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Finance & Economy

Duterte in between China and Quad

President Duterte of the Philippines and President Xi of China (photo from Business Insider)

“Australia, the United States, India and Japan are talking about establishing a joint regional infrastructure scheme as an alternative to China’s multibillion-dollar Belt and Road Initiative in an attempt to counter Beijing’s spreading influence …” reported by Reuters on Feb 19, 2018. These four countries are commonly referred to as the “Quad”, the driving force of the “Indo-Pacific Strategy” to contain China.

On the same day, it was reported that “Philippine and Chinese officials met in Manila last week to discuss the possibility of working together to find energy assets in the South China Sea, a hotly contested waterway that hosts competing territorial claims from both nations.” According to Bloomberg, Philippine foreign affairs secretary Alan Peter Cayetano says, “I can tell you we are pursuing it aggressively because we need it.”

Obviously, both the Quad and China are competing for the favor of the ASEAN countries in general, and Vietnam, Indonesia, Malaysia and the Philippines in particular. Whether President Duterte would keep on working with China or turn to the Quad is essentially a matter of his very personal judgment. Duterte is the one who has made significant changes in foreign and economic policies, shifting from relying on Washington to siding with Beijing. Time will tell whether such a move is right or wrong, but at this moment it seems he is of the belief that collaboration with China would benefit more to his nation.

One of Duterte’s assessments is perhaps that he can secure faster result because Beijing is more efficient in making decisions as well as taking real and monetary actions, whereas Washington is slow and inconsistent. However, we now have a new situation: would the Quad make a difference?

My answer is No. Among a long list of reasons, let us focus on a very practical one. The Quad involves four parties and it is never easy to reach a workable consensus even though they have a common target. Take a look at the ASEAN or EU, power disparity and other factors drag on decision making and policy implementation. Why so? The Quad’s mission implies that the wealthy Japan and Australia would act as the contributors to new projects in India and ASEAN in return for their political and military co-operation.

But why did Japan and Australia not do it in the past? It is because it was and still is not economically viable. It runs too much risk to them as these two economies are neither low-to-medium-grade manufacturing hubs nor sufficiently sizable and diversified financial nexus. The benefits they may gain could not pay back. Do not forget that if Washington could do it, they would have done it long time ago, too.

Of course, China also runs high risk in promoting the new Silk Road, but one of the key considerations is that China is able to draw some ‘returns’ through exchange of goods and services with these peers — developing countries. Products of Australia and Japan are mostly too expensive to the Third World, while China can easily sell its affordable, say, refrigerators or smart phones or toilet seats to the consumers in Asia. It puts China in a very competitive position in making deals.

If time proves that Duterte is correct, his success would be a role model for Vietnam, Indonesia and others. It is well justified that the ASEAN countries want to squeeze advantages as much as possible from both China and the Quad, but unless the Quad could make a miraculous breakthrough, China will be the one who can ride on this snowball cycle of mutual growth jointly with its trading and investment Third World partners.

Duterte may be a legend in history, in the sense that he alone changes the balance of power in South East Asia fundamentally.

The opinions expressed are those of the author, and not necessarily those of China Daily Mail.


About keith K C Hui

Keith K C Hui is a Chinese University of Hong Kong graduate major in Government and Public Administration and the author of "Helmsman Ruler: China's Pragmatic Version of Plato's Ideal Political Succession System In The Republic" (2013).


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