Pair of Chinese firms eye Subic Bay shipyard, causing alarm in the Philippines
By SETH ROBSON | STARS AND STRIPES Published: January 14, 2019
The Chinese are seeking a commercial foothold in a strategic port that was once the United States’ largest naval facility in the Far East.
A pair of Chinese firms are in the running to buy a massive shipyard in Subic Bay from South Korea’s Hanjin Group, local media reported Saturday.
The harbor, once known as Naval Base Subic Bay, was home to thousands of U.S. sailors and their families before the Navy left in 1992. It’s still a regular port call for U.S. warships and Marines who practice beach landings nearby in Zambales province.
Subic’s importance has grown in recent years amid Chinese efforts to build military facilities on artificial islands and claim sovereignty over territory to the west in the South China Sea.
News about the Chinese investment plans was met with alarm by former Philippines navy chief Vice Adm. Alexander Pama, who wrote about them Saturday on Facebook.
“This is a VERY SIGNIFICANT NATIONAL SECURITY ISSUE! The ownership of Hanjin shipyard in Subic bay will give the owners unlimited access to one of our most strategic geographic Naval and Maritime asset,” he said.
“Although it is a commercial shipyard, nothing can prevent the owners from making it into a de-facto Naval base and a maritime facility for other security purposes! Let us all be aware and wary of the serious security and other strategic implications of this issue! I urge our patriotic business community and the government not to allow Hanjin Shipyard to fall into the wrong hands!”
Hanjin Philippines has defaulted on $412 million in loans, owes $900 million to South Korean creditors and recently declared bankruptcy, according to the Philippine Daily Inquirer newspaper.
But the Chinese need a local partner in order to take control of the shipyard, said Patricio Abinales, a Philippines expert at the University of Hawaii.
The concern is that a partner might be associated with Philippines President Rodrigo Duterte, who has sought closer ties to China, he said.
“The Chinese are dangling money but Filipinos are mainly loyal to the U.S.,” he said. “There’s sentimental loyalty of Filipinos about Subic but probably Duterte will just ignore that.”
Relations between the U.S. and the Philippines have warmed since hitting a low-point in 2016 when Duterte hurled insults at President Barack Obama. However, there doesn’t seem to be much urgency to fully implement an agreement to build facilities for U.S. forces visiting the country with few projects announced after four years.
China has set up commercial and military operations in other places where U.S. forces operate overseas.
In 2015, as U.S. Marines were building a rotational presence in Australia’s Northern Territory, the government granted a 99-year lease for the Port of Darwin to a Chinese company.
That same year the Chinese acquired a 99-year lease on a failing Sri Lankan port near Indian Ocean shipping lanes that had been financed with Chinese loans.
In 2017, the People’s Liberation Army Navy established its first overseas base in the African nation of Djibouti just a few miles from Camp Lemonnier.
The U.S. and its allies engaged in diplomacy in numerous small South Pacific nations last year to head off Chinese efforts to establish a presence in that part of the world.
Brad Glosserman, a China expert and visiting professor at Tokyo’s Tama University, said everything China does is being seen through a prism of bilateral competition with the United States.
“I’m not going to lose any sleep over this, but a lot of people are going to be up in arms about it,” he said of the Subic plans. “Duterte’s not going to be president for life.”