United States-China Competition in the Philippines in the Context of a New World Order

บทคัดย่อ

THE POLICY OF THE PHILIPPINES TOWARDS THE US AND CHINA IN A CHANGING WORLD ORDER (2001-2021)

Tran Thai Bao, Ph.D Student

University of Sciences - Hue University

Nguyen Thi Phuong Thao,MA

Duy Tan University

Abstract. China and the Philippines share a long history together. This relationship has grown and achieved significant milestones despite numerous ups and downs. China's growth began in 2010, when it overtook Japan to become the world's second largest economy after the United States. This has piqued the interest of countries in the region seeking development possibilities from China. Furthermore, in order to accomplish a great power's strategic ambitions in the twenty-first century, China must set strong goals, with the economy serving as the driving force behind all of its development operations. And the Philippines, a neighbouring country with many characteristics that coincide with China's political, economic, and diplomatic goals, has emerged as a key player in China's rise. When it comes to implementing the policy of greater ties with China, the Philippines can't ignore the US influence. Because the Philippines is one of the US's Asian allies, with Japan, South Korea, and Australia, and is a driving force behind the US's policy of growing US dominance in the Asia-Pacific region. This article will focus on studying the impacts of the US on China and the Philippines, as well as the progress of the Philippines - China relations in many fields, with the focus being politics - diplomacy, and economy and security - defence in the first two decades of the 21st century.

Keywords. The US, China, Philippines, 21st Century, International Relations.

1. The adjustment of the Philippines' policy strategy in light of changes to the world order.
   • Changes in the world order

One of the nations most impacted by the ongoing regional order reorganization is the Philippines. The Philippines was once a disappointing ally of the United States when it decided to close its military base on its territory in 1991. However, in 2009–2010, China increased military pressure in the South China Sea, forcing the Philippines to re-warm its traditional relations with the United States. Contrary to China's expectations at the time, the Philippines' government and populace responded harshly to China's aggressive behaviour, which boosted morale. Since colonial times, ethnicity has been a simmering issue in Philippine society; as a result, President B. Aquino chose to take China to the International Court of Arbitration. The changing regional power structure resulting from the relative decline of US power globally and the strong rise of China has caused the Philippines to adjust its policy to accommodate A new regional order is taking shape.

After the end of the cold war, the United States took on many advantages and ambitions to establish a unipolar world. However, when entering the early years of the 21st century, the multipolar trend has begun to take shape and develop continuously. The world economic structure began to shift from West to East. A typical example of this process is the rise of China, rising to become the world's second economy after the United States. Besides, many other countries have increasingly played and dominated the power in international relations like Japan. Although after 2010, Japan's economy ranked third in the world, Japan is still an economic power, one of the economic and political centers of the Asia-Pacific region; its role and voice are still strong on the political chessboard.  In addition, many countries that are holding growth rates far beyond the global growth rates such as India, Korea, and Singapore are also among the factors that changed the world situation in the first twenty years of the 21st century.

The development trend of globalization has made relations between countries progress in two directions, both cooperation and competition, creating interdependence^[1]. On the other hand, the issues of globalization, traditional and non-traditional security are complicated, opportunities are overlapping with challenges, and big countries not only strengthen cooperation but also compete fiercely and directly and cracks many relationships in the international relations system, especially China and the US. Therefore, a reasonable approach to minimize risks and negatives from the trend of globalization also poses many problems for governments of countries to make foreign policy guidelines in line with the trend of development of the world, especially in the context of changes in the US order in the international arena.

When entering the 21st century, countries, large or small, have begun to make moves to adjust their international cooperation strategies, adjust foreign policies to match the development process of human history in the new era. It is the peaceful international relations that have helped countries link together and cooperate for economic development. Thus, it shows that the new world is no longer formed by an imposition of any national interest or group, but consensus, recognition, respect for freedom, democracy, peace, and prosperity is the foundation of the world in the new context^[2]. In that flow, the Philippines is one of the pioneering countries in adjusting foreign policies to strengthen international integration cooperation, especially with China and the US  when entering the early years of the 21st century.

