Beyond disputes

On June 7-8, US President Barack Obama will be hosting his Chinese counterpart Xi Jinping in a unique setting: a California resort, where they will be together for two days to discuss bilateral issues and the emerging global power structure.

The Chinese have not missed the significance of the meeting venue. Foreign leaders visiting Washington usually get to chat with the US president for a few minutes to an hour. VIP foreign guests get a state dinner at the White House, possibly featuring a concert or a ball.

The MIPs, or most important persons, get to stay for a day or two with the US president in his preferred venue for a kickback. An official hideaway is Camp David. George W. Bush, during his presidency, entertained MIPs at his private ranch in Texas, dubbed the Western White House.

To entertain the new leader of the world’s emerging power and second largest economy, Obama has picked Sunnylands, a desert resort in Rancho Mirage, California, called the West Coast Camp David.

News reports said the US wants deeper military ties with China. For its part, China reportedly wants to be on more equal footing with the United States on the world stage.It’s good for the world to have the lone superpower and the emerging power on friendly terms. Peace fosters economic growth. For America, it is easier to tackle differences with China in a friendly atmosphere, seeking areas of cooperation while addressing trade disputes, copyright infringement, cyber hacking, human rights, North Korea and other hot issues.

For the Philippines, of course, the big question mark is what such coziness between Washington and Beijing will mean for territorial disputes in waters around China.

Countries embroiled in the disputes (almost all of China’s neighbors) look up to Uncle Sam as a counterweight to the increasing projection of Chinese military power in the region. Washington, however, must balance its role as globocop with its own interests, particularly economic, and focus on areas of cooperation.

Among the gifts that Xi Jinping is prepared to bring to Sunnylands, according to reports, is a tougher Chinese policy on Pyongyang as North Korea’s new leader ramps up his saber rattling. This should be welcome news particularly for South Korea, whose manufacturing companies are suffering from Pyongyang’s withdrawal of some 80,000 North Korean workers from the two countries’ joint industrial zone in Kaesong. (The workers, meanwhile, are losing good pay.)

The US can also use more Chinese support in the United Nations Security Council on matters such as tougher sanctions on Iran.

Even as Obama turns on the charm during Xi’s visit, however, the US will need to reassure its traditional allies in Asia that their interests will be protected in the face of China’s aggressive projection of military strength.

Otherwise those allies could feel they are left with no choice but to fortify their own defense capability. Already South Koreans, I’ve been told, are perceiving (with concern) a tilt in Japan toward militarization amid China’s growing might.

We are seeing this defense upgrading, although at an exceptionally modest level, in our own country.

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For many countries, including most of our neighbors, the pluses in finding areas of cooperation if not promoting deep friendship with China outweigh the minuses.

The economic figures alone show the advantages. Last year, China was the largest trading partner of the Association of Southeast Asian Nations, while ASEAN was the third largest for China after the US and Europe.

ASEAN and China have a free trade agreement, and trade volume in 2012 stood at $400 billion. Only a fraction of the amount involved the Philippines.

Chinese Ambassador Ma Keqing, in our chat last week, told me that apart from the strains placed on bilateral relations by maritime territorial disputes, Chinese investors eyeing the Philippines were also worried about regulations that were not foreigner-friendly, particularly in mining and renewable energy.

In an earlier meeting, Ma had told me that while China has an overcapacity of solar power technology, with the cost more affordable than what the Europeans can offer, Chinese businessmen gave up trying to export the technology to the Philippines because our regulations were “too complicated.”

Remembering the experience of some Chinese companies that invested here, there is also lingering fear among Chinese businessmen about the inconsistency of investment policies, especially after the change of leadership in 2016.

With foreign ownership restrictions, Chinese investors also worry about finding the right Filipino partner.

“So many problems, so many uncertainties,” Ma told me.

If it’s any consolation to her, investors from other countries have expressed similar concerns about doing business in the Philippines. President Aquino will have to address these concerns, even as he reviews his policy on China.

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Being friendly with China is also good for tourism. With increasing affluence, the Chinese want to see the world. Last year 80 million Chinese traveled abroad, spending an average of $300 a day.

“They like to buy expensive stuff,” Ma observed.

Of the 5.64 million Chinese who visited Southeast Asian countries, however, the bulk took tour packages that included Malaysia, Thailand and Singapore, while only 260,000 went to the Philippines.

The availability of tour packages for the countries clustered together in the main mass of Southeast Asia wasn’t the only reason. Ma said among the top concerns of Chinese planning to visit the Philippines are personal safety, the inadequacy of tourism infrastructure and transportation difficulties. These is also low awareness of Philippine travel destinations among the average Chinese.

One Chinese couple decided to take a four-day break in Boracay. While they enjoyed the island itself, they were disappointed that they lost a whole day just getting there, with waiting times for their flight and boat ride eating up about seven hours.

These complaints are not unique to Chinese travelers, and addressing them will bring in more tourists from other countries. Attracting the Chinese market of about 1.2 billion potential travelers is one area in bilateral ties with a wide room for growth.

While we assert our territorial sovereignty and clarify our maritime entitlements, there’s no reason why we should not pursue areas of cooperation with our giant neighbor. It’s what other countries are doing, including those feuding with China over various issues.