Could joint oil and gas projects help ease Beijing and Manila’s South China Sea tensions?

China and the Philippines have been encouraged to resume joint South China Sea energy exploration as a means of easing tensions in the disputed region. According to a recent joint report by Chinese and Philippine analysts, published by the Shanghai Institutes for International Studies, the collaboration between the two nations could serve as a viable initial project.

This would not only address the Philippines' energy requirements but also diminish the tension between the two parties due to unilateral actions, thereby promoting regional security and stability. Moreover, the report suggests that resolving the lack of trust and confidence between China and the Philippines, arising from the disparity in their military and economic strength, could also be achieved through joint projects.

Earlier this month, Philippine President Ferdinand Marcos Jr. indicated that there was a "distinct possibility" of undertaking joint oil and gas exploration with China, expressing his hope to "reset" relations. In March, Marcos declared a national energy emergency due to the US-Israeli attack on Iran. However, despite signing a memorandum of understanding on oil and gas cooperation in 2018, little advancement has been made.

The ongoing territorial dispute between Manila and Beijing in the South China Sea continues to overshadow their relationship, with frequent clashes between their coastguards at disputed features like Scarborough Shoal and Second Thomas Shoal. The report argues that while the Philippine constitution mandates full control over natural resources, it does not preclude the scope for joint oil and gas exploration in the disputed areas.

The authors propose identifying and pursuing economic projects serving their shared interests and having low security implications to build trust. Marine environmental protection is identified as the area with the greatest potential for cooperation, characterized by low political sensitivity, high consensus, and practical feasibility.