It Looks Like This Nation Is Letting China Take Over in the South China Sea

The Philippines is letting China gain ground in the South China Sea.

On Aug. 16, a flotilla of Chinese military vessels surrounded Sandy Cay, a Philippine land territory west of the island nation in the disputed maritime region.

Soon after, on Aug. 19, one voice emerged in outcry.

"Sandy Cay is a Philippine land territory that is being seized (to put it mildly), or being invaded (to put it frankly), by China," Philippines Supreme Court Senior Associate Justice Antonio Carpio said, according to QZ on Aug. 22.

Carpio alleged that Beijing was attempting to secure more land in the complicated and multifaceted South China Sea saga.

The South China Sea Saga Can Be Boiled Down to the Number Three

That's how many trillions of dollars - $3.37 trillion specifically - of global trade flow annually through the waters deep with oil, natural gas, hydrocarbon, and fish stocks. China claims sovereignty over the entire region, and the various small nations within have long said, "Not so fast, that's our land."

In fact, it was the Philippines that took China to international court over the regional dispute.

And the Philippines, on July 12, 2016, won its case in the Permanent Court of Arbitration in The Hague.

One might assume then that Carpio's warnings would have been one of many from members of the Filipino government.

But that wasn't the case.

In fact, Filipino legislators - even President Rodrigo Duterte - are sticking up for the Red Dragon.

Here's why...

Philippine Government Isn't Up for a South China Sea Fight

On Aug. 21, President Rodrigo Duterte said China had assured him that it will not invade Sandy Cay.

"They are just there, but they are not claiming anything," he added, according to Asia News Network that day.

A day later, Philippines Foreign Minister Alan Peter Cayetano backed up Duterte. "The mere presence of the Chinese ships is no cause for alarm despite the lack of details that we give you," Cayetano said, according to Philstar Global on Aug. 22.

Cayetano went on to assure the public that the matter would be resolved through diplomatic channels.

south china sea

But we're not convinced...

That's because Beijing's fleet blocked a vessel from the Philippine Bureau of Fisheries and Aquatic Resources from accessing the area, according to QZ.

That very blockage dredges up memories of when China fully controlled the nearby Scarborough Shoal and blocked local ships from access as well.

Must See: The South China Sea is about to get violent. But thanks to a small $6 U.S. defense firm with a top-secret new technology, China is about to be taken to the woodshed.

Cayetano did say that the Philippine government was protesting China's presence... but that citizens just couldn't see these alleged protests taking place.

In reality, however, Philippine leaders could have more incentive to let China push its boundaries...

An End to the South China Sea Dispute with a Private Deal

You see, Manila's government and Beijing shelved their maritime disputes last year after Duterte's election on June 30, 2016 - about two weeks after The Hague issued its ruling.

There's good reason to believe China bargained with the new president to give up his fight. And that Duterte accepted a deal.

On May 8, 2017, China pledged $24 billion in aid and investment to the Philippines.

There's another factor that may be behind Duterte's capitulation to China - one born of sheer practicality...

The Philippines Just Can't Beat China

When asked what he would do should Justice Carpio's proclamations about China seizing Sandy Cay come to fruition, Duterte gave a rather diffident reply.

He said the Philippines simply cannot afford to confront China, an economic and military powerhouse.

"We will not win," Duterte said, according to ABS CBN News. "It would be a great sacrifice. I'm a realist. Don't push me into the realm of impossibility."

Life-Changing Profits: This investing strategy has racked up 24 triple-digit wins so far this year - and 42 in the last 12 months. To learn how to get in position for the next one, click here now...

Such a defeatist statement from the president of the Philippines surely gives China added confidence to keep plowing ahead in the South China Sea.

Here's how to profit when America steps in - and it will...

How to Profit as China Aggresses into the South China Sea

Money Morning Executive Editor Bill Patalon has been watching Beijing's movements for years. In fact, he's been following developments in the "Asian arms race" for three decades.

And thanks to his updates and insight, Bill has kept readers of his subscription service, Private Briefing, abreast of the latest matters so they can position themselves to profit.

On Aug. 17, Bill told his readers that "Beijing isn't looking for true give-and-take cooperation. It isn't looking for what the China Daily refers to as 'the dedicated efforts of China and ASEAN to resolve their differences through dialogue.'"

Indeed, in the South China Sea, Beijing's idea of cooperation is "you cave in and agree to let us do whatever we want."

It looks like that's precisely what the Philippines is doing.

Bill also knows that the United States won't let China have its way.

Which could one day lead to a U.S.-China war, ASEAN nations be damned.

Time and again, Bill has recommended that his Private Briefing subscribers invest in the companies that will quite literally shield America from enemy weapons in the years ahead.

One such firm is the Boeing Co. (NYSE: BA).

When Bill first recommended Boeing, it was trading at $61.92.

Today, the aircraft manufacturer is trading at $236.85.

That's a 282% increase.

On Aug. 14, Bill said, "In general, Boeing sees 'strong and resilient' growth over the next 20 years."

That could have been an understatement...

Because back on June 20, Boeing raised its 20-year industry forecast for plane deliveries from 29,530 jetliners to 41,030, with their value at list prices topping $6 trillion for the first time ever.

Check out more of why Bill predicts Boeing will make you a lot of money by clicking here...

Follow Money Morning on FacebookTwitter, and LinkedIn.

Related Articles:

Money Morning: 10 Times We Narrowly Avoided World War 3

[mmpazkzone name="end-story-hostage" network="9794" site="307044" id="138536" type="4"]