Beijing ‘aid’ always has strings attached


Admitting to be a tyro in diplomacy, President Rodrigo Duterte is to square off with a 4,000-year master of the craft: China. His visit to the giant neighbor this week aims for some economic favors. Bulging in his coat pocket would be an international court ruling favoring Manila against Beijing’s spurious ownership claim over the entire South China Sea. The plan is to refrain from discussing the document in scheduled talks with President Xi Jinping. Only $3 billion worth of investments reportedly will be on the table. Would Duterte get it?

A lot would depend on his understanding of China’s diplomatese. China knows that Duterte would want to hear about train projects in Mindanao, where he was a city mayor for two decades. Beijing may offer it to him as “aid.” But China’s concept of aid is different from other “donor nations.” It is actually loans, with trade concessions attached. President Xi’s declared policy in Africa, Central Asia, and South America has been to mix three terms – loans, trade, investments – rolled in as aid. The end is to spur Chinese employment through state enterprises. Xi’s predecessors had done it too.

Loans and investments packaged as aid were dangled to Manila in 2006. Then-trade minister Bo Xilai pledged $2 billion a year for five years for various projects. Leaders in other Third World countries were so envious. Bo’s loans were noted to be liberal not so much in repayment conditions than in allowing corrupt presidents to skim commissions. Among the loans granted to the Philippines were for the North and South railways, and the National Broadband Network. The NBN, worth $329 million, had a 60-percent kickback of $200 million built into it.

Exposure of the sleaze behind the Chinese-financed projects prevented the hatch-up of any more. But not before “aid” also was used by Beijing to weaken the Association of Southeast Asian Nations. ASEAN in 2002 solidly was opposing China’s claim over the surrounding sea. As a bloc it got Beijing to sign a Declaration of Conduct to avoid provocations and confrontations. Two years after China offered aid to Vietnam and Malaysia in exchange for acceptance of its sea claims. The former didn’t budge; the latter was tantalized. Bait was dropped in Manila too, and it bit it, hook, line, and sinker.

It came in the form of the Joint Marine Seismic Undertaking. Under the JMSU, China and the Philippines were to explore their “disputed waters” for potential “joint use,” Manila was to contribute $5 million, while Beijing was to conduct most of the work worth more than that, to plot fisheries and oil reserves.