By Kyle Aristophere T. Atienza, Reporter

THE PHILIPPINES should brace for increased tensions in the South China Sea and Taiwan Strait as Chinese President Xi Jinping uses nationalism to rally support for his regime amid an increasingly sluggish economy, geopolitical analysts said at the weekend.

China is expected to experience a long-term economic slowdown mainly due to declining export demand and domestic consumption. Its economy slipped into deflation as consumer prices declined in July for the first time in more than two years.

China’s slowing economic growth is also driven by years-long domestic issues such as its real estate problems and aging population, which have affected foreign investors’ confidence in the world’s second largest economy.

“In times of economic crisis, the Chinese military will act for a heroic mission as a façade to the world that Xi Jinping remains in control of his revisionist country,” Chester B. Cabalza,  founder of the Manila-based International Development and Security Cooperation, said in a Facebook Messenger chat.

“China might even stage a shooting war in the South China Sea as a wag-a-dog strategy to divert the attention of Chinese people from their financial woes and gather strong sentiment for nationalism,” he added.

Nontraditional security challenges such as the coronavirus pandemic and anti-China protests in Hong Kong before the global health crisis had not stopped China from enforcing its “rejuvenation policy of forcibly reclaiming and expanding territories,” Mr. Cabalza said.

“Amid the economic woes of China, President Xi Jinping will remain adamant on the People’s Liberation Army and Chinese Coast Guard’s battle-readiness in the South China Sea,” he added.

China has become more assertive in the South China Sea, making it more difficult for the Philippines, now considered as an Asian middle power, to ignore the situation.

On Aug. 5, the Chinese Coast Guard, backed by its maritime militia and People’s Liberation Army ships, fired water cannons at Philippine vessels trying to bring food and other supplies to a grounded ship at Second Thomas Shoal.

The shoal is about 200 kilometers from the Philippine island of Palawan and more than 1,000 kilometers from China’s nearest major landmass, Hainan Island.

“Beijing’s position in the South China Sea continues to harden despite economic setbacks at home,” said Lucio B. Pitlo III, a research fellow at the Asia-Pacific Pathways to Progress Foundation. “Far from slackening, I expect that posture to stiffen. Beijing is likely to call on its people and army to stay firm to weather these challenges.”

The Philippines this month filed a diplomatic protest against China over the water cannon incident, with countries including the US, Japan, Australia, South Korea and members of the European Union expressing concern.

China’s trade war with the US has instensified, with Beijing announcing last month export controls on two metals used in producing chips and solar panels, in an apparent response to years of trade restrictions by the US and allied countries aimed at restricting Chinese access to high-end semiconductor technology.

Enrico Cau, chief advisor for geopolitical affairs at the Taiwan Business Leaders’ Forum, said imposing more Western sanctions on China could lead to a violent reaction from the Xi regime and could spur a global security crisis.

“China’s economic slump is caused by a complex combination of economic and geopolitical factors over an underlying background rooted in the zero COVID policies that helped trigger a series of negative effects hitting several key sectors,” he said via Messenger chat.

He noted that China’s exports, manufacturing and property sectors as well as its labor force have been affected the most.

Foreign domestic investment is likely to be affected as well, Mr. Cau said, “as a result of China’s sharply veering away from pure economics and adopting a more security-oriented approach to domestic investment.”

DETERRENCE
He cited China’s recent anti-spy laws that include a whole-of-society approach to counterespionage. “While none of these issues per se is unsolvable, when combined with China’s deteriorating geopolitical situation both regionally and globally, the potential for growing domestic instability and escalation abroad could grow,” Mr. Cau said.

“While the risk of a full-fledged conflict in the region remains unlikely under the current conditions, decoupling and derisking processes, sanctions and other measures designed to contain China could result in escalating dynamics, both globally and regionally,” he added.

The Indo-Pacific region also has to contend with the conflict involving Taiwan, which China claims as its own. Taiwan is about 1,200 kilometers away from the Philippines. 

Mr. Cau said China would not give up on Taiwan and should the need arise, “it will go as far as needed to ensure the island does not become independent or ends up under foreign influence.”

“While also the risk of conflict is relatively low for now, real or perceived variations in a number of variables could potentially lead China to think that a coercive course of action is better than dialogue.”

An economic downturn could shrink China’s so-called “window of strategic opportunity” — the perceived period of maximum power relative to its objectives — said Gordian Knot Center for National Security Innovation fellow Raymond Michael Powell.

“If Xi Jinping believes this window closes sooner than he previously believed, it’s possible that he may try to force the Taiwan issue,” he said in an e-mail.

Deterrence becomes more urgent, and the US and its allies must convince Mr. Xi that resolving China’s security concerns by force would have devastating military, economic, diplomatic and humanitarian consequences and that “his legacy would not be that of a conquering hero but as the disastrous leader who lost a catastrophic war,” Mr. Powell said.

He said any conflict over Taiwan would affect the Philippines, even if it isn’t directly involved.

“Refugees — including over 150,000 overseas Filipino workers — will almost certainly pour across the Luzon Strait,” he said. “Economic activity with China will be severely curtailed if not stopped. Trade routes across the Indo-Pacific region will be severely disrupted.”

Mr. Powell said it would be very hard for the Philippines to stay out of such a war because it has a mutual defense treaty with the US, whose forces are very likely to become involved.

“While President Ferdinand R. Marcos, Jr. has ruled out offensive operations from EDCA (Enhanced Defense Cooperation Agreement) sites, what happens when the Philippines’ treaty ally is attacked by Chinese forces?” he asked. “The Philippines rightly expects US support if it is attacked, but the treaty is mutual by definition — it works both ways.”

Deterring conflict is very much in the Philippines’ interest, Mr. PowelI said, noting that efforts to expand its security network not only with the US but also with Japan, Australia and European countries “helps complicate Beijing’s strategic calculus.”

“Anything that sows more doubt in Xi’s mind that war could be in China’s national interest serves the cause of deterrence, and thus serves the Philippines’ national interest.”

Hansley A. Juliano, a political economy researcher studying at Japan’s Nagoya University, said bleak prospects for China’s economy could translate to any potential aggression “if China intends to bolster its economy by securing resources or maintaining economic hegemony over its neighbors to ensure that foreign patronage of Chinese products will make up for their other economic weaknesses.”

“That can indeed translate to greater pressures on Taiwan, possibly short of any invasion,” he said, adding that China has seen “what happened to territorially aggressive strategies the way Russia did it, and how it crippled its economy in turn.”

Mr. Juliano said the plan of the Peoples’ Liberation Army to recruit more graduates to help ease record joblessness among the youth was seen in imperial Japan’s recruitment during the Sino-Japanese War that led to World War II. “We remember how horrific that ended up.”