Facing the new context of the world situation, when entering the 21st century, inter-continental organizations such as ASEM and APEC have constantly consolidated and improved the content of cooperation in order to promote countries to increase their economic development. ASEM, also known as the Asia-Europe Meeting, is an informal forum for dialogue and cooperation, bringing together 53 partners from across Europe and Asia^[3]. Its main purpose is to promote political dialogue, strengthen economic cooperation and solve problems of a global nature. ASEM has continuously expanded the cooperative organization structure to increase the number of members to 53 countries, continuing to play the role of a bridge organization for cooperation between the two continents Europe - Asia. Meanwhile, the Asia-Pacific Economic Cooperation (APEC) is a regional economic forum established in 1989 to promote Asia-Pacific's growing interdependence.

At the regional level, ASEAN has also made new developments, especially in building the ASEAN Economic Community (AEC) which is one of the three main pillars of the ASEAN Community established in December 2015. The remaining pillars are: Political-Security Community (APSC) and Socio-Cultural Community (ASCC). The objective of the ASEAN Economic Community is to enhance cooperation and economic development among ASEAN countries, namely i) Establishing a single market and common production base, ii) Building a competitive economy, iii) Balanced economic development, and iv) Integration into the global economy.

Thus, the strengthening of economic, political, socio-cultural security linkages between continents and regions through different cooperation mechanisms has created an important premise in inviting countries to join into the global economy. For small countries like the Philippines, it is also a good opportunity to affirm the country's position in the international arena. Besides, through economic cooperation forums, the Philippines can easily attract investment capital from other countries such as the US, China, Japan, and Korea. However, in order to be able to adapt to the rapid changes in the new world situation, the Philippines must "flexibly" adjust its foreign policy towards diversification and multilateralization, and actively participate in international events, deepening integration with developed countries, especially China and the US to promote economic growth and build infrastructure. From the above analysis, it can be seen that, in the constant movement of the world, and as a result of the process of globalization and international integration, the world is tending to move from the world order from super-multi-power to a multipolar world order.

1. The adjusting of the US strategy and the impacts on Philippine-US relations

2.1 Adjusting US strategy

The Philippine-American relationship dates back to 1898, when the Philippines joined the US against the Spanish colonialists, who had dominated the Philippines for more than 300 years. Control of the Philippines was given to the United States through the Treaty of Paris signed on December 19, 1898. With this treaty, the US will dominate the new colony of the Philippines, and from here the Philippines will become an important strategic area of ​​the US in the Asia-Pacific region.[4] The U.S.-Philippine relations are based on strong historical and cultural linkages and a shared commitment to democracy and human rights. After independence in 1946, the Philippines became a close ally of the United States. The 1951 U.S.-Philippines Mutual Defence Treaty provides a strong foundation for our robust post-World War II security partnership.  Strong people-to-people ties, and economic cooperation provide additional avenues to engage on a range of bilateral, regional, and global issues.[5]

     After the cold war ended, the US no longer paid much attention to Southeast Asia, and the Philippines, the US returned to isolationism, withdrawing its troops from two military bases in "Clark" and "Subic" (1992) which created a power vacuum in Southeast Asia. This has created conditions for China to increase its influence in the region through activities related to the East Sea. The moves to increase China's influence in the East Sea area have directly threatened the interests of the Philippines and challenged the US power in this area[6].  However, after the events of September 11, 2001, at the same time as launching the Global Counterterrorism Strategy, the United States implemented the policy of "Americanizing the world" to maintain hegemony based on the superiority of power[7]. With the goal of counter-terrorism becoming a top priority, the United States takes advantage of the problem of counter-terrorism and weapons of mass destruction to launch pre-emptive strategic attacks, exerting influence in various fields such as economy, trade, democracy by various measures. To accomplish this goal, the United States sent troops back to many key regions in the world, including Southeast Asia and the Philippines[8].

