China, Philippines agree to handle disputes peacefully, boost cooperation

By Yew Lun Tian and Neil Jerome Morales

BEIJING/MANILA (Reuters) – China and the Philippines have agreed to set up a direct communication channel between their foreign ministries in the South China Sea to handle disputes peacefully, they said on Thursday.

Their agreement, which contained 14 elements aimed at cooling security tensions and increasing economic cooperation, comes as they try to mend a relationship damaged after the Philippines won a 2016 arbitration ruling that nullified China’s extensive claims in the Sea of South China.

The Philippines has previously raised concerns over reported Chinese construction activities and the “filling” of its ships by dozens of Chinese vessels in the disputed waters of the South China Sea, an area rich in oil, gas and fishing resources.

In a joint statement issued after Philippine President Ferdinand Marcos met with Chinese President Xi Jinping in Beijing on Wednesday, the two leaders reaffirmed that their countries will respect each other’s sovereignty and territorial integrity.

The Philippines will pursue an independent foreign policy and was willing to cooperate for regional peace and the national interests of both countries, Marcos said in a speech after arriving in Manila.

“We agreed that maritime issues between the two countries do not constitute the entirety of our relations,” Marcos said, adding that the maritime rivalry remains an “important concern and priority” for the Philippines and the region.

The two sides also agreed to resume talks on oil and gas exploration in the South China Sea and discuss cooperation in areas including solar, wind, electric vehicles and nuclear power.

Coast guards from China and the Philippines will also meet “as soon as possible” to discuss “pragmatic cooperation”.

The two countries would consider informing each other when they fired missiles and would cooperate to retrieve missile debris, they said in their joint statement.

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Last November, when debris from a Chinese missile fell into the South China Sea, a Chinese coast guard vessel stopped a Philippine boat from trying to retrieve it.

The two countries reaffirmed the importance of peace and stability, as well as freedom of navigation and overflight, and will hold an annual security dialogue, they said.

As for economic cooperation, China agreed to allow more Philippine imports in order for bilateral trade to return to or exceed pre-pandemic volume.

Both sides also promised to increase the number of tourists and flights between their capitals to pre-pandemic levels.

They also said that both sides will cooperate on the procurement of vaccines. China is among the world’s leading exporters of vaccines against COVID-19.

Marcos’ three-day visit to China comes as it emerges from a self-imposed border closure since the start of the pandemic in 2020, which has disrupted trade and damaged its economy.

The two sides also renewed an agreement on the Belt and Road Initiative, Xi’s signature strategy for overseas infrastructure investment.

Chinese investors have pledged $22.8 billion in investment after a business meeting with Marcos, the Philippines’ press secretary said.

The pledges included $13.76 billion for renewable energy, mainly solar and wind, $7.3 billion for strategic monitoring including electric vehicles and mineral processing, and $1.7 billion for agribusiness.

“I assure you that our government is committed to supporting your business activities,” Marcos told Chinese business leaders before his return to Manila.

(Reporting by Yew Lun Tian and Liz Lee in Beijing, and Neil Jerome Morales in Manila; Editing by Christopher Cushing and Raju Gopalakrishnan)