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BEIJING, April 21 (Reuters) – China on Tuesday signaled that energy aid to the Philippines could match Manila’s military exercises with the United States and other allies, as its top newspaper showed Beijing’s readiness to leverage its reserves in diplomatic disputes.
In an editorial titled “Philippines must create conditions to deepen cooperation”, the ruling Communist Party’s official People’s Daily accused the Philippines of hypocrisy for seeking emergency supplies ahead of hosting annual exercises involving more than 17,000 troops on the Philippine Islands near Tappin.
China has the largest strategic oil reserves in the world.
“These apparently contradictory words and actions expose the opportunistic nature of Philippine politicians,” said the commentary, published under the pen name “Zhong Sheng”, “Voice of China”, and usually used to express the views of top officials on foreign policy.
“How can (the Philippines) justify acting with total disregard for the interests of its neighbors and still expect them to help at a critical moment?”, the commentary continued, calling on Manila to “create the right conditions” for improved bilateral relations.
Tying the energy relief into a diplomatic dispute suggests Beijing could start using supply aid against nations that displease it, analysts say, because it has important mineral exports to Japan.
Relations between China and the Philippines have been strained by the two countries’ competing claims in the South China Sea, particularly in the second Thomas Shoal where Manila grounded a warship in 1999 and conducts regular supply missions to the sailors on board. The shoal lies within the Philippines’ 200-nautical-mile exclusive economic zone and about 1,300 km (808 mi) from mainland China.
China – the world’s second-largest fertilizer exporter and a major fuel supplier in Asia – has cut refined fuel exports to neighboring countries, following reports in March that it had ordered a ban on fuel exports to prioritize its domestic supply.
“I saw signs of an implied quid pro quo but not a direct condition of energy aid for political preconditions. What I saw was criticism of the Philippines being ungrateful,” said Eric Olander, co-founder of the China-Global South Project. “It wants to rely on China for economic ’emergency relief’ and also inflames the problem.”
Chinese officials last month offered to explain Taiwan’s energy stability in exchange for accepting Beijing’s rule.
China’s comparative energy advantage
The People’s Daily highlighted China’s decision to honor a fertilizer deal with the Philippines despite the March export ban and pointed to Manila’s parallel interest in opening talks on oil and gas supplies. But it went on to list a series of complaints, including war games.
Australia, Canada, France and New Zealand are also involved in the exercise, known as “Balikatan” or “Shoulder to Shoulder”, which runs until May 8. The maritime strike exercises will take place on Itbayat Island, the northern tip of the Philippines, about 155 kilometers from democratically-ruled Taiwan, which China views as its territory. The counter-landing live-fire drills will take place in Zambales province in the South China Sea, about 230 kilometers from the Chinese-controlled Scarborough Shoal.
Ruby Osman, a senior policy adviser at the Tony Blair Institute, said the energy shock vindicated China’s early 2000s strategy of containment and strengthened its ability to resist US pressure, encouraging Beijing to act with more confidence in its geopolitical situation.
But China’s comparative energy advantage should not be confused with the overall health of the country’s energy security, he cautioned. “China is still burning through strategic reserves they shouldn’t, with limited say on the length and scale of the blockade.”
Chinese President Xi Jinping publicly called for the reopening of the Strait of Hormuz for the first time in talks with Saudi Arabia’s Crown Prince Mohammed bin Salman on Monday, underscoring the unease the closure of the Strait of Hormuz poses to the $19 trillion economy, whose export-led maritime growth depends on the opening.
(Reporting by Joe Cash; Editing by Kate Mayberry)
