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Philippine Foreign Affairs Secretary Teodoro Locsin Jnr with Chinese Foreign Minister Wang Yi in Manila. Photo: AP

China offers free Covid-19 vaccines, loans to Philippines as Wang Yi wraps up Southeast Asia tour

  • Analysts said Wang’s trip was timed to shore up alliances between China and its neighbours before Joe Biden becomes US president next week
  • Under the Trump administration, the US and China clashed on several fronts, encompassing trade, Taiwan and the South China Sea
China’s Foreign Minister Wang Yi came to Manila bearing gifts, promising half a million doses of Covid-19 vaccines, US$1.34 billion in loan pledges for infrastructure projects and US$77 million (500 million yuan) in grants, underlining Beijing’s support for its “closest neighbour” in the twilight of President Rodrigo Duterte’s administration and before Joe Biden becomes US president next week.

“As a friend of the Philippines and your closest neighbour, we will firmly stand with the people of the Philippines until the defeat of this virus,” Wang said in Mandarin ahead of talks with Philippines Foreign Secretary Teodoro Locsin Jnr.

Locsin thanked Wang for the vaccines but also made reference to the South China Sea dispute. According to a transcript of the meeting released by Locsin’s office, Locsin told Wang: “It behoves us to show our ability to rise to the challenge of managing differences peacefully and in accordance with law, while making headway towards trust-building and practical concrete mutually beneficial cooperation.”
Wang also had a 40-minute meeting with Duterte, who stressed China would play a key role in the Philippines’ economic recovery. Once the fastest-growing economy in Southeast Asia, the Philippines plunged into recession last year during the pandemic, which prompted one of the world’s longest and strictest lockdowns.

“The recovery of nations … sits on the back of stronger economies,” Duterte said, according to a statement from the presidential palace. “China plays a very key role in reviving our region’s economy. Let us do all we can to revive economic activities between the Philippines and China.”

A statement by the Philippines Department of Foreign Affairs on Saturday night did not specify which vaccine China would donate, although health authorities expect to take orders of the first batch of 50,000 vaccines from China’s Sinovac Biotech next month to start the country’s vaccination drive. The country has secured 25 million doses in total of Sinovac’s CoronaVac vaccine.

But CoronaVac has yet to be approved by the Philippines Food and Drug Administration for emergency use, unlike the vaccine developed by Pfizer and BioNTech, which was approved last week.

The Pfizer/BioNTech vaccine doses may arrive in the Philippines next month through the World Health Organization-backed Covax facility, according to Philippines vaccine tsar Carlito Galvez. The Philippines government was also in talks with Pfizer to purchase up to 40 million doses, he said.

Even as the Philippines reports thousands of new infections each day – with total infections now approaching 500,000 – many Filipinos are hesitant to be vaccinated due to safety concerns. Lawmakers have also questioned why the Philippines, which has the second-highest Covid-19 infections and casualties in Southeast Asia, intends to begin vaccinations with CoronaVac, given that data from late-stage clinical trials show varying – and lower – efficacy rates than vaccines developed in the US and Europe.

Before Wang arrived in Manila – his last stop in a six-day tour of Southeast Asia – Beijing pledged its largest ever infrastructure project loan to the Philippines, totalling US$940 million for a railway on the main island of Luzon, which is home to just over half of the Philippines’ population of 110 million and about 70 per cent of the country’s economic output.

The 71km cargo railway will link two former US military bases that have been converted to civilian and commercial use – Subic Bay Freeport Zone and Clark International Airport – to “improve logistics efficiency, reduce transport costs and support the potential demand for freight services and economic activities in the region”, a statement by the Chinese Embassy in Manila said.

China separately also signed an agreement to loan the Philippines US$400 million for a 3.86km bridge to link Davao City and Samal island, a popular tourism destination. The two governments will begin negotiating terms of the loans soon, the embassy added.

