PH and China: Will economics trump politics?

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President Aquino welcomes Chinese President Xi Jinping for the APEC 2015 Economic Leaders Meeting.

Metro Manila (CNN Philippines) — At the geopolitical level, the Philippines and China have anything but a warm relationship. Neither side has given quarter in an ongoing territorial dispute over a portion of the South China Sea.

The Philippines continues to pursue an arbitration case in The Hague against China's nine-dashed line — a purportedly historical boundary that takes up roughly 85 percent of the South China Sea, and an estimated 80 percent of the Philippines' Exclusive Economic Zone (EEZ). China has refused to accept the arbitration and participate in the proceedings.

The friction has reached the point of name-calling. Last May, Chinese Foreign Ministry Spokesperson Hua Chunying called the Philippines "the real trouble-maker and rule-breaker in the region" for occupying Second Thomas Shoal in the Spratly Islands.

Tensions could rise even further. During his visit in Manila for this year's Asia-Pacific Economic Cooperation (APEC) leaders' summit U.S. Pres. Barack Obama pledged to transfer two more vessels from U.S. forces to the Philippine Navy a Hamilton-class cutter, similar to BRP Gregorio del Pilar, and a research vessel.

Chummy economics

And yet, China and the Philippines continue to have rosy relations at the economic level. According to figures from the Philippine Statistics Authority, China was the country’s second largest trading partner in 2014 with total trade worth $18.337 billion or 14.3 percent of the total trade.

About 13.6 percent of Philippine exports that year went to China. Likewise, 15 percent of imports came from China.

Philippine companies have also expanded their businesses to China. Jollibee Foods Corp, for instance, operates three fast food chains in that country — Yonghe King, Hong Zhuang Yuan, and San Pin Wang.

SM Prime operates five malls in China, spanning a total gross floor area of over 800,000 square meters, according to the company. The "Supermalls" are situated in Xiamen, Jinjiang, Chengdu, Suzhou, and Chongqing.

Both countries also have shared economic goals, as demonstrated during this year's APEC Economic Leaders' Meeting. Chinese President Xi Jinping made his first visit to the Philippines since assuming office in 2013. He donned the Barong Tagalog during the welcome dinner, and shook hands with President Benigno Aquino III.

During this year's APEC CEO forum, Eurasia Group President Ian Bremmer pointed out that both Aquino and Xi are the kind of leaders who "understand that they can actually take some decisions for the longer term", and focus on long term economic stability over playing the "nationalist card."

"Thank God. As challenging as the political relations are right now between the Philippines and China, both sides understand that the economic relations need to be strong — and they're not going to ruin that."

He added that the stability stems precisely from the dialogue provided by APEC. "I think that's one of the great strengths that APEC actually brings to the table today."