Philippines–China Relations: Interplay Between Domestic Politics and Globalization

Abstract

This chapter illustrates how Philippines–China relations in the past two decades have been shaped by Philippine domestic politics and regional and global market forces. Philippine domestic politics—characterized as being personalistic, weak in institutions, and patronage-based, plus the lack of a coherent China policy—have contributed to the fluctuations in the Philippine diplomatic relations with China. Relations have also been affected by negative perceptions of China by the Filipinos—the effect of US alliance, anti-Communist ideology influence of Taiwan, and presently, China’s claim of islands in the South China Sea. Investments, loans and ODAs from China are very much affected by the health of the bilateral relations. However, bilateral trade and non-state-to-state investments are determined by external economic phenomena such as the impact of global supply network in the 1990s and 2000s, Global Financial Crisis in 2008–2009, and China’s economic rebalancing after the GFC, and more recently, China’s OBOR and AIIB initiatives. The paper also shows that, in the past few decades, Philippine’s outbound investments have shifted from China to ASEAN, which is aligned more with economic rather than political motivations, aligning with the Duterte administration’s aims to diversify its foreign engagements beyond the traditional partners.