As Chinese President Hu Jintao greeted his Philippine counterpart Benigno Aquino in Beijing recently at the start of a state visit, the official Xinhua news agency laid out terms for a sustained improvement in relations between the world’s second biggest economy and its much smaller and weaker Southeast Asian neighbor.

The agency said it had to be acknowledged that a stable and sound bilateral relationship should be underpinned not only by strong trade ties but also by commitment to a proper settlement of maritime disputes in the South China Sea, where Beijing’s sweeping claims are disputed not only by the Philippines but also by Vietnam, Malaysia and Brunei.

“China has always made itself loud and clear that it has indisputable sovereignty over the seas’s islands and surrounding waters, which is part of China’s core interests,” Xinhua said. “That is based on unambiguous and undeniable historical facts.”

Two days earlier, on Aug. 29, as Yoshihiko Noda awaited confirmation as Japan’s new prime minister, Xinhua had set out China’s terms for better relations with Tokyo.

Among the series of conditions, was that Japan “respect China’s core interests” in the East China Sea, where Beijing claims to be the rightful owner of the Senkaku Islands administered by Japan. It calls them the Diaoyu Islands.

Xinhua added that Beijing was willing to shelve differences and jointly explore with Japan for oil, natural gas and other resources in the waters and seabed surrounding the islands, “on condition that Tokyo recognized China’s complete sovereignty over the archipelago.”

The labeling by Xinhua of both the South and East China seas as Chinese “core interests” appears to raise Beijing’s assertion of jurisdiction over contested islands, waters and seabed in the region to a new level.

After senior U.S. officials said they were told by Chinese counterparts last year that the South China Sea was a “core interest” on a par with Taiwan and Tibet, Beijing evidently dropped the term because of the alarm raised in Asia. It implied that China was prepared to use force or the threat of force to secure control of vast swathes of strategically vital maritime territory off the east coast of Asia.

The South and East China seas are separated by Taiwan. Xinhua’s bracketing of the two seas as Chinese “core interests” suggests that Beijing is hardening its position as it seeks to complete what it regards as China’s legitimate post-1949 reunification under communist rule.

Of course, proclaiming territorial rights and enforcing them are two different things.

Even though the new Japanese government is riven by factionalism and grappling with difficult economic problems, it is unlikely to be a pushover for China. Prime Minister Noda is committed to strengthen Japan’s alliance with the United States as a counterweight to China’s rise.

He wrote in a Japanese magazine article published last month that China’s “high-handed foreign posture, backed by its military capabilities and recently put on display in the South China Sea and elsewhere, is stoking fears that China will disrupt the order within the region.”

The Aquino administration in the Philippines has also turned to its U.S. ally for support to counterbalance China. But President Aquino has just returned from Beijing with a swag of promised Chinese economic support to expand trade, investment and jobs that are urgently needed in the Philippines.

Whether he will tilt China’s way remains to be seen. The acid test will be whether Manila proceeds with plans to invite local and foreign energy companies to carry out offshore exploration in a part of the disputed Spratly Islands in the South China Sea that Beijing also claims.

In its effort to secure Southeast Asian compliance, China has been focusing its diplomatic and other pressure on the Philippines and Vietnam because they stand in the immediate way of its southwards push into maritime Southeast Asia.

Beijing is wielding checkbook diplomacy by promising the struggling economies of both countries major economic benefits in the form of greatly increased Chinese trade, investment and tourism.

In the case of the Philippines, Beijing is playing on Aquino’s ethnic Chinese ancestry while seeking to exploit the disproportionate commercial influence of Chinese Filipinos.

In the case of Vietnam, China is playing on its political affinity and ideological links with the ruling Vietnamese Communist Party in Hanoi.

China’s State Councillor Dai Bingguo, the top foreign policy adviser to Chinese leaders, is visiting Vietnam this week to co-chair the Guiding Committee for China-Vietnam cooperation with Deputy Prime Minister Nguyen Thien Nhan. Relations sank to their lowest point in years in May and June, after China said it opposed oil and natural gas exploration off Vietnam’s coast in areas covered by the Chinese territorial claim encircling about 80 percent of the South China Sea.

At the height of the tension, Chinese vessels several times interfered with survey ships operating inside what Vietnam says is its exclusive economic zone (EEZ).

After high-level talks, China said in late June that it had reached a consensus with Vietnam to solve South China Sea disputes through friendly consultations and avoid making moves that might aggravate or complicate the issue.

If Beijing can induce Vietnam and the Philippines to accept its terms for managing their offshore conflict, it will then be easier to negotiate similar deals with the two more southerly claimants in the South China Sea, Malaysia and Brunei, as well as with Indonesia, Southeast Asia’s largest economy and the current chair of ASEAN.

Although Indonesia does not claim any of the disputed islands in the South China Sea, the Chinese claim overlaps the EEZ that extends northward from Indonesia’s Natuna Island.

Michael Richardson is a visiting senior research fellow at the Institute of South East Asian Studies in Singapore.

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