Duterte’s (Philippine) Realignment with China Encouraged by Beijing’s Economic Sweeteners

Philippine President Rodrigo Duterte has made clear during his visit to Beijing this week that he plans to decisively shift the country’s allegiance from the U.S. to China.  During a forum at the Great Hall of the People he stated rather plainly that,

America has lost now.  I’ve realigned myself in your ideological flow and maybe I will also go to Russia to talk to (President Vladimir) Putin and tell him that there are three of us against the world — China, Philippines and Russia.  It’s the only way.  In this venue, I announce my separation from the United States.”

Although the substance of this shift as it relates to the country’s extensive military, diplomatic and economic ties to the Untied States remains to be seen, these statements go well beyond his earlier gestures to Beijing over the South China Sea.  He has already communicated that he would move the Philippines away from its pursuit of a multilateral (even Hague-arbitrated) solution to China’s illegal claims on its islands toward a Beijing-favored, bilateral approach – even, presumably, with regard to Scarborough Shoal, which was seized militarily by China in 2012.

Although other political (and personal) factors surely play into these announcements by Duterte, the economic benefits he is seeking from Beijing and Beijing’s proactive efforts to influence the new President with promises of investment clearly play a role in this strategic shift.  The Philippine president has been looking for large infrastructure investments from China and, during this visit, some $13.5 billion in business agreements have already been announced, including financing packages offered by the Exim Bank of China to fund certain of the infrastructure projects that have been emphasized as centerpieces to Duterte’s economic ambitions.  A number of additional trade and investment agreements have also been signed on a visit that included some 200 Philippine business leaders as part of the official delegation.

Two of the eight points articulated by Duterte as his economic plan for the country open the door to Chinese investment, notably his intentions:

    1. to accelerate infrastructure spending; and
    2. to address ownership restrictions on foreign firms making investments in the country.

These changes in Philippine policy, including the broader strategic shift towards an alliance with Beijing, demonstrate China’s ability to leverage its economic strength for the purposes of influencing the strategic decision-making of regional states.

Of course, in situations where the political leadership of such countries feel estranged or isolated by the U.S. and its allies, as has been the case for Duterte (due to criticisms over extra-judicial killings and other issues), Beijing’s success rate in “turning” foreign countries with promises of economic rewards with “no strings attached” has been especially successful.  This has been demonstrated repeatedly in cases, such as Cambodia and, previously, in Burma – as well as in other parts of the world, including South America and Africa.