(Bloomberg) — The presidents of China and the Philippines agreed to resume talks on oil and gas exploration in the South China Sea and discuss maritime differences amicably after meeting in Beijing on Wednesday, a move that potentially paves the way for easing of recent tensions.
“China is willing to properly handle maritime issues with the Philippines side through friendly consultation, and restart negotiations on oil and gas exploration,” China Central Television quoted President Xi Jinping as saying.
Financial Post Top Stories
Sign up to receive the daily top stories from the Financial Post, a division of Postmedia Network Inc.
By clicking on the sign up button you consent to receive the above newsletter from Postmedia Network Inc. You may unsubscribe any time by clicking on the unsubscribe link at the bottom of our emails or any newsletter. Postmedia Network Inc. | 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300
Xi also promised to find a compromise after Philippine President Ferdinand Marcos Jr. brought up Filipino fishermen’s plight in the disputed sea, according to a statement from the Philippines’ presidential communications office. The two sides decided to establish a link for diplomats to talk on maritime issues.
Marcos’s visit comes amid renewed friction between the nations over territorial claims in the South China Sea. Bloomberg News reported in December that China is building up several unoccupied land features, prompting the Chinese Foreign Ministry to say “the relevant report is purely made out of thin air.”
The Philippines later ordered an increased military presence in the contested waters and urged China to “refrain from acts that will exacerbate tensions” in the area.
Marcos’s predecessor, Rodrigo Duterte, ended discussions in June with Beijing on oil and gas exploration in the disputed sea. Then-foreign affairs chief Teodoro Locsin said discussions had gone as far as “it is constitutionally possible to go.”
China and the Philippines signed 14 deals during Marcos’s visit, including loan agreements for three bridge projects, and a pact on durian exports to China. The trip yielded $22.8 billion in investment pledges from Chinese companies, including in renewable energy, electric vehicles, mineral processing and agribusiness, according to Marcos’s communications office.
Shares of Philippine oil driller PXP Energy Corp., which has service contracts in the South China Sea, slumped 12.5% Thursday after the announcement on the possible revival of energy talks between Manila and Beijing. That drop reversed Tuesday’s 12% gain.
The Southeast Asian nation earlier expressed “great concern” over gatherings of Chinese vessels closer to its western coast. The US State Department backed Manila’s call for Beijing to respect international law.
Xi told Marcos the two countries should work to “safeguard the central role of Asean” in regional development and avoid confrontation among blocs, suggesting concern about American influence in the region.
Marcos’s government has ramped up diplomatic protests against China and fostered closer ties with the US that were undermined by Duterte. During a meeting with Marcos in September, President Joe Biden reaffirmed his country’s “ironclad commitment” to defend the Philippines.
Philippines Orders Military to Boost Presence in South China Sea
Chinese Premier Li Keqiang also met Marcos on Wednesday, telling him that China is willing to deepen economic and trade cooperation with the Philippines to push trade volume between them to over $100 billion, Xinhua News Agency reported.
—With assistance from Phila Siu, Manolo Serapio Jr. and Kevin Ding.
(Adds details on investment deals and on stock move.)