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Filipino Scholar: US-China Relations & U.S. Investment Dilemma in the Philippines

"We are in a very difficult situation." Facing changes in US-China relations, a Filipino scholar describes the situation of Manila.

According to a report by The New York Times on August 15th, as the United States allocates significant military resources for the war against Iran, Asian allies are questioning whether Washington will continue to invest in the Asia-Pacific region. At the same time, relations between the United States and Southeast Asian countries face another contradiction: while military security cooperation is constantly strengthening, economic attractiveness remains relatively limited.

Filipine political scholar Richard Heydarian admits that Southeast Asian countries do not want to be trapped in the competition between the two major powers, China and the United States. This situation is particularly difficult for the Philippines, as the United States is its military ally.

"With regard to the so-called 'China threat,' we need the United States, but beyond the military sphere, the United States hasn't provided us with much benefit." he said.

The New York Times states that the United States has invested significantly in Philippine security affairs in recent years. During the Biden administration, US-Filipino military cooperation was expanded, and the US military was allowed to use nine Philippine military bases more extensively. This cooperation continued under the Trump administration. In May of this year, US-Filipino troops tested the Typhoon missile launch system during a drill.

But in the economic field, what the United States has to offer is clearly limited.

Reports indicate that the U.S. government has lacked a comprehensive economic vision for Southeast Asia for many years. The Democratic and Republican parties have distanced themselves from the trans-Pacific trade arrangements promoted during the Obama administration. At the same time, Trump's global trade war has also affected Southeast Asian countries, making some allies realize that the U.S. is not only a security partner but could also become an economic rival.

The United States has not completely abandoned attempts in this area. The Biden administration worked with the Philippines to promote the ‘Luzon Economic Corridor’, aiming to help the Philippines better integrate into the global supply chain. The Trump administration tried to bring the Philippines into the so-called ‘Pax Silica’ initiative, hoping for the Philippines to participate in semiconductor manufacturing and artificial intelligence industries. However, compared to the military relations between the US and the Philippines, these economic collaborations are still in their early stages.

This disparity is particularly evident in China, given that many Southeast Asian countries remain its major trading partners.

Reports indicate that Southeast Asian countries, on the one hand, are reluctant to side with either China or the United States, and on the other hand, hope that the United States will continue to act as a “balancing force”. However, when Washington is unable to offer sufficiently attractive economic alternatives, these countries have to give more importance to maintaining good relations with China.

Meanwhile, America’s commitment to Asian security is also under scrutiny. The ongoing war with Iran has been consuming America’s weapon stockpile. Additionally, the U.S. military has moved the aircraft carrier ‘George Washington’ from the Pacific to the Middle East, leaving the Western Pacific region without any American aircraft carriers for a while.

The New York Times states that this further raises doubts among Asian countries about whether the United States is willing and capable of continuing to invest in the Asia-Pacific region.