Economic preparation of the environment: A selective empirical analysis of Chinese investment in the Philippines

Abstract

Over the past decade, the People's Republic of China has increasingly used its economic might as a means of influence to pursue grand strategic objectives that some scholars believe are aimed at countering U.S. presence and influence in the Asia-Pacific region. This thesis examines two aspects of Chinese economic strategy, foreign direct investment and development aid, in the context of the Philippines, which represents the primary U.S. foothold in the region. Using geospatial, link, and social network analysis techniques to examine a data set of Chinese investments in the Philippines from 2006 to 2016, this thesis attempts to answer the following question: What evidence does China's investment in the Philippines contribute to the understanding of China's grand strategic objectives? We find that these Chinese investments support and expand China's ability to monitor and control South China Sea access points, and provide interpersonal channels for Chinese influence over Philippine decision-making through the cultivation of allies within the economic arena. We recommend that U.S. diplomatic and defense officials view these and other Chinese international investments as a type of economic preparation of the environment designed to establish access/forward presence and build strategic relationships for future military and/or diplomatic exploitation.