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As the U.S. expands its bases, will the Philippines be able to maintain a balance with China?

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The Philippines granted the United States expanded access to its military bases on Thursday.

The defense ministries of both countries announced Washington would be granted access to four more regions under the 2014 Enhanced Defense Cooperation Agreement (EDCA).

The agreement was reached during a visit by U.S. Defense Secretary Lloyd Austin, who visited South Korea earlier this year to bolster deployment of advanced weapons such as fighter jets and bombers to the Korean Peninsula, also to deploy more military forces and weapons in the Philippines.

In a joint announcement, the Philippines and the United States agreed to accelerate the full implementation of the Enhanced Defense Cooperation Agreement, which aims to support combined training, exercises, and interoperability between the two countries.

As part of the agreement, the United States has allocated $82 million for infrastructure improvements at five existing EDCA sites and has expanded its military presence to four new regions in “strategic areas of the country,” according to the statement.

New bases target China

The statement did not specify where the new areas would be. The former Philippine military chief told Reuters that the United States had previously requested access to bases on the island of Palawan, which overlooks the disputed Spratly Islands in the South China Sea and the northern land mass of Luzon, the Philippines’ closest region to Taiwan.

Philippine military officials and defense experts said some government officials were concerned that news about these locations would anger China.

According to an analysis published in the Global Times, Luzon and Palawan are very close to the Taiwanese island of Nansha, respectively, and “the intention of targeting China could not be more obvious.”

More recently, U.S. forces have intensified and expanded joint training focusing on combat readiness and disaster response with Filipino troops on the nation’s west coast, which faces the South China Sea, and in its northern Luzon region.

Enhanced Defense Cooperation Agreement (EDCA)

The EDCA allows U.S. access to Philippine military bases for joint training, pre-positioning of equipment and the building of facilities such as runways, fuel storage and military housing, but not for a permanent presence.

Austin said: “This is not about permanent basing, but it is a big deal, it is a really big deal… This is an opportunity to increase our effectiveness, increase interoperability.”

The Philippines was home to two largest U.S. Navy and Air Force bases outside of the American mainland. However, after the Philippine Senate refused to extend the use of the bases, they were closed in the early 1990s.

Although American forces returned for large-scale combat exercises with Filipino troops under a 1999 Visiting Forces Agreement, they could not obtain a base. The Philippine Constitution forbids the permanent establishment of foreign troops and their involvement in local combat.

The 2014 EDCA allowed U.S. forces to pre-position equipment and return forces in Philippine military bases, but Marcos’ predecessor, Rodrigo Duterte, had suspended the practice to maintain closer ties with China.

After Marcos was elected president, Joe Biden was the first foreign leader to call to congratulate Marcos, and senior Washington officials visited the Philippines regularly.

Manila’s balance policy

Washington is keen to expand its security options in the Philippines against China, while Manila aims to strengthen its defenses against disputed territorial claims in the South China Sea and a possible escalation in the Taiwan Strait.

A senior White House official told the Financial Times the initiative was “part of their strategic efforts across the region,” stressing that it was very important to Biden.

The Philippines sees the United States as a crucial counterweight to China in the region, and Washington has pledged to come to the defense of the Philippines if Filipino forces, ships, or aircraft come under attack in the contested waters.

On the other hand, the Philippines is trying to pursue a policy of not taking sides between China, its largest trading partner, and the United States. Philippine President Marcos’ visit to China last month was an indication that Manila is seeking to maintain ties with Beijing. Marcos also reiterated his commitment to the “one China” policy in a recent private interview with the Financial Times.

That’s why Philippine officials insisted ahead of Austin’s visit that military cooperation with the United States “does not target any third party.”

The Philippines is critical to Washington

However, the revival of the defense relationship with Washington by Philippine President Marcos could change this balance policy. The U.S. is using the same stick on the Philippines that it uses on the Asia-Pacific countries – the “China threat”.

The Biden administration is pushing the idea that if Beijing challenges the Philippines’ control over the disputed islands in the South China Sea or attacks Taiwan, the Philippines will be at risk of becoming part of the battlefield.

In this context, Austin said during the visit that the United States and the Philippines are “committed to strengthening their mutual capacities to resist armed attack” and stressed that these defensive efforts are important against China’s influence on the South China Sea.

