Do we have to choose between Xi and Trump?
AFTER Chinese President Xi Jinping left Manila on Wednesday, I sat down with some homegrown analysts to assess the impact of his two-day visit. They were one in saying that Xi scored big with his charm and money offensive, and that the United States, China’s Pacific rival, will have to do much, much more to match his initiative. Until President Rodrigo Duterte took over, the Philippines had been almost entirely an American preserve. Today, it is derisively referred to as a “Chinese province,” and the 29 agreements signed during the visit, capped by a joint oil and gas exploration agreement on the contested South China (West Philippine) waters, seem to prove it.
These include agreements in trade and investment, banking and finance, infrastructure, agriculture, culture, education, people-to-people exchanges. There has been no detailed presentation of these agreements to show that each of the projects is affordable and necessary for the recipient. From Sri Lanka and Djibouti to Myanmar and Montenegro, The New York Times reported on Aug. 23, 2018, recipients of cash from the One Belt, One Road Initiative have discovered less than savory features of Chinese investments, including closed bidding processes that result in inflated contracts and the massive influx of Chinese labor at the expense of local workers.
Exploiting the wretched
“Fear is growing,” the report said, “that China is using its overseas spending spree to gain footholds in some of the world’s most strategic places, and perhaps even deliberately luring vulnerable nations into debt traps to increase China’s dominion as US influence fades in the developing world.” Last August, the 93-year-old Malaysian Prime Minister Mahathir Mohamad came to China to stop a contract for the China Communications Construction Company to build the East Coast Rail Link, estimated at $20 billion, along with a $2.5 billion agreement for an arm of the Chinese energy giant to construct energy pipelines.
Malaysia did not need those projects and could not afford them, Mahathir said.
Of the 29 agreements signed during Xi’s visit, the most sensitive and possibly most controversial is the joint oil and gas exploration agreement in the South China Sea, with a 60-40 percent sharing of the proceeds, in favor of the Philippines. Signed by Foreign Secretary Teodoro Locsin Jr. and Chinese Minister of Foreign Affairs Wang Yu on behalf of the Foreign Service Institute of the Philippines and the China Foreign Affairs University, the agreement has yet to be made public with all its details. The government has also yet to explain the choice of the contracting parties, which have nothing to do with oil and gas exploration. The FSIP, for its part, is known only as a training institute for diplomats, nothing else.
A senior member of the Supreme Court has expressed serious misgivings about the constitutionality of allowing China to jointly explore the Philippines’ natural resources within its “own” territory, as confirmed by the July 2016 ruling of the Permanent Court of Arbitration at The Hague. In Congress, Senators Francis Pangilinan, Liberal Party president, and Antonio Trillanes 4th, DU30’s well-known nemesis, have filed a Senate resolution seeking an inquiry into the agreement. The public needs to be sufficiently assured that the exploration agreement, assuming it is constitutionally sound, is not meant to deaden the Philippines’ zeal for its territorial claim on the Spratlys.
But questions of national security have been provoked not only by this particular agreement, but even more strongly by the government’s selection of the third telecommunications player, before Xi’s arrival. This refers to the Mislatel consortium, made up of the government-owned China Telecom, the largest fixed-line provider and the third largest mobile telecom provider in China, and the Udenna Corp., owned and controlled by Davao-based businessman Dennis Uy, whom some businessmen describe as the fastest growing businessman of his generation.
Who’s Dennis Uy?
Who is Dennis Uy? The only thing we can say for now is that he is said to have contributed P30 million to DU30’s presidential campaign; I hope to give you more in another column. And what is Udenna Corp? An article on Rappler by J.C. Punongbayan of the University of the Philippines describes Udenna as the fastest expanding company in the country, bar none.
It is the parent company of Phoenix Petroleum, which captured 6.2 percent of the petroleum market share in 2017, and of Chelsea Logistics, whose tanker fleet accounted for 18 percent of the industry’s gross tonnage in 2017. On Phoenix Petroleum’s 10th listing anniversary at the Philippine Stock Exchange in July 2017, hardly a presidential social activity, DU30 was the most important guest in attendance. Share price of Phoenix Petroleum has taken off since, according to the Punongbayan article.