Since the Obama Administration took office, the Asia-Pacific rebalance strategy has served as the centrepieces of American efforts to change its foreign policy. Although this method has been the focus of intense debate ever since it was put into place, it has made some strides and unquestionably produced benefits. Most significantly, it has increased US strategic presence and influence in the Asia-Pacific area, putting some restraints on China's rise[9]. The military build-up with the Philippines to gradually deal with China's expansionist ambitions in the South China Sea has made the Philippines-US relationship stronger and stronger. In that context, the increasing influence of China in this region further worries the US side. In order not to lose its influential role in Southeast Asia, the United States has made it the second front in the global war on terrorism. The United States advocates “encouraging cooperation with partners in the region to undertake concerted efforts to corner, tighten, and isolate terrorist groups.[10]

Accordingly, the United States has implemented a series of bilateral and multilateral cooperation activities with ASEAN countries. In particular, the United States increased training and support for the Philippine military in combating armed insurgent groups. According to data from the Philippines, in 2001 the US aided the Philippines with 30.08 million USD, this number increased to 94.5 million USD in 2002 .These figures show the determination of the US side in carrying out the goal of fighting terrorism and other issues related to security in Southeast Asia. In order to tighten the relationship and domination of the United States in regional security issues, in 2003, the United States declared the Philippines to enjoy the status of a key ally outside of NATO.[11] From 2008 onwards, the US implemented the policy of pivoting to Asia, taking Asia - Pacific as the centre, the Philippines was increasingly focused. This is also the period when China has stepped up activities to strengthen and protect its claims in the South China Sea, which have threatened the oil and gas exploitation activities of US oil and gas companies, as well as the economic interests of the economy of the US.

2.2 The impacts on Philippine-US relations

2.2.1 Security-Political Relations

While promoting comprehensive cooperation with China, the Philippines still needs the alliance of the United States. Although relations with the US deteriorated in the last months of US President Obama's term, it was quickly "recovered" during the US President Donald Trump's era. The phone call between US President Donald Trump and Philippine President Rodrigo Duterte on April 29, 2017 was considered "very good" and the two countries' alliance relationship is on the right track.^[12] When Mr. Duterte met Mr. Trump in Manila in November 2017, the US side avoided criticizing the Philippine leader. Donald Trump seems to "turn a blind eye" to extrajudicial killings in Duterte's war on drugs. At the same time, Philippine President Duterte announced that the Philippines continued to cooperate and coordinate with the US after Donald Trump appointed new Secretary of State Mike Pompeo. This makes the relationship between the two countries quickly "warm up" and the two sides actively promote comprehensive bilateral relations.

Although political-diplomatic relations between the Philippines and the United States have been strained at times, security and defense ties have continued to be consolidated. As two countries with shared cultural, national interests, and security concerns, the United States remains the most important element of the Philippines' national security strategy. The US-Philippines alliance relationship has been established for a long time and is bound by the main pillars, which are: (1) Mutual Defense Treaty (MDT) signed in 1951, the Treaty stipulates that the two sides will protect defend each other in the event that one party is attacked by foreign forces; (2) Visiting Forces Agreement (VFA) was signed in 1998, effective from 1999; (3) Enhanced Defense Cooperation Agreement (EDCA) signed by US President Barack Obama and Philippine counterpart Benigno Aquino III in 2014, The Agreement allows the US military to use 05 military bases on Philippine territory . These agreements are the legal basis for thousands of US troops and vehicles to be rotated in the Philippines and allow the militaries of the two countries to conduct annual joint exercises, organize military training. as well as implementing humanitarian assistance, etc. According to statistics, each year the US military has about 300 such operations in this Southeast Asian country, including visits by warships.[13]

The period 2001 - 2010 is the period of relationship recovery after a period of hiatus aragraph. The events of 9/11, along with the US launching a global war against terrorism has received a positive response from the Philippines. In 2003, the US considered The Philippines is an important ally outside of NATO. The US stepped up its support to the Philippines through the International Military Education and Training Program (IMET) Agreement General logistics support signed in November 2002. The two sides have stepped up military exercises but annual event to increase awareness of the sea, fight the group terrorist Abu Sayyaf and JI. However, the security and military relations between the Philippines and the US at this stage mainly focused on counter-terrorism, because the relationship between the Philippines and China developed strongly, which is considered a golden period (2005 - 2009). in the relations between the two countries; and the US is not really interested in Southeast Asia.