The projects are part of Duterte’s signature “Build, Build, Build” infrastructure programme launched in 2017, comprising airports, highways and seaports, although critics have said it has stalled as only about 5 per cent of US$24 billion in loans pledged by China has been remitted.

Coronavirus vaccine: Asia-Pacific countries tread cautiously in roll-out

Dr Chester Cabalza, president and founder of the International Development and Security Cooperation think tank, said signing the Subic-Clark railway project would “give the impression that China will stay as one of the Philippines’ biggest investors even after the Duterte administration”.

“It is an early announcement for the next batch of Filipino presidential candidates that China can be an ally to the Philippines and a rival to the United States,” he said.

Cabalza also said Wang’s recent visits to Southeast Asia and Africa indicated “China feels the pressure of the possible warm relations of Manila and Washington [under Biden]”.

“Beijing needs to reaffirm its commitment to the Duterte administration despite a swinging foreign policy against China on the South China Sea conundrum and give reassurance of its support to the government’s Build, Build, Build programme and vaccine programme,” he said.

At their meeting, Locsin and Wang, who also serves on China’s cabinet, the State Council, witnessed the signing of a grant agreement for China’s foreign aid agency to make available some 500 million yuan to finance projects for infrastructure and conduct feasibility studies for major initiatives. It was the seventh grant from China to the country since 2016, bringing their total value to 3.25 billion yuan, Reuters reported.

Lucio Blanco Pitlo III, a research Fellow at the Asia-Pacific Pathways to Progress Foundation and board member of the Philippine Association for Chinese Studies, also noted China’s recent focus on diplomacy.

“By pitching its vaccines and renewing its commitment to infrastructure projects, investments and trade, China is positioning itself as a partner to help countries recover and revive their economies from the onslaught of Covid-19,” Pitlo said.

Trump’s parting gift to Philippines: defence equipment worth US$29 million

He predicted a new administration would continue the Subic-Clark project “so long as the provisions of the Subic-Clark railway deal are sound, compliant with relevant laws and in the country’s interest”.

“Negotiating well is crucial so that the next administration will not be bounded by a bad deal,” he said, although he added that “there is nothing that prevents the next government from reviewing, renegotiating or cancelling the contract if it sees fit”.

China is the Philippines’ largest trading partner and Duterte has, since taking office in 2016, sought closer ties by setting aside their territorial dispute over the South China Sea, which China claims almost in its entirety.

Manila adopted a tougher, more vocal stance against China last year as the US, its traditional security ally, intensified criticism of Beijing’s actions in the waterway. However, the statement issued by the Philippines’ foreign affairs department said Locsin and Wang had “confirmed that differences on contentious maritime issues do not represent the entirety of the Philippines-China bilateral relationship”.

“Both sides renewed their commitment to mutual respect, managing issues peacefully and in accordance with international law, and exploring areas for possible cooperation,” the statement said.

Nian Peng, deputy director and associate fellow of Research Centre for Maritime Silk Road, National Institute for South China Sea Studies in China, said Wang was seeking to stabilise the South China Sea situation and strengthen maritime cooperation with Southeast Asian states.

Biden brings fresh hope to US-China ties, but differences remain

“That’s why he chose to visit Myanmar which assumes the roles of the coordinator of China-Asean relations and co-chair of consultations on the Code of Conduct in the South China Sea this year, and Brunei which chairs Asean Chairmanship 2021,” he said. “As China wants to accelerate the COC negotiation, the better policy coordination with the above two countries would be beneficial.

“Moreover, China also tries to upgrade relations with the Philippines and Indonesia by providing vaccines and economic benefits, so as to maintain the peace and stability on the South China Sea.”

On Friday, Cambodia, one of Asean’s least developed countries and a staunch ally of China, announced Beijing will donate 1 million doses of the Sinovac vaccine. The kingdom’s strongman leader Hun Sen thanked its “friend” Beijing for its generosity.

This article appeared in the South China Morning Post print edition as: Wang yi promises vaccines, loans in Philippine visit
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