Meanwhile, Udenna has been on a property acquisition spree. In July 2017, it acquired 100 percent of Enderun Colleges; in October 2017, 100 percent of Family Mart; in September 2018, 70 percent of Conti’s Holding Corp. It is now trying to complete a 24-story Udenna Tower in Bonifacio Global City (BGC), and preparing to build a 177-hectare Clark Global City in Clark Freeport Zone in Pampanga.
In 2017, Udenna’s debt grew by 200 percent from the previous year. But it posted an income of P4.1 billion, a 426 percent increase from the previous year. Unable to explain its phenomenal growth, some businessmen have described Udenna as the fastest growing “crony corporation” of the DU30 administration. Although Mislatel’s entry as the third telco player is originally billed as a deliberate move to break the telecom “duopoly” of PLDT-Smart and Globe Telecom, there is growing concern that the Chinese government’s entry in the industry renders the country vulnerable to the dangerous practices of Chinese cybertechnology.
More lethal than Russia
Highly qualified sources believe China has become the biggest state sponsor of cyberattacks against the West, even outpacing Russia, which is accused by US Democrats of having interfered in favor of Trump in the last US elections. Chinese cyber specialists are said to be actively engaged in misdirecting a large amount of internet traffic to China. If this is true, then there is nothing to prevent Mislatel from misdirecting a significant part of Philippine internet traffic to China. The threat to national security is therefore real, but because of the propaganda spin coming from Malacañang and Beijing, none of this is discussed at all.
China’s money plays a major role in all this, but even more major than money is China’s human rights politics. DU30’s war on drugs and its extrajudicial killings (EJK) have riled the Western democratic institutions, but not a peep has been heard from China or the Chinese government. This has made Xi DU30’s most comfortable natural ally, even without China’s promised economic grants and investments. By contrast, Barack Obama had wanted to inquire into DU30’s human rights record, so he quickly became a “son of a whore.”
Trump avoided Obama’s mistake by not saying one word about the killings. This made Trump and DU30 kindred spirits. DU30 held off on his plan to scuttle the Philippine-US military alliance as defined by the Mutual Defense Treaty, the Visiting Forces Agreement, and the Enhanced Defense Cooperation Agreement, and as he promised in Beijing in October 2016. He continues to flirt with the idea by accepting transfers of small arms from Beijing and Moscow, and by talking of wanting to acquire a submarine from Moscow. But he keeps himself in check, for so long as Trump maintains his silence on the extra-judicial killings.
In this, Trump behaves exactly like Xi, who will not say one word about the killings. This is not expected of Trump, but silence or inaction seems to have become Trump’s new standard response to the most heinous crimes. In Istanbul, the US Central Intelligence Agency (CIA) was able to establish, apparently beyond reasonable doubt, that Saudi Arabia’s Crown Prince Mohammed bin Salman had ordered the savage murder and dismemberment of Saudi journalist and Washington Post columnist Jamal Khashoggi inside the Saudi consulate on October 2.
But Trump chose to ignore the CIA finding, and decided to focus instead on the Kingdom’s $110-billion military purchase from the US. “My relationship is with the Kingdom of Saudi Arabia,” [not with the decent opinion of humankind, or with anybody else], he said.
In the case of the Philippines, where Trump did exactly nothing to counter Xi’s initiative, his unspoken message seems to be very clear: “My relationship is with President Duterte, not with the Republic of the Philippines, or the Filipino people, or anybody else.” So, when people ask how and why the US seems to have lost favor with the Filipinos, homegrown analysts answer: “Because the average Filipino still believes human rights are still worth fighting and even dying for, but Mr. Trump has yet to convince us he does.”
IN MEMORIAM
Former newspaperman, governor and congressman of Ifugao Gualberto “Bert” Lumawig, 85, died in the peace of our Lord after a lingering illness on November 18. His remains lie in state at the Loyola Memorial Chapels in Marikina. He will be buried after the 9 a.m. funeral mass on Tuesday. I ask the pious reader to offer a prayer for the repose of his soul. Thank you.
fstatad@gmail.com
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