China, Philippine Meeting Fails To Produce South China Sea Agreement

A much anticipated meeting between the presidents of China and the Philippines failed to end in an agreement regarding the South China Sea: a sensitive matter that has pitted China against all its neighbors around the sea.

Bloomberg reports Philippine President Rodrigo Duterte had been "steadfast" in his territorial demands for the basin, but, apparently, so has China's Xi, who said the two countries should aim to finalize the Code of Conduct in the South China Sea by 2021.

"Both President Duterte and President Xi agreed that while their variant positions will have to remain, their differences however need not derail nor diminish the amity between the two countries," a spokesman for Duterte said, adding that the two had reached an agreement "to manage the South China Sea issue, and to continue to dialogue peacefully in resolving the conflict."

Xi and Duterte have met several times since the Philippine president took office three years ago. Last year, the two countries set up a panel to seek ways to resolve the territorial dispute, which several years ago led to the Philippines suing China. The permanent Court of Arbitration in the Hague in 2016 ruled against China's claims and in favor of the Philippines. China however, has not acknowledged the ruling, which has heightened tensions in the area. Instead, it has continued with its agenda, according to which most of the sea is Chinese waters.

China claims as much as 90 percent of the South China Sea belongs to it and has proceeded to make its argument as pointed as possible without actually engaging in an open military confrontation. Most recently, the country targeted Vietnam with what Vietnamese source called intimidation tactics to discourage drilling off the Vietnam coast.

The South China Sea may hold 28 billion barrels of oil, according to an estimate from the U.S. Geological Survey from the mid-90s. Since then, with technology improvements, this figure could have increased substantially.

By Irina Slav for Oilprice.com

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