     The period 2010 - 2016 was a period of brilliant development of the Philippines - US relations, in general, and security and military relations in particular. The new President of the Philippines B. Aquino in 2010 is considered a leader with pro-American ideology. His time in office was also the time when the US implemented the policy of "pivot" to Asia.

However, from 2016 up to now, the security and military relations between the Philippines and the US are showing signs of going down. After taking office (October 2016), President Dutert adjusted his foreign policy towards balancing relations with major countries, especially with China. The Philippines has broken the ice with China, which began after the Scarborough incident, in search of stronger economic cooperation. In contrast, the Philippines-US relationship, including security and military cooperation, tends to decrease. President Duterte had unfriendly words towards the US Ambassador to the Philippines.

2.2.2 Economic relations

The Philippines appears to be seeking the restoration of stronger economic ties with the United States. This change is intended to balance the country's growing dependence on China. In October 2017, the Philippines' foreign ministry said it was "seeking to strengthen economic cooperation" in an effort to improve ties with the United States, while the Philippines also said stronger economic ties would "be over security”^[14] The US is currently the Philippines' top trading partner. Bilateral trade relations between the two countries have been relatively stable in recent years and the balance of trade has always been in favor of the Philippines. The United States is an important export partner of the Philippines, and as of 2017 became the 31st largest trading partner of the United States.^[15]

Table 3. Philippine-US Export and Import from 1993 to 2017

Year

Export

Import

Total trade turnover

Balance of trade

1993

4,371,159

3,522,267

7,893,426

848,892

1994

5,143,260

3,941,268

9,084,528

1,201,992

1995

6,159,655

5,014,293

11,173,948

1,145,362

1996

6,965,613

6,362,319

13,327,932

603,294

1997

8,814,602

7,154,028

15,968,630

1,660,574

1998

10,097,860

6,560,209

16,658,069

3,537,651

1999

10,445,464

6,365,149

16,810,613

4,080,315

2000

11,365,314

6,411,214

17,776,528

4,954,100

2001

8,979,610

6,410,716

15,390,326

2,568,894

2002

8,683,343

9,345,871

18,029,214

-662,528

2003

7,262,950

8,988,894

16,251,844

-1,725,944

2004

7,087,855

8,270,235

15,358,090

-1,182,380

2005

7,417,629

9,096,257

16,513,886

-1,678,628

2006

8,689,532

8,436,963

17,126,495

252,569

2007

8,593,850

7,835,465

16,429,315

758,385

2008

8,204,639

7,221,286

15,425,925

983,353

2009

6,788,626

5,113,105

11,901,731

1,675,521

2010

7,559,105

5,886,656

13,445,761

1,672,449

2011

7,101,909

6,536,264

13,638,173

565,645

2012

7,783,676

7,123,937

14,907,613

659,739

2013

8,318,181

7,019,911

15,338,092

1,298,270

2014

8,660,778

5,738,340

14,399,118

2,922,438

2015

9,022,514

7,468,019

16,490,533

1,554,495

2016

8,851,330

7,575,919

16,427,249

1,275,411

2017

9,661,029

7,783,676

17,444,705

1,877,353

            Source: Source: Compiled from Philippine Statistical Yearbook (PSY), 2001, 2014,2017, 2019.

