Trade and territory

Aquino is on a five-day visit to China, the Philippine leader's first ever visit there, where he is scheduled to meet Chinese President Hu Jintao and Premier Wen Jiabao. He is being accompanied by a 200-strong delegation of Filipino businesspeople. Seven billion US dollars worth of deals are said to be on the cards. China's evident interest in Philippine oil and gas reserves are being reciprocated by the Philippines' interest in big-time Chinese investment in infrastructure projects. Chinese companies are expected to sign agreements in the rail, shipbuilding, mining, energy and airline sectors during Aquino's visit.

Five-year plan

China is already the third biggest trade partner of the Philippines, with bilateral trade reaching nearly 28 billion dollars in 2010. According to the latest five year plan, scheduled to be adopted during Aquino's visit, the aim is to take two-way trade to 50 billion dollars by 2016. "The visit hopes to push for more trade, investment... it will also showcase the Philippines as an attractive and profitable business destination," as Foreign Affairs Assistant Secretary Cristina Ortega told reporters, according to AFP. Ortega hinted that a Chinese car manufacturer was scheduled to seal a contract regarding a 1.5 billion-dollar investment in the Philippines; Manila announced in early August that Chinese firms were interested in investing nearly 7.5 billion dollars in 15 oil and gas exploration contracts.

But there are other sensitive issues upon which Aquino is likely to touch. Last March, China executed three Filipinos convicted of drug smuggling in China; Manila is generally concerned about the fate of Filipinos jailed in China. But if one of Aquino's key objectives is to "heal wounds in bilateral relations," as his aides told reporters, then the only way of reaching that objective is by "promoting mutual confidence to ensure an environment of peace and stability in the South China Sea."

Territorial tension

Furthermore, the Philippines has accused China of aggression and bullying in their disputes over competing claims, for example when Chinese forces supposedly fired warning shots at Filipino fishermen in disputed waters earlier this year. Prior to his visit, Aquino has told his countrymen that he will not let economic considerations outweigh his country's territorial claims in the South China Sea. Six countries - China, the Philippines, Malaysia, Brunei, Vietnam and Taiwan - claim territory in the South China Sea, China's claim being the largest among them.

Nevertheless, his desire to "heal wounds in bilateral relations" is being seen as sincere. In his first few months in office, Aquino has been at pains to avoid antagonizing China. Manila declined an invitation to attend the Nobel Peace Prize ceremony in Oslo last December to honor jailed Chinese dissident Liu Xiaobo. On the Chinese side, there is an equally earnest effort to play down their differences. As Zhang Xuegang, a Southeast Asia expert at the China Institutes of Contemporary International Relations, told Reuters: "There is the consensus between China and the Philippines that the South China Sea issue is but a small component of the bilateral relations and should not dominate or abduct the agenda."

Author: Arun Chowdhury (Reuters, AFP)
Editor: Sarah Berning