WIKILEAKS: CHINA USED ZTE TO BUY GMA INFLUENCE; A 'TYPICALLY' CHINESE DEAL
MANILA, AUGUST 27, 2011 (TRIBUNE) By Michaela P. del Callar - The United States did not see as a threat the flourishing ties between the Philippines and China during the past administration of former President Gloria Arroyo but said the anomalous National Broadband Network (NBN) deal awarded to Chinese supplier ZTE was "typical of the deals that China reportedly uses worldwide to make friends and buy influence," a 2008 U.S. Embassy cable released yesterday by online whistleblower Wikileaks stated.
Then U.S. Ambassador to Manila Kristie Kenney, in her April 28, 2008 cable labeled as "sensitive," believes the U.S. remains a reliable ally of the Philippines despite Manila's increasing engagement with Beijing as corruption and graft-tainted projects entered into by the two countries had cast a dark cloud over its intensifying relations.
"Strengthened Philippine-People's Republic of China ties do not imply a weakening of our strong bonds with the Philippines," the cable said. "Recent scandals have reawakened long-held views among Filipinos that link ethnic Chinese to corrupt practices."
The scuttled deal between Chinese firm Zhong Xing Telecommunication Equipment Co., Ltd., or ZTE and the Arroyo administration, is an allegedly overpriced deal that was supposed to establish a nationwide telecommunications network such as broadband Internet services, video conferencing, landline, mobile phone calls and e-mail requirements for all government agencies from the national to the local level.
Arroyo, her husband Jose Miguel Arroyo and close political allies reportedly received millions of dollars worth of bribes from the Chinese firm, according to witnesses who testified before Senate hearings.
"Unlike the World Bank, the IMF, and many bilateral providers of assistance here, China does not link its aid to issues such as good governance, rule of law, or respect for human rights."
Thus, "public skepticism and scrutiny have underlined shortcomings in China's soft power efforts," Kenney said. .
The U.S. and China have been at loggerheads in Asia, where they have tried to court support and expand security and economic clout. In recent years, the Philippines' bilateral relations with China, particularly the economic aspect of its ties, increasingly became more dynamic and vibrant than the U.S. In 2008, Kenney said bilateral trade figures surged to a record high of $30.62 billion, an almost 10-fold increase from the $3.14 billion in 2000.
However, Kenney said the U.S. still enjoys popularity in the country as majority of Filipinos view the country as the Philippines' most trusted ally, both now and 10 years hence, citing poll results.
"The mission continues to stress that we do not view increased Chinese trade, investment, and development assistance as detrimental, while noting the need to use aid to strengthen transparency and good governance," she said.
Expanding Chinese ties with the Philippines can be attributed to the former Bush administration's focus on anti-terrorism, which according to analysts, is far from what the country needs at the moment.
With China's rising influence in the region, the U.S. role in the region has diminished even with traditional allies and friends.
Then in 2009, the U.S. signed the Association of South East Asian Nations' (ASEAN) Treaty of Amity and Cooperation, a loose code of conduct for the region signed by the original founding members of the ASEAN in 1976 and its main dialogue partners, such as Australia, China, India, Japan and South Korea, in a gesture that signaled America's return to the region.
Even as China enjoyed an increasing economic and political influence in regional affairs, a broadly held stereotype was reawakened and fed "a suspicion that both Chinese development assistance and business practices are rife with corruption and intended to further Chinese — not Filipino – ends."
In the wake of the ZTE scandal, Kenney reported allegations that the Arroyo administration allowed the seismic exploration deal in exchange for bribe-tainted loans.
Legislative and media critics of Arroyo, she said, also suggested that the administration is dragging its feet in meeting a 2009 UN Convention on the Law of the Sea (UNCLOS) deadline for defining the Philippine archipelago's baselines in favor of China.
The Aquino administration blamed Arroyo for the renewed conflict between the Philippines and China in the disputed Spratlys in the South China Sea.
Aquino accused Arroyo of approving the inclusion of Manila-claimed territories, like the Reed Bank near Palawan, in a joint oil exploration in 2005 between the Philippines and rival claimants China and Vietnam.