The US is one of the Philippines' top foreign investors. An American diplomat in Manila said that the US has invested $4.5 billion in FDI in the Philippines.^[16] According to statistics of the Philippine Statistics Authority (PSA), the top FDI suppliers to this country in 2017 are as follows: Japan accounted for 30%, Taiwan accounted for 10.3%, Singapore accounted for 9.6%. , the Netherlands accounted for 9.1% and the US accounted for 8.3%. China contributes only 2.2% of FDI to the Philippines.^[17]

            In the area of ​​economic aid, although Philippine President Duterte often complains that US aid often comes with conditions. In 2016, the US government stopped a plan to sell 26,000 artillery pieces to the Philippines. The United States also said it would withdraw from the Philippines $9 million in aid for anti-drug training. The US government has criticized Duterte's anti-narcotics campaign, where many drug suspects are killed without trial. However, experts also say that the pressure on the military and the public could increase pressure for Mr. Duterte to try to strengthen the relationship of the Philippines with the US.^[18]

• Philippines moves closer to China, and the Philippine-China relations

2.3.1 Philippines moves closer to China

Much archaeological evidence shows that the Philippines and China had a very early trading relationship. From the archeological artifacts of Song Dynasty porcelain, historians have proven that the Philippines and China developed trade over the centuries, even under the Spanish colonization. However, from the post-World War II period to the early 1970s, diplomatic relations between the Philippines and China were interrupted due to the US involvement with the policy of preventing the Chinese from doing economic trade with the Chinese. After many efforts of the two governments, on June 9, 1975, Beijing and Manila officially opened a new era, diplomatic relations between the Philippines and China were established.

However, from 1975-2001, the economic relations between the Philippines and China were almost "frozen" by the great influence of the political situation, although the Presidents Ferdinand Marcos, Corazon Aquino, Fidel V. Ramos, Joseph Estrada has also made "moves" to promote bilateral relations, but the trade and investment situation is still at a very modest level. Political developments, especially the case of China taking Mischief Reef from the Philippines in February 1995 and replacing the existing structures of Mischief Reef with a solid three-storey concrete fortress in November 1998, it was political tensions that were not very "warm" that caused the economic situation between the two countries to stagnate for decades. So it can be said that the relations with the People’s Republic of China in the first 20 years (1975-1995) can be generally characterized as cordial at the political level, warm in the cultural and people-to-people aspect but only of limited success in its economic objectives.[19]

Table 1: Import and export situation between the Philippines and China

(1975-2001)

 

Unit: Thousand USD

         

Year

Export

Import

Balance of trade

Total trade turnover

1975

47,036

25,215

21,821

72,251

1976

53,792

39,551

14,241

93,343

1977

78,351

108,020

-29,669

186,371

1978

111,627

47,458

64,169

159,085

1979

120,953

51,464

69,489

172,417

1980

205,705

44,986

160,719

250,691

1981

194,516

78,225

116,291

272,741

1982

206,327

105,204

101,123

311,531

1983

122,150

29,319

92,831

151,469

1984

220,255

60,185

160,070

280,440

1985

276,084

79,792

196,292

355,876

1986

104,960

101,690

3,270

206,650

1987

87,950

205,960

-118,010

293,910

1988

66,800

242,280

-175,480

309,080

1989

50,230

221,100

-170,870

271,330

1990

61,760

162,100

-100,340

223,860

1991

127,770

223,500

-95,730

351,270

1992

113,900

183,740

-69,840

297,640

1993

173,874

180,663

-6,789

354,537

1994

164,485

294,269

-129,784

458,754

1995

213,966

578,619

-364,653

792,585

1996

327,922

676,507

-348,585

1,004,429

1997

224,412

871,594

-647,182

1,096,006

1998

343,683

1,198,914

-855,231

1,542,597

1999

574,809

1,039,794

-464,985

1,614,603

2000

663,290

767,924

-104,634

1,431,214

2001

792,757

953,110

-160,353

1,745,867

Source: 1975-1992, The Political Economy of the Philippines China Relations, Benito Lim, Page 11,15. Period 1992-2017, Compiled from the Philippines Statistical Yearbook published in 2005, 2011 and 2019.

From the chart, it can be seen that the economic relations of the two countries have improved more and more when entering the early years of the 21st century, when the Philippines began to recognize and evaluate China as a major partner and one of the most important partners in the world. An important economic locomotive that could help the Philippines emerge from a decades-long stagnation

2.3.2   Philippines and China relations 2001-2021

2.3.2.1 The diplomatic and political relations

Diplomatic relations between the Philippines and China were established in 1975, and since then, the bilateral cooperation between the two countries has developed positively thanks to the consensus in the relevant views for the peace and prosperity of the region. Both countries have opportunities to strengthen cooperation in the fields of politics, security, trade, investment, tourism, as well as cultural and people-to-people exchanges for the benefit of the two countries.

