President Xi "promised that we would find a compromise and find a solution that will be beneficial so that our fishermen might be able to fish again in their natural fishing grounds."

ns/wmr (Reuters, AP)