The inclusion of Reed Bank and a large portion of Philippine waters in the coverage area of exploration under the Joint Marine Seismic Survey Undertaking (JMSU) emboldened China to assert control over the territories long claimed by Manila.
But Kenney believes even China's soft power diplomacy towards the Philippines has its limits.
Philippines-China relations have hit a rough patch following the ZTE scandal.
The Chinese government admitted that the shelved telecommunications project has adversely affected the economic cooperation between the two countries.
Beijing said that several cooperation projects with the Philippines have been stalled because of the scandal, adding that Chinese investors were "upset" by allegations of bribery and corruption in the botched National Broadband Network deal.
And despite the Arroyo administration's efforts to contain the damage, Kenney said "the spoken and whispered allegations of Chinese corruption expanded to cover virtually all major PRC-funded projects in the Philippines."
Vice President Jejomar Binay, meanwhile, discounted the probability of an armed conflict between the Philippines and China on the Spratlys issue, but said there is a need to upgrade Philippine-United States security ties, while encouraging China to become a truly positive force for peace and development in Asia.
Binay told top level defense and security officials from 23 countries gathered at a forum at Harvard University Kennedy School that although the US is not obliged to take the side of the Philippines on its dispute with China on the Spratlys, it is bound under the 1951 Mutual Defense Treaty to come to the defense of the Philippines if its troops, public vessels or aircraft are attacked in the area.
He said that although he did not believe a China-Philippine armed confrontation would ensue because of Spratlys, it would be good for everyone to understand what could happen if the improbable happened.
The Vice President said Southeast Asian countries should support "a balance of power in the region" by encouraging China to become a truly positive force for peace and development.
Binay is in Harvard for a two-week senior executives program in national and international security. He was the only participant asked to give a lecture to the class of 72 highly selected security professionals that included some defense ministers of some countries and major generals in the US armed forces.
In an hour-long lecture on Southeast Asian security, Binay said "there is need for the Southeast Asian countries to engage China individually and collectively to create the necessary structures for peace and stability in the region."
Binay told the group that despite recent incidents in the West Philippine Sea, otherwise known as the South China Sea, between China and the Philippines, dialogue continues between the two countries through normal diplomatic channels and an exchange of high-level visits.
President Benigno S. Aquino III is scheduled to make a state visit to Beijing on August 31, presumably to discuss with China's president Hu Jintao the two countries' conflicting territorial and maritime claims, among other things.
"Convinced that only a rules-based approach to the South China Sea issue can assure us of the best possible results, the Philippines is eager to see the 2002 Declaration on the Conduct of Parties in the South China Sea transformed into an operational Code of Conduct, based on the principles of international law, including the United Nations Conference on the Law of the Sea (UNCLOS)," Binay said.
"Since not all the South China Sea is disputed territory, we should be able to delineate which features are disputed and which waters are not, so that we could then agree on what norms to follow in each case. This should serve as a starting point in considering the Philippine proposal for the establishment of a Zone of Peace, Freedom, Friendship and Cooperation (ZoPFFC)," he added.
Binay said the parties should be able to agree on what constitutes "unfriendly and exceptionable behavior" in the Exclusive Economic Zones (EEZ) and should refrain from pursuing it.
He urged all parties to practice utmost transparency and predictability, more proactive diplomacy and a deeper institutional approach to the issues.
He also asked the parties to look at models and points of cooperation that had worked in other parts of the world, like the Antartica treaty which 12 countries forged in 1959 and took effect in 1961.
In that region, the parties agreed that the place be used for peaceful purposes only, and completely demilitarized; that full freedom of scientific investigation, cooperation and information exchange be guaranteed; that the treaty should not recognize, dispute or establish any territorial sovereignty claim; and that nuclear testing or nuclear waste anywhere within it be absolutely banned.
Binay said that while the South China Sea is not Antartica, the principles that are working there may be worth looking at.
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Chief News Editor: Sol Jose Vanzi
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