During Arroyo's administration, Manila and Beijing carried out mutual cooperations, such as exchange visits by defense and military officials and, annual discussions on views on the current regional security situation and joint exploration in the South China Sea. Also, when Arroyo came to power, the Philippines - China relations became comprehensively developed in many different fields. In 2005, realizing this strategic partnership, Xi Jinping proposed different measures to strenghthen the relations between the two countries such as increasing the exchange visits of officials, increasing the level of bilateral trade, strengthening cooperation to tackle international terrorism and transnational crime, and coordinate policy in the implementation of the ASEAN-China Free Trade Agreement[20]. In December 2005, during the first meeting of the East Asia Summit in Kuala Lumpur, Arroyo met privately with Chinese Premier Wen Jiabao and reaffirmed the Philippines' strategic and cooperative commitment to China. After the January 2007 East Asia Summit in Cebu City, Premier Wen Jiabao and Ms. Arroyo signed 15 agreements on economic joint ventures and cultural exchanges.

During President Duterte's Administration,  President Duterte made several state visits to China from 2016-2019. During the visits, the two sides signed a Joint Declaration to strengthen friendly cooperation between the two sides. Especially in April 2019 President Duterte attended the second Belt and Road Forum for International Cooperation. During the bilateral meeting between President Duterte and President Xi Jinping, the two leaders witnessed the signing and exchange of agreements between the National Economic and Development Authority (NEDA) and the National Recovery Center Project. Dangerous Drug Abuse Recovery and Treatment between the Government of the Republic of the Philippines and the Government of the People's Republic of China.

2.3.2.2 Trade and investment relations

From 2001 to 2009, bilateral trade between the Philippines and China increased by 41% [21]. In 2003, trade value increased from $5.26 billion in 2002 to $9.4 billion or an increase of about 78.7%. In 2006, this amounted to USD 23.4 billion, an increase of 33.3% from USD 17.6 billion in 2005. As a result, Philippine-China trade became the fastest growing in the Southeast Asia, making China the Philippines' third largest trading partner after the United States and Japan. China also invests heavily in the agricultural and mining sectors of the Philippines. It funded the $8.75 million Philippine-Chinese Agricultural Technology Center in Nueva Ecija province, the country's rice bowl. In 2006, China accounted for 8.3% of the Philippines’ world trade, valued at 8.3 billion US dollars with an over 900 million US dollar trade surplus in favor of the latter. In 2005, bilateral trade was valued at 17.56 billion US dollars, which represented a growth rate of 31.74% over the 13.3 billion US dollars value in 2004[22].

The year 2010 marked the rise of China when it surpassed Japan to become the second largest economy in the world, after the US. In the opposite direction, after the global economic crisis period 2008-2009, President Benigno Aquino III continued to implement the foreign policy of diversification and multilateralization to promote economic - trade relations. and China is the new destination in Aquino's economic policy. Thanks to that, the relationship between the Philippines and China has achieved many achievements in the field of economy - trade. The total trade turnover of the two countries will reach 30.5 billion USD in 2020, more than double the 13.6 billion USD in 2010. After the meeting between President Aquino III and Xi Jinping since 30/03 September 8 - 2, 2011, the two sides issued a Joint Statement reiterating the China-Philippines Joint Action Plan on Strategic Cooperation signed on October 29, 2009.[23]  Since then, two-way trade turnover has continuously increased rapidly, although both the Philippines and China have been affected by the global economic crisis before.

