Philippine President Rodrigo Duterte plans to continue partnering with a Chinese state-owned construction company punished by the United States for building artificial islands in the South China Sea. And it will back other Chinese companies that want to do business in his country, a spokesman for the president said.
“We are not a vassal state of any foreign power,” Duterte spokesman Harry Roque said to underscore Manila’s repudiation of President Trump’s crackdown on the China Communications Construction Company.
“I will be categorical: Sangley [Airport] project will continue,” Roque said, according to local media, referring to the work being conducted by the CCCC. “All other projects involving Chinese companies that are banned in the United States can continue in the Philippines.”
Such a truculent posture toward the U.S. continues a theme of Duterte’s presidency, but it represents a public break with his administration’s top diplomat, who endorsed the cancellation of contracts with the construction company last week. Duterte has sought Chinese investment and political goodwill since coming to power in 2016, even as Beijing claimed sovereignty over vast swathes of the South China Sea in defiance of the Philippines competing territorial claims.
Trump’s administration imposed visa restrictions on CCCC executives last week, while the Commerce Department issued a new regulation that makes it harder for American companies to sell technology to the company. U.S. officials targeted the firm on the grounds that its involvement in the island-building amounted to complicity in a “neo-imperial” Chinese effort to infringe on Philippine territorial claims.
“If I find that any of those companies are doing business with us, then I would strongly recommend we terminate that relationship with the company,” Philippine Foreign Affairs Secretary Teodoro Locsin Jr. had said Friday. “If they were in any way involved in the reclamation, then it becomes consistent on our part to terminate any contract with them.”
Duterte’s rejection of that recommendation reflects his long-standing desire to make the Philippines a beneficiary of China’s vaunted Belt and Road Initiative, an overseas economic investment project.
“All of his China policy, and his U.S. policy for that, has been predicated on the idea that if he was just super nice to Beijing, there would be a windfall — China would reward him with investment and aid,” the Center for Strategic and International Studies senior analyst Gregory Poling said. “The problem for Duterte is that it’s now four years into his tenure and almost no Chinese projects have gotten off the ground … this Sangley port project is one of the few that might actually go somewhere.”
The American restrictions as written won’t have a significant practical effect on the construction company, analysts say, but Duterte’s decision to proceed with the deals could set the table for a more consequential dispute if the U.S. intensifies its crackdown on the CCCC’s supply chains.
“What happens if the U.S. decides to sanction suppliers to CCCC?” The Heritage Foundation’s Dean Cheng said. “I suspect that what Commerce is doing, and potentially State, is going to affect the spare parts supply chain for CCCC … that could then affect [the company’s] ability to work on a Philippines airport.”
In any case, Chinese officials are pleased with Duterte’s position. “The participation of Chinese companies and individuals in domestic construction activities is legitimate, lawful and beyond reproach, lies entirely within its sovereignty,” Chinese Ambassador to the Philippines Huang Xilian said. “We believe that the pursuit of an independent foreign policy is in line with the fundamental interests of the Philippines and its people.”
