Table of Contents

I. Introduction .............................................................................................................................. 2
i. Background of the Study..................................................................................................... 2
ii. The Research Problems ...................................................................................................... 4
iii. Significance of the Study..................................................................................................... 6
iv. Scope and Limitations of the Study .................................................................................... 6

II. Review of Related Literature.................................................................................................... 6

i. The Economy-Security Relationship .................................................................................. 6
ii. The Anarchic Situation- ....................................................................................................... 6
iii. Realism and Steps to War Theory ....................................................................................... 6
iv. The Shift of Global Interests and Paradigm ........................................................................ 7

III. Theoretical and Conceptual Framework .................................................................................. 8

i. Theoretical Framework ....................................................................................................... 8
ii. The independent variable: Economic interdependence .................................................... 8
i. Trade intensity ....................................................................................................... 9
ii. Foreign Direct Investment .................................................................................. 10
iii. The dependent variable: Responses to Territorial Disputes............................................. 11
i. From A Perspective: Ways on how to view territorial disputes ......................... 11
ii. Fight or Flight: The possible responses to territorial disputes ........................... 11

IV. Asias Cauldron

i. Northeast Asia: Strategic Partnership albeit animosity .................................................... 12
i. China and Japan .................................................................................................. 12
a) Relationship on the Rocks....................................................................... 12
b) Towards A Mutually Beneficial Relationship Based on Common Strategic
Interest.................................................................................................... 13
ii. China and South Korea ........................................................................................ 14
a) Strategic Cooperation ............................................................................. 14
b) No problems despite problems ............................................................. 15

ii. Southeast Asia: On Opposite Paths................................................................................... 15

i. SPRATLYS: The islands that can launch thousand ships ...................................... 16
ii. Chinas stand: History is the Supreme Law ......................................................... 16
iii. China and Malaysia ............................................................................................. 16
a) Knowing thy priorities............................................................................. 16
b) Time to Rebalance? ................................................................................ 17
iv. China and Philippines: The Struggle between Diplomacy and Supremacy ....... 18
V. The China Choice..................................................................................................................... 20

VI. Conclusion ............................................................................................................................... 21

VII. Recommendation ................................................................................................................... 22

VIII. Acknowledgements ................................................................................................................ 23

IX. References............................................................................................................................... 24

X. Annexes ................................................................................................................................... 28
i. Interview Guide ................................................................................................................ 28
ii. Transcript of Interviews .................................................................................................... 29
i. Atty. Jay Batongbacal ........................................................................................... 29
ii. Prof. Richard Heydarian ....................................................................................... 35