Table 2. Philippines-China trade 2001-2017  

(Unit: Thousand USD)

Year

Export

Import

Balance of trade

Total trade turnover

2001

792,757

953,110

-160,353

1,745,867

2002

1,355,825

1,251,727

104,098

2,607,552

2003

2,144,647

1,797,486

347,161

3,942,133

2004

2,653,036

2,659,375

-6,339

5,312,411

2005

4,076,996

2,972,595

1,104,401

7,049,591

2006

4,627,660

3,647,354

980,306

8,275,014

2007

5,749,864

4,001,235

1,748,629

9,751,099

2008

5,466,881

4,245,553

1,221,328

9,712,434

2009

2,933,923

3,807,418

-873,495

6,741,341

2010

5,724,467

4,627,559

1,096,908

10,352,026

2011

6,237,326

6,085,075

152,251

12,322,401

2012

6,169,285

6,680,352

-511,067

12,849,637

2013

7,025,215

8,072,328

-1,047,113

15,097,543

2014

8,467,435

9,869,762

-1,402,327

18,337,197

2015

6,174,784

11,470,735

-5,295,951

17,645,519

2016

6,372,524

15,564,900

-9,192,376

21,937,424

2017

8,017,132

17,463,603

-9,446,471

25,480,735

Source: Compiled from Philippine Statistical Yearbook (PSY), 2014, Philippine Statistical Yearbook (PSY), 2017.

However, the two countries' trade relations slowed down and somewhat declined since January 2013, when the Philippines officially confronted China's expansionist claims in the sea [24]. This led to a disturbance in economic relations between the two countries in the period 2013-2016. Specifically, the export situation tended to decrease, from US$7,025 billion in 2013 to US$6.372 billion in 2016. The deficit level is getting higher and higher, the trade body is tilted towards China with an increasing trend. (see table 2). The two countries' trade cooperation was further promoted with President Duerte's "pivot" policy towards China, in addition, the two countries also discussed the 6-year development program on Economic Cooperation and Development. Trade, this is considered the overall cooperation framework for the two countries' economic relations from 2017-2022[25]. China became the Philippines' top trading partner in 2016 with a total trade of $21.937 billion, accounting for 15.5% of the Philippines' total trade in the same year. Exports from China reached $6.373 billion, while payments for imported goods were worth $15.565 billion, resulting in a $9.192 billion trade deficit.[26]

In 2020, the bilateral trade between our two countries reached 61.15 billion USD, with a year-on-year increase of 0.3%. China's non-financial direct investment in the Philippines hit $140 million USD, which was 1.36 times more than the number in 2019. During the first quarter this year, the bilateral trade reached 16.49 billion USD and China's non-financial direct investment in the Philippines 27.36 million USD, increased by 34.7% and 85.2% respectively. China remains the largest trading partner, the largest source of imports, the third largest export market and the second largest foreign investors of the Philippines. Tropical fruits from the Philippines such as bananas and avocados have been served on the dining tables of more and more Chinese families[27]

In terms of investment, the Philippines is in need of mobilizing large investment capital to transform its economic structure, from agriculture to relying on modern industry and services to develop the country. China with two policies "Going out"[28] and "One Belt One Road" has facilitated investment in the Philippines with many advantages. Total Chinese FDI inflows into the Philippines was US$387.34 million in 2010 and increased 2.5 times in 2019 to $830.6 million.

Total FDI from China to the Philippines (2001-2019)

Source: Total FDI stock from China to the Philippines, Published by C. Textor, Apr 19, 2021,https://www.statista.com/statistics/720978/outward-fdi-stock-from-china-to-the philippines / accessed on 9/6/2021.

This growth is led by businesses and companies from sectors such as information and communication technology, food production, real estate and electricity. The biggest project is to develop a third telecommunications provider, a joint venture with China Telecom. This investment is attracting related projects in the telecommunications, infrastructure and services sectors. Other notable Chinese investors in the Philippines include: C&U Group Ltd., New Hope Liuhe, Azure Gaming (Hongkong) Ltd., Suzhou Boamax Technologies Group Co., Ltd. and JTK Technology (Suzhou) Co., Ltd. These are corporations that promise huge resources to invest in the Philippines in the next period.

