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International relations

China to fund $940m Philippine railway linking former US bases

Beijing pledges to donate vaccines on top of infrastructure support

The amphibious assault ship USS Wasp (LHD 1) sits along a pier in Subic Bay during a port visit. Subic Bay is the site of a former U.S. Navy base. (Photo courtesy of the U.S. Navy)

MANILA -- The Philippines and China have sealed a deal for a $940 million freight railway project that will link two former U.S. military bases in the Philippines, the Chinese Embassy in Manila said on Saturday.

The railway represents the biggest Chinese government-funded project in the Philippines to date and underlines Beijing's growing role as Manila's infrastructure funder under President Rodrigo Duterte's administration.

"Our cooperation continues! China and the Philippines just signed the commercial contract for the Subic-Clark railway project," Chinese Ambassador to the Philippines Huang Xilian said on Facebook.

Huang's announcement came during Chinese Foreign Minister Wang Yi's visit to the Philippines, the last leg of a Southeast Asian tour that also included Myanmar, Indonesia and Brunei.

Wang's diplomatic engagements, which centered on pledges for infrastructure funding and coronavirus vaccine donations, came ahead of U.S. President-elect Joe Biden's inauguration next week.

A statement from Duterte's office said that Wang had "announced the finalization" of the Subic-Clark Railway Project agreement "this week."

Philippine Foreign Affairs Secretary Teodoro Locsin Jr., left, and Chinese Foreign Minister Wang Yi bump elbows during a meeting in Manila on Jan. 16.   © Reuters

The Chinese ambassador said the construction of the 71-kilometer, single-track freight railway will take 42 months. "Once completed, the railway will build resilient linkages between the commercial zones along the Subic-Clark corridor," Huang added. "Glad to see the improvement in logistic efficiency and other economic activities in the region."

Subic Bay was the site of a former repair and supply base for the U.S. Navy's 7th Fleet. The site is now the Subic Special Economic and Freeport Zone. Clark Air Base was a U.S. Air Force base that is now used by the Philippine Air Force. It is also home to the Clark Freeport and Special Economic Zone.

Official statements from Manila's Finance and Foreign Affairs departments did not specifically mention the contract signing for the railway project.

A file photo taken in 1986 shows U.S. aircrew preparing an F4 fighter for take off at Clark Air Base in the Philippines. The former base is now a special economic zone.   © Getty Images

The Department of Finance said both countries "signed an agreement on economic and technical cooperation," which grants Manila 500 million yuan ($77 million) "to support the implementation of infrastructure projects and other development initiatives of the Duterte administration."

According to the Department of Foreign Affairs, Wang said China planned to donate 500,000 doses of coronavirus vaccine to the Philippines in line with President Xi Jinping's commitment to Duterte. The Philippines had earlier secured 25 million doses of Chinese company Sinovac Biotech's CoronaVac.

A statement from Duterte's office said: "Foreign Minister Wang underscored China's commitment under President Xi Jinping to work closely with the Philippines to sustain the positive trajectory of the valued and special bilateral relations."

Ties between Manila and Beijing have improved since Duterte came to power in 2016. The Philippine president has won investment pledges and infrastructure funding from Beijing as he put both countries' South China Sea territorial dispute on the back burner.

In September, the president's spokesperson said the Philippines will push ahead with infrastructure projects backed by Chinese companies that have been blacklisted by the U.S.

Last month, Duterte threatened to end the U.S. Visiting Forces Agreement if millions of vaccines against COVID-19 are not delivered to the Philippines.

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