Xi suggests that China and the Philippines could take a "bigger step" in joint oil development

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Chinese President Xi Jinping will board his plane to depart from Manila's international airport in the Philippines on 21 November 2018.

Aaron Favila / The Associated Press

Chinese President Xi Jinping said that China and the Philippines could take a "bigger step" in the joint development of oil and gas resources in the South China Sea if they can adequately manage the dispute over sovereignty.

Xi made the remarks Thursday at a meeting in Beijing with Philippine President Rodrigo Duterte, whose largely pro-China foreign policy and reluctance to challenge his maritime assertiveness have prompted widespread internal criticism.

The visit comes in a recent surge in tension on several fronts, with Chinese ships challenging energy resources and the maritime borders of Malaysia, Vietnam and the Philippines.

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The United States has accused China of "coercive interference" and held $ 2.5 trillion of oil and gas in the region hostage, while the European Union said on Wednesday that it was worried about a deterioration in oil prices. maritime safety environment and suggested "mediation or arbitration" by third parties.

Britain, Germany and France on Thursday said they were concerned about the potential for "insecurity and instability" in the South China Sea.

On Friday, during a television press conference in Beijing, Duterte's spokesman, Salvador Panelo, said the president was resolute in raising the Philippines' concerns about China's maritime conduct, including the secret passage of his warships numerous times in the 12 miles of territorial sea of ​​Manila.

"He doesn't want it to happen again," Panelo said.

The fire brand leader also conveyed to Xi his desire for China to comply with a 2016 arbitration ruling that invalidated his claim to sovereignty over most of the South China Sea and clarified Manila's economic rights.

Duterte raised him in a way that "unequivocally, assertively but amicably" said Panelo, adding that Xi was not offended, but reiterated that China did not recognize the arbitration ruling and did not move on this.

Experts say that Duterte's reluctance so far to push the issue or build international support behind the application of the ruling has allowed China to consolidate its maritime power and to further expand its military resources on its artificial islands.

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A report on the state news agency Xinhua did not mention the sentence.

Xi urged the two sides to "put aside disputes, eliminate external interference and focus on conducting cooperation, making pragmatic efforts and seeking development".

"As long as the two sides will properly handle the South China Sea issue, the atmosphere of bilateral ties will be solid, the foundation of the relationship will be stable and regional peace and stability will have an important guarantee," Xi said.

The two sides could take a "bigger step" in the joint development of offshore oil and gas, Xi said.

This could be extremely complex and sensitive, however, as both countries claim jurisdiction over the Reed Bank, the main site of oil and gas reserves, despite the arbitration award stating that Manila had the sovereign right to exploit them.

The Philippines proposes a 60-40 sharing agreement in its favor.

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China's requests in the South China Sea, through which each year more than 3 trillion dollars are spent in the trade of ships, are disputed by Brunei, Malaysia, the Philippines, Taiwan and Vietnam.

Panelo also said that Xi told Duterte that he would appreciate it more if the Philippines could "eliminate" its China-centric gaming operations, which employ tens of thousands of Chinese workers and target online users in mainland China, where gambling is forbidden.

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