Aquino says China’s trade needs to keep sea dispute calm

Bloomberg

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A group of protesters chant slogans against the Chinese incursions within the South China Sea in Makati, Philippines. A group of protesters chant slogans against the Chinese incursions within the South China Sea in Makati, Philippines.

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Philippine President Benigno Aquino said his country’s spat with China over regional sea territories may be controllable because the world’s second-largest economy will hesitate to jeopardize trade routes.
“Is it a cause for concern? Yes, but at the end of the day China needs to continue growing,” Aquino, 54, said yesterday in an interview with Bloomberg News in New York. “It’s not in their interest to forestall trade within this particular sector.”
The Spratly Islands, a collection of more than 100 islands or reefs that dot the waters of the southern South China Sea, have been at the center of regional tension for decades, claimed by Taiwan, Brunei, Malaysia, Vietnam, the Philippines and China. The government in Beijing bases its claims to the South China Sea, known to Vietnamese as the East Sea, on its “nine-dash line” map, which extends hundreds of miles south from China’s Hainan Island to equatorial waters off the coast of Borneo, through which some of the world’s busiest shipping lanes run.
China, whose international trade is the world’s largest with imports and exports totaling $4.2 trillion last year, is dependent on export demand to weather a property slump. The Asian nation’s trade surplus climbed to a record in August as exports rose on the back of increased shipments to the U.S. and Europe.
The Philippines’ largest trading partner is China, accounting for 19 percent of its imports and exports last year, according to data compiled by Bloomberg. The trade with the Philippines made up less than 1 percent of China’s total.
‘Propaganda work’

Benigno Aquino, President of the Philippines.
Chinese ships loaded with construction materials regularly ply the waters near the Spratly Islands, carrying out work that will see new islands rise from the sea, according to Philippine fishermen and officials in the area. China stakes a claim to the South China Sea based on a map first published in 1947 and has rejected efforts to regulate countries’ behavior in the area.
“We all are supposed to be working on the code of conduct,” Aquino said. There is “a lot of propaganda work. And hopefully it just keeps to propaganda work,” he said.
The Philippines has sought international arbitration over its disputes with China, a process the government in Beijing refuses to join. The country of 97 million people has little military muscle to thwart China, whose defense budget this year is about 47 times that of the Philippines’ $2.8 billion. In April, the Philippines and the U.S. signed an agreement that will boost American troop presence in the Southeast Asian nation.
“We are increasing our defense spending, but it is not meant to serve as a threat to anybody,” Aquino said. “What can we do to match them in a military perspective?”
President Xi Jinping has prioritized expanding China’s naval reach since coming to power in November 2012, as he asserts the country’s right to mine, fish and patrol about 90 percent of the South China Sea.

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