A budding Philippines-China friendship could boost chances of removing one of their biggest bones of contention in the South China Sea, Beijing's ambassador said Friday, as the two sides pursue broad business ties while still at odds over sovereignty.

Ahead of a high-profile visit to Beijing next week by Philippine President Rodrigo Duterte and at least 250 businessmen, China's ambassador to Manila, Zhao Jianhua, said there was common ground on the South China Sea that both sides could work from, including on the disputed Scarborough Shoal.

Duterte's rapprochement with China marks an astonishing reversal in Philippine foreign policy since July, when the Permanent Court of Arbitration (PCA) in The Hague ruled in favor of the Philippines in the South China Sea dispute.