Lisa Curtis, an Indo-Pacific expert at the Washington-based CNAS think tank, also stressed that the Philippines’ position is critical to the entire U.S. alliance system in the Indo-Pacific. In the event of a dispute over Taiwan, Washington would certainly see Manila as a staging ground for logistical support and U.S. forces, Curtis said.

Meanwhile, the Philippine president is reportedly traveling to Japan next week to expand security and trade cooperation between Manila and Tokyo.

Beijing has voiced concerns about Marcos’ visit to Japan, according to two people familiar with the discussions, highlighting the challenge the Philippines faces in trying to balance its economic interests with China and its relations with the United States and its allies.

The extent to which the Philippines can successfully maintain the balance policy in the face of the attack attempt that the U.S. and NATO have pursued so far in the Asia-Pacific through the “Chinese threat” discourse remains a question.

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China launches patrols east of Taiwan after Japan and Philippines open maritime boundary talks

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Beijing said it had conducted law enforcement patrols in waters east of Taiwan in response to a decision by Japan and the Philippines to launch talks on maritime boundary delimitation.

According to a statement from the China Coast Guard, a flotilla led by the vessel Daishan carried out law enforcement patrols “in accordance with the law” on Monday.

China Coast Guard spokesperson Jiang Lue said the operation was “a necessary action” in response to Japan and the Philippines “unilaterally announcing the start of negotiations on maritime delimitation in waters east of China’s Taiwan Island.”

“Such an announcement seriously infringes upon China’s territorial sovereignty and its maritime rights and interests,” Jiang said.

“We urge Japan and the Philippines to immediately cease all illegal actions that violate China’s sovereignty and rights,” he added.

Jiang also said the coast guard would continue strengthening its control and management of the relevant waters and that China would take concrete measures to “resolutely safeguard territorial sovereignty and maritime rights and interests.”

The United States and most of its allies, including Japan and the Philippines, do not recognize Taiwan as an independent state and acknowledge it as part of China. The United Nations has also adopted resolutions reflecting this position. However, Washington continues to provide arms to Taiwan as part of its broader efforts to counter China and encourages its allies to do the same.

Following a summit in Tokyo between Japanese Prime Minister Sanae Takaichi and Philippine President Ferdinand Marcos Jr., the two countries said in a joint statement issued on Thursday that they had agreed to begin “formal negotiations” to delimit their exclusive economic zones (EEZs) and continental shelves.

Beijing condemned the planned talks as “completely illegal and invalid” and swiftly lodged formal diplomatic protests with both Tokyo and Manila.

Chinese Foreign Ministry spokesperson Mao Ning said on Friday: “The so-called delimitation negotiations are entirely illegal, invalid and void. They will have no impact whatsoever on China’s claims or on China’s exercise of its legitimate rights in the area east of Taiwan Island.”

The latest escalation comes at a time when relations between Beijing and both Tokyo and Manila are already strained. Japan and the Philippines are treaty allies of the United States, while China remains engaged in separate territorial disputes with Japan in the East China Sea and with the Philippines in the South China Sea.

As US attention and resources have increasingly shifted toward the war involving Iran, and as the White House has made the Western Hemisphere a strategic priority, Japan and the Philippines have stepped up diplomatic engagement in the region commonly referred to as the Indo-Pacific.

That effort has included building closer security and defence ties with other countries, prompting Beijing to accuse them of encouraging bloc confrontation in the region.

Japan and the Philippines do not share a maritime boundary. However, their seabed claims could overlap because both countries seek to extend their legal continental shelves beyond 200 nautical miles, equivalent to 370 kilometres or 230 miles.

The overlapping area lies east of Taiwan, southwest of Japan’s Ryukyu Islands and north of the Philippines’ Batanes Islands.

Yang Xiao, a researcher at the Chinese Academy of Social Sciences, China’s highest-ranking state-affiliated think tank, said Taiwan’s EEZ and continental shelf are part of the area under discussion.

“These are China’s rights and are not something that the two sides can negotiate among themselves,” Yang said.

In an interview published on Sunday by Yuyuan Tantian, a social media account affiliated with state broadcaster CCTV, before the China Coast Guard announced the patrols, Yang said Beijing would take “historic and unprecedented” countermeasures against Tokyo and Manila.

“Since they are negotiating in a three-party overlapping zone, we can also take further steps to advance our jurisdiction in the waters east of Taiwan,” Yang said.

