http://www.isn.ethz.ch/news/sw/details.cfm?id=10864

China courts Philippines in energy quest

ISN SECURITY WATCH (02/03/05) - China has extended military assistance
to the Philippines for the first time in years, boosting bilateral
relations between the two countries as China seeks a stronger foothold
in the region.

The two sides signed off on the military assistance deal at a meeting
in Beijing on Wednesday, where Filipino Foreign Secretary Alberto
Romulo ratified the November 2004 memorandum of understanding on
defense cooperation with China.

Chinese Prime Minster Wen Jiabao urged improved cooperation between
the two countries, while Romulo said the Philippines welcomed "China's
increasing role in regional and international affairs", news agencies
reported.

China promised the Philippines US$1.2 million in military equipment.
Observers are viewing the deal as part of China's efforts to increase
its influence in Southeast Asia, which has traditionally been
dominated by the US.
In another significant development on Wednesday, both countries
settled the long-standing dispute over the oil- and mineral-rich
Spratly Islands (also known as Nansha) in the South China Sea, and
agreed to turn the region into an area of "cooperation, peace, and
development [�] instead of a flash point".
Experts also observed the latest developments as part of China's quest
for energy security. China is the world's second largest consumer of
oil, after the US. China also accounts for 40 per cent of the world's
crude oil consumption growth since 2000.

The Spratly Islands consist of more than 100 small islands containing
vast gas and oil deposits. The islands are partially claimed by the
Philippines, Brunei, and Indonesia, and fully claimed by Vietnam,
Taiwan, and China.
In November 2002, all the claimants had signed a "declaration on the
conduct of parties in the South China Sea", which has somewhat eased
the tensions, but fell short of a legally binding code of conduct.
Nearly 50 of the small islands are occupied by military forces from
the various nations, with the exception of Brunei. In 1988, more than
70 Vietnamese troops died during a skirmish with Chinese naval forces
at Johnson Reef.

However, China has expressed its willingness to discuss the
exploration of the islands' oil and gas reserves on the basis of
mutual respect, equality, and reciprocity.
Oil companies in China and the Philippines recently signed an
agreement on energy exploration in the Spratly Islands, in which both
sides agreed to research ocean earthquakes and evaluate oil resources
in disputed waters, sparking concern from the other claimants.
Vietnam warned that the joint study could violate the 2002 code of
conduct. But Chinese and Filipino officials say the conflict has been
resolved.
"The disputes and conflicts are all over now and this refers to
[other] countries which claim the South China Sea territory," China's
Xinhua news agency quoted Romulo as saying.
(By Animesh Roul in New Delhi)








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