2.3.2.3  Security and defense relations

In the past, Philippines-China relations were limited to diplomatic, economic, cultural and social aspects. Both countries have deliberately avoided cooperation in defense and military matters because of the existing military alliance between the Philippines and the United States, the acrimonious disputes in the South China Sea, and the Philippines' ambiguous stance on the Taiwan issue are major obstacles to the establishment of military and defense cooperation between the Philippines and China. However, after the events of September 11, 2001, China supported the US global counter-terrorism operation, which created a more "cooperative" image of China in world affairs. With this new image, it has created an opportunity for China and the Philippines to open a new direction of cooperation in the field of security and defense. The two sides also agreed to hold the Defense and Security Dialogue of the People's Republic of China (RP) and the People's Republic of China. Conducted annually from 2005 to 2010, Philippine and Chinese participants discussed visits for military exchanges, training and education, port calls, intelligence exchanges, and support. military and even sensitive matters like the RP-U.S. MDT in 1951.[29] Beijing provided 10 million yuan ($1.25 million) in non-lethal military aid to the Philippines. China also donated 20 million yuan (US$2.5 million) worth of supplies (mainly 12 technical equipment) to AFP in 2009 and 2010.

In September 2007, then-Defense Minister of the Philippines Gilberto Teodoro met with General Gao Gangchuan, Vice Chairman of the Central Military Commission and Defense Minister, in Manila for bilateral consultations.[30] Prior to the end of President Arroyo's term in 2010, two People's Liberation Army Navy (PLAN) missile frigates and a supply ship called in Manila while en route to the Gulf of Aden[31].

In addition to the Philippines and China promoting increased maritime security cooperation in the region, China also strongly supports the Philippines' anti-terrorist operations in the South. In one of the signed bilateral agreements (Agreement on Economic and Technical Cooperation), Beijing provided Manila more than $14 million for anti-drug and law enforcement projects.^[32] In addition, China also provides weapons to the Philippines to strengthen the National Police force.^[33] Under President Duterte in 2018, he proposed having his military participate in counterterrorism training in China as a way to "create a balance."^[34] Philippine Defense Department Arsenio Andolong also announced that the country will participate in the China-ASEAN Joint Military Exercise in China's Zhanjiang and overseas from October 22-29, 2018. The Philippine side said that participating in the exercise with the Chinese military this time will "increase mutual understanding, seek the possibility of improving the handling of unintended incidents at sea and the modality of the treaty on the sea”^[35]. However, in the field of security, the Philippines remains suspicious and wary of China and continues its military alliance with the US. The Philippine military has a different view from Mr. Duterte's attitude towards China. Especially in the recent context that the two countries continue to have disputes related to the East Sea issue. The Philippines and China are related to the sovereignty dispute in the East Sea, as well as China's growing military presence. A strong revolution in the South China Sea also makes the Philippines worry about security risks from Beijing.

Conclusion

In recent years, with the rise of China, economic relations between China and the Philippines have developed rapidly fast. Manila can hardly turn away from Beijing when the most populous country in the world This is still the most important and indispensable partner of the Philippines in the field commercial economy. The situation of "politically hot, economic cold" with Beijing forcing Manila to balance its economic and political interests. America is one one of the Philippines' leading trade and investment partners but has not yet can keep up with the trade relationship between China and the Philippines.

The current state of security and military relations in the Philippines – In the United States, the characteristics of this relationship have also been revealed and pointed out. Security relations Philippine - US military in the 2001-2021 period continues to be developed and deepened broader, but unstable, influenced by individual leaders and directly by Chinese element. The Chinese factor affects this relationship even in development and when going downhill. China is both a common threat, but also a human cooperation between the Philippines and the United States. That's why this relationship is happening downward trend due to President Duterte's policy towards the US and China. The trend of security and military relations between the Philippines and the US is decreasing, causing many people to worry about the breakup between the Philippines and the US. However, through the analysis and assessment, the needs and interests of the two sides and the need for each other in policy implementation of the two countries are still close. High level relationship is still maintained. Therefore, President Duterte may not be leaving the US but just wants to show the US that the Philippines also has value in US policy.