“If the other side insists on reckless and destructive actions, we will inevitably introduce new countermeasures.”

Yang described the waters east of Taiwan as a vital maritime area for the island’s economic activities.

“If these waters are divided between Japan and the Philippines, that would clearly harm the interests of the people living on Taiwan Island,” he added.

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SoftBank overtakes Toyota to become Japan’s most valuable company

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As artificial intelligence reshapes industrial structures in Japan and South Korea, stock market rankings are being redrawn. SoftBank Group has overtaken Toyota Motor to become Japan’s most valuable listed company.

SoftBank shares have surged as the global artificial intelligence rally gathers momentum, lifting the technology conglomerate’s market capitalisation above that of Toyota for the first time in more than two decades.

The shift reflects a broader reordering of Japan’s equity market. Automakers, alongside banks, steelmakers, energy companies and other traditional heavy industries, are losing ground to chipmakers and companies linked to artificial intelligence.

SoftBank shares jumped 14% on Monday, reaching a new record high. The company’s market value climbed to 48 trillion yen, or $301 billion, making it the most valuable company listed on the Tokyo Stock Exchange.

Toyota had long held the top position, with a market capitalisation of approximately 45 trillion yen. The last time SoftBank surpassed Toyota was in March 2000, at the peak of the dot-com bubble.

SoftBank’s rapid rise has been driven by strong earnings performance and its substantial investment in ChatGPT developer OpenAI.

The Japanese company reported net profit of 1.82 trillion yen, or $11.4 billion, for the first three months of 2026, 3.5 times higher than in the same period a year earlier. The group is also increasing its investment in OpenAI, completing a $10 billion investment in April and committing to invest an additional $20 billion later this year. Total investment is expected to reach roughly $65 billion.

According to The Wall Street Journal, OpenAI plans to file for an initial public offering and aims to list in the United States as early as September. Some media reports suggest the company could seek to raise $60 billion through the offering, potentially valuing it at more than $1 trillion. Such a transaction could become the largest initial public offering in history.

Investors expect the IPO to significantly boost SoftBank’s investment gains. Those expectations have helped drive the technology group’s share price higher. SoftBank shares have risen about 127% since early April.

The company is also planning to invest up to 14 trillion yen in the construction of data centres in France.

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China and Serbia agree to expand cooperation in emerging sectors

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Chinese President Xi Jinping met Serbian President Aleksandar Vucic in Beijing, where the two leaders discussed bilateral ties and oversaw the signing of multiple cooperation agreements. Xi also awarded Vucic the Friendship Medal of the People’s Republic of China.

The meeting between Xi Jinping and Aleksandar Vucic began with an official welcoming ceremony at the Great Hall of the People in Beijing.

The two leaders then proceeded to formal talks. Xi said China and Serbia had achieved “positive results” since jointly launching the construction of a “China-Serbia community with a shared future in the new era” in 2024.

Xi said the partnership had not only benefited the two peoples but had also set an example for international relations.

The Chinese president described relations between China and Serbia as an “iron friendship” based on deep historical ties and mutual trust.

Calling on both sides to strengthen exchanges, deepen practical cooperation and continue supporting each other on issues concerning their core interests, Xi also said the two countries should align their development strategies and advance cooperation under the Belt and Road Initiative. In this context, he pointed to transport, energy and infrastructure projects.

Xi also called for expanding cooperation in emerging sectors such as artificial intelligence, the digital economy, green energy and advanced manufacturing.

Aleksandar Vucic congratulated China on the start of implementation of its 15th Five-Year Plan. Vucic also expressed confidence in China’s future development under Xi Jinping’s leadership.

The Serbian president said Belgrade attached great importance to relations with China and firmly supported Beijing on issues concerning China’s core interests.

Vucic thanked Chinese companies for their contributions to Serbia’s economic development and infrastructure construction.

Saying the two countries had made notable progress since establishing their comprehensive strategic partnership, Vucic added that cooperation had expanded across numerous sectors.

The Serbian president also praised China’s role in international affairs, saying Beijing approached smaller countries on the basis of equality and respect and defended international law.

Following the talks, the two leaders witnessed the signing of more than 20 cooperation agreements covering politics, trade, science and technology, education, legal affairs and culture.

The two sides also issued joint statements on steadily advancing the construction of a China-Serbia community with a shared future in the new era and jointly supporting the implementation of four global initiatives.

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