US: Reconsider deals with Chinese firms

US: Reconsider deals with Chinese firms

MANILA, Philippines — The United States has urged governments, parties and institutions around the world to assess the risk and reconsider business deals with “predatory” Chinese state-owned enterprises.

In a special press briefing through teleconference on Thursday, but whose trancription was released only yesterday, a senior official of the US State Department said the blacklisting of Chinese companies and Secretary of State Michael Pompeo’s announcement on the imposition of visa restrictions on Chinese individuals are in line with the new US policy on Chinese maritime claims in the South China Sea.

The State Department asked journalists to refer to the speaker only as “a senior official.”

“We aligned ourselves strongly with the 2016 international arbitral tribunal ruling on the South China Sea case between China and the Philippines, and we stated last month that Beijing is pursuing unlawful maritime claims across the South China Sea,” the official said.

“We made this clarification to strengthen our support for Southeast Asian coastal states in upholding their sovereign rights, and to reflect our deep concern over the increasingly brazen manner in which Beijing has deployed coercive tactics to inhibit other claimants’ access to offshore marine resources,” he added.

China, he added, has pursued environmentally destructive land reclamation and militarization of disputed outposts that have done irreparable damage to coral reefs.

Beijing also used these platforms in the South China Sea to coerce its neighbors and expand its maritime militia, he said. “These actions are provocative and destabilizing.”

“In the case of Mischief Reef and the Spratly Islands, which was determined by the 2016 arbitral tribunal ruling to be within the Philippines’ exclusive economic zone and on its continental shelf, Beijing’s development there – its building and militarization – is a violation of the Philippines’ sovereign rights and jurisdiction under the Law of the Sea Convention,” the official stressed.

Washington noted that Beijing’s state-owned enterprises have played a key role in building and militarizing key outposts.

“The US firmly opposes these efforts, and we are taking actions to make clear that further militarization and coercion is unacceptable and entirely contrary to the interests of China’s neighbors and the United States and the world,” the official said.

The US Commerce Department announced that it added 24 of Beijing’s state-owned enterprises, including subsidiaries of the China Communications Construction Company (CCCC), to the entity list for their role in the South China Sea activities.

According to the official, CCCC, which led the dredging in the South China Sea, is also one of the leading contractors used by Beijing in its global “One Belt One Road” strategy.

“Beijing has been trampling on the sovereign rights of its neighbors in the South China Sea with respect to access to marine resources and the like,” the official said. “

‘Scrap P100-B contracts’

State-owned Chinese firms reportedly involved in the construction of China’s artificial islands and military installations in the West Philippine Sea have over P100 billion worth of public infrastructure contracts in the country that the government must immediately scrap, Sen. Risa Hontiveros said yesterday.

The senator said she is pressing for the cancellation of government contracts with the Chinese firms following reports that China had launching ballistic missiles over the South China Sea that she warned could threaten stability in the region.

“It is disturbing that the government has engaged with Chinese companies involved in the destruction of our territories,” Hontiveros said in a statement.

She said the list of companies that contributed to dredging and construction of military islands in the WPS, as released by the US Department of Commerce, included the CCCC, a company whose subsidiaries have entered into several projects with the Philippine government.

“Based on the information available to us, the government currently has five memorandum of understanding (MOU) with this Chinese company (CCCC).  There are projects in Manila, Davao, Cebu, and Clark. These projects must not continue. If we continue with these deals, it may be equivalent to giving up our territories,” she said.

Hontiveros said CCCC’s subsidiaries have MOUs for the Davao Coastline and Port Development Project; Manila Harbor Center Reclamation Project; Cebu International and Bulk Terminal Project, and railway projects in Clark.

She said another Chinese company, China Harbor Engineering Co. (CHEC), also won a bid to build an access road to New Clark City.

The Davao Coastline and Port Development Project reportedly costs P40 billion. However, Davao City Mayor Sara Duterte-Carpio has reportedly backed out of the project as early as 2017.

Senators expressed support for the move of Foreign Affairs Secretary Teodoro Locsin Jr. to press for the termination of government infrastructure contracts with Chinese firms involved in the reclamation of artificial islands in the WPS.

Sen. Panfilo Lacson, Senate committee on national defense and security chair, praised Locsin for his call, saying “it’s long in coming by way of a statement coming as it does from our top foreign policy implementor.”

A senior administration lawmaker also expressed support to Locsin’s position that Manila should terminate its contract with Chinese firms. – Paolo Romero, Delon Porcalla