This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

South China Sea Flare-Up Pits China Against the Philippines Over Oil, Shipping Lanes

Shipping lanes used by international marine carriers including Neptune Orient Lines (NOL:Singapore) and Maersk Line (MAERSK-B:Copenhagen) will not be any more affected now than before. Six governments claim all or parts of the ocean, but usually focus on tracts where they have material holdings such as oil contracts or military bases rather than interfering with passing traffic.

Because the Philippines knows it's militarily weaker than China -- ranked 37th vs. third in conventional military might -- it will not get into scuffles at sea, says Eduardo Araral, professor at the Lee Kuan Yew School of Public Policy under the National University of Singapore. But Manila may take up Beijing's offer for two-way talks on the sea dispute, Araral says.

Growing ties with China's fellow superpower the U.S., plus the request for UN arbitration, would strengthen its bargaining position. The U.S. state department quickly expressed support for Manila's filing for UN dispute resolution, a move likely to irk fellow superpower China.

"I'm sure China will do something symbolic to squeeze the Philippines, and I'm sure the Philippines has factored in that cost already, but in the future of course the relationship will further go south unless the Philippine government does something more," Araral says.

"The next move is for the Philippines to have a formal talk with Beijing," he says. "[President Benigno] Aquino has got a few good chips with him so he can directly talk to the Chinese."

At the time of publication, the author held no positions in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

At the time of publication, the author held no positions in any of the stocks mentioned.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.25 -0.14%
FB $81.66 -0.67%
GOOG $542.45 -1.00%
TSLA $187.51 -0.67%
YHOO $44.13 -0.69%

Markets

DOW 17,698.18 -77.94 -0.44%
S&P 500 2,059.69 -8.20 -0.40%
NASDAQ 4,880.2280 -20.6570 -0.42%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs