Tense

The APEC summit meeting held in Papua New Guinea over the weekend transformed into a theater for the building trade and diplomatic tensions between the US and China.

In their respective statements, US Vice President Mike Pence and Chinese President Xi Jinping launched attacks against each other without naming their rivals. The US reiterated its position against theft of intellectual property rights and policies that forced investors to transfer their technologies to the host country. Beijing, for its part, criticized protectionism and, rather oddly, militantly espoused free trade.

In the face of determined efforts by China to build influence in Papua New Guinea and the Pacific island nations by financing infrastructure projects, Pence announced during the summit America’s decision to join Australia in building a naval base in the nation’s northernmost Manus Island. The construction of the naval base is a direct challenge to what is seen as China’s rising influence in the western Pacific, especially in the South China Sea.

Australia has declared its intention to permanently station some of its navy ships in the projected base. The US has yet to clarify if it plans a permanent military presence in the area.

China had earlier proposed building a military base in Papua New Guinea. The proposal did not progress, apparently due to counter-pressure exerted by Australia and the US. Australia sees Papua New Guinea and neighboring Pacific island states as being in its sphere of influence. During the Second World War, Japanese war planes managed to bomb Australia’s northernmost city of Darwin from air strips built in this area.

A few weeks ago, the Australian Prime Minister announced the establishment of a multi-billion dollar fund to help support infrastructure build up in the Pacific nations. This is clearly an attempt to offset China’s growing influence achieved through generous funding for its Belt and Road initiative. Canberra declared that the Pacific will be restored to the “front and center” of Australia’s foreign policy.

The diplomatic maneuvering, it seems, was not limited to the public diplomatic stage. Reports last Sunday indicated the police had to be called in to stop Chinese diplomats attempting to “barge” into the offices of the New Guinea foreign minister. Their intention was to influence the crafting of the final statement for the summit meeting.

We are familiar with tactics such as these. The ASEAN has so far failed to issue a definitive statement protesting China’s construction of artificial islands in the South China Sea. On these islands, China built landing strips, installed sophisticated surveillance equipment and very likely inserted tactical missiles in the facilities.

Each time the matter is taken up, Laos and Cambodia, the two most pro-China among the ASEAN member states, moved to block any statement hostile to Beijing. Both countries have benefitted hugely from China’s largesse. 

The Philippines, given its new foreign policy tack, is now widely considered to be the third ASEAN country likely to stand up for China’s interests. In remarks made in Singapore, President Duterte spoke vaguely about China being in “control” of the South China Sea. That created more than negligible diplomatic ripples.

Confrontation

The US opposes China’s build up on the artificial islands, seeing this as a threat to the freedom of navigation in some of the busiest sea lanes in the world.

To express Washington’s opposition, US warplanes and warships have launched aggressive patrolling of the area. These patrols have resulted in many near-skirmishes as Chinese forces challenged what they saw as incursions.

 The British have gotten into the act. They have joined the Americans in fielding naval patrols close to the contested South China Sea reefs.

The area around the artificial islands has become a flashpoint. Any stray incident could lead to hostilities breaking out.

The week before, President Duterte, speaking in Palawan, half-seriously warned about the danger of stray munitions hitting our tourist island in the event hostilities break out in the Spratlys. The island is actually out of the range of small weapons fire. But we will indeed find ourselves in a tough situation should the confrontation between the superpowers escalate.

The worsening dispute in the South China Sea is overlain by the worsening dispute on trade.

The US has imposed steep tariffs on $250 billion worth of Chinese goods entering its economy. China has retaliated in kind, although there is not enough imports from the US to fully match the range of goods the Americans have imposed tariffs on.

Even without a shooting war breaking out, the trade war could impose a severe toll on the surrounding economies dependent on China’s sustained economic expansion. That economic expansion showed signs of weakening the past few months since the Trump administration decided to punish the Chinese with tariffs.

After two years of repairing our bilateral relations, China is now the principal destination of Philippine exports. She is also the principal source of our imports (besides oil). This is a bilateral relationship that can only be as robust as China is able to grow its economy.

 The view in Beijing is that China should be perfectly capable of riding out the trade pressures imposed by the US – but only if it is able to strengthen its economic partnerships with the growing economies of this region. As China consolidates its partnerships with Southeast Asia, the frontline of its confrontation with the western powers is now pushed out to Papua New Guinea and the other Pacific nations.

For this reason, Port Moresby has become important for all the players in this geopolitical game.