Chinese Aftershock

China’s rhetoric with its neighbors has improved. But the Philippines and Vietnam aren’t taking chances.

Since the midsummer slump in its relations with the Philippines and Vietnam, China has been taking diplomatic steps to repair the damage. Despite nationalistic calls for China to “think ahead and strike first” at Philippine and Vietnamese forces, as the reliably demagogic Global Times tub-thumped back in September, Beijing has been charting a much wiser course. After agreeing a new set of guidelines for implementing the declaration of conduct (DOC) in the South China Sea with ASEAN in July, with a formalized code of conduct still to come, China hosted Philippine President Benigno Aquino for fence-mending talks in early September, and received Vietnamese Secretary General Nguyen Phu Trong a month later.

However, while the tone of the diplomatic exchanges has certainly improved, the after-effects of their run-in with the region’s rising superpower are still crystallizing in Manila and Hanoi. For the Philippines came the realization that their military was hopelessly ill-equipped to protect the country’s interests against pretty much any regional armed forces, let alone the People’s Liberation Army. And for Vietnam, it was apparent that the military modernization strategy that had already been set in train should not only continue, but should be prosecuted more enthusiastically than ever.

These, then, are the predictable consequences of China’s pushy few months in the South China Sea. This week, South Korean President Lee Myung-bak has been in Manila, and Aquino has been pressing him on the acquisition of Korean military equipment, including ships and aircraft. Lee reciprocated by providing $500 million in soft loans: South Korea is already forging an important defense relationship with Indonesia, and a potentially lucrative opportunity with another Southeast Asian partner is now apparently there for the taking. In particular, the Philippines urgently needs to re-equip its air force’s currently aircraft-less combat arm, and it may be that Aquino is tapping the South Koreans to help make that happen. The Philippine Navy also badly needs new ships: South Korea builds those, too.

Earlier this month, the Philippine Navy announced procurement progress on another front, saying that it was close to completing a deal for a second ex-U.S. Navy cutter (the first having been acquired in August). We may be witnessing the beginning of a quiet U.S. effort to re-equip the Philippine military with surplus kit, which is exactly what some in Washington have been lobbying over for some time. While 40-year-old cutters aren’t about to give the Philippines a navy that can match China’s, they will at least provide the country with some sort of functioning deterrent – something it sorely lacks at the moment. Manila is also stumping up modest procurement funds of its own, meaning that the long-neglected Armed Forces of the Philippines may finally be able to move ahead with capability plans that have been starved of funds for far too long. The Philippine commanders, next time they meet their Chinese counterparts at a regional summit, really ought to buy them a beer.

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Vietnam, meanwhile, announced this week a $3.3 billion defense budget for 2012 – a 35 percent increase over the previous year’s budget, which was itself officially a 70 percent rise on 2010. While these figures are open to interpretation, given the absence of transparency surrounding the country’s defense spending (which is probably already far more than the advertised $3.3 billion), the upwards trend is easy to credit. Bear in mind the parlous state of the Vietnamese economy, which is being dragged down by debt and rampant inflation, and the sustained emphasis on defense spending underlines the fact that Hanoi remains highly uncomfortable in China’s close company.

As with the Philippines, part of the solution has been to strengthen alliances. In September, Vietnam boosted its defense ties with Germany, before deepening strategic relations with India, Russia, the UK, and the United States in October and November. It’s easy to see China’s outline through this flurry of diplomatic activity.