Despite increasingly tense sea feud, China says trade ties with the Philippines can flourish

Economic Indicators Associated Press

The Chinese ambassador in Manila said Wednesday that trade between China and the Philippines grew last year despite their protracted territorial conflicts, providing hope their relations could flourish even as tensions remain.

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Ambassador Zhao Jianhua also played down reports that Chinese President Xi Jinping may skip the annual APEC summit to be hosted by Manila in November because of the conflicts. He said no decision has been reached because the Philippine government only sent its invitation recently.

"Despite the difficulties we have, I think last year bilateral trade grew 17.6 percent and our trade stands at over $44 billion," Zhao told reporters after speaking in a Manila business forum, where he highlighted how trade and investment between the Asian neighbors could still expand considerably.

"From these figures, you can see that our bilateral relationship is quite strong ... so that gives us hope for a better relationship," Zhao said.

While China is a large Philippine trading partner, the trade volume has lagged far behind Beijing's trade and investment in other Southeast Asian countries like Singapore, Malaysia and Indonesia.

Zhao reiterated China's offer for both countries to settle their differences through one-on-one negotiation and not through international arbitration.

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"Come back to bilateral talks," he said when asked what can mend the relations between Manila and Beijing. "It seems that China and the Philippines have different approaches but our preference is peaceful negotiation directly between the two countries."

A Philippine complaint challenging the validity of China's vast territorial claims in the South China Sea is pending before an international tribunal in The Hague. The tribunal recently held hearings to address Beijing's view that the five-man arbitration body has no authority to assume jurisdiction over the complaint.

The long-simmering disputes among China, the Philippines and four other governments flared again last year when Beijing launched massive island-building in seven disputed reefs in the South China Sea's Spratly Islands. The United States and its allies, including the Philippines, have asked China to halt the massive offshore constructions, fearing the artificial islands could be used by Beijing to block freedom of navigation and threaten rival claimants.

China has dismissed those fears, saying it has owned the territories since ancient times and has a right to build there.

"No single commercial ship has been affected negatively when they go through the South China Sea," Zhao said, adding that "the stability and peace in the South China Sea has been maintained despite the differences we have."