Exclusive: China may give Filipino fishermen access to Scarborough - sources

By Benjamin Kang Lim and Ben Blanchard BEIJING (Reuters) - China will consider giving Filipino fishermen conditional access to disputed waters in the South China Sea after the presidents of the two countries meet in Beijing this week, two Chinese sources with ties to the leadership said. Philippine President Rodrigo Duterte plans to raise the plight of Filipino fishermen when he meets his Chinese counterpart, Xi Jinping, on Thursday, a Philippine official told Reuters. China seized Scarborough Shoal - claimed by Beijing as Huangyan island and by Manila as Panatag - in 2012, denying Philippine fishermen access to its rich fishing grounds. The seizure formed part of a case the Philippines took to the Permanent Court of Arbitration in the Hague, which in July rejected China's territorial claims over much of the South China Sea, including its assertion of a 200-mile (320 km) exclusive economic zone around the disputed Spratly Islands. China immediately declared the ruling "null and void" but said it was time to get talks started again between the countries directly involved in the territorial disputes to reach a peaceful resolution. Arriving at his hotel in Beijing, Duterte told reporters he expected to achieve "plenty of happiness for my country" during his trip to China. Asked about the South China Sea dispute, he said: "No, that is not one of the topics on the agenda. It might crop up but it is going to be a soft landing for everyone. No impositions." "EVERYBODY CAN GO" Beijing is now considering making a concession to Duterte, whose rapprochement with China since taking office on June 30 marks an astonishing reversal in recent Philippine foreign policy. "Everybody can go, but there will be conditions," one of the Chinese sources who speaks regularly with senior officials told Reuters, referring to Chinese and Filipino fishermen. Asked what the conditions were, the source said: "The two countries would have to form working groups to iron out details." It was unclear, however, if China would agree to joint coastguard patrols. The sources did not say what, if anything, China might demand from Manila in exchange for the fishing concession. "It will be a return to the Arroyo days," the second Chinese source said, referring to the administration of former President Gloria Macapagal Arroyo (2001-2010), when fishermen from both countries had access to waters near Scarborough Shoal. If all goes according to script, fishery cooperation would be one of more than 10 broad framework agreements the two countries would sign during Duterte's visit, the sources said, without giving further details. The Philippine foreign ministry said it had "no comment at this time". FREE NAVIGATION China has overlapping claims in the South China Sea with Brunei, Malaysia, the Philippines, Taiwan and Vietnam. The United States, along with Japan and other powers, want to ensure Beijing doesn't interfere with free navigation in the strategic South China Sea, which connects the Indian and Pacific Oceans and through which flows $5 trillion of trade a year. U.S. Navy ships have conducted "freedom of navigation" operations around artificial islands China has been building in the disputed Spratly Islands, which mostly consist of coral reefs and tidal features in the South China Sea. Chinese Foreign Minister Wang Yi did not answer directly, when Reuters asked on Tuesday whether China would offer any concessions to the Philippines on the South China Sea, including fishing rights around Scarborough Shoal. "China's position on the South China Sea is clear and consistent. There is no change and there will be no change. This position accords with historical facts and international law," Wang said at a news conference with his New Zealand counterpart. "HISTORIC VISIT" Wang, however, was upbeat about Duterte's trip. "This will be a historic visit and a new beginning in China-Philippines relations," the foreign minister said. China's ambassador to Manila, Zhao Jianhua, said last Friday a budding bilateral friendship could boost chances of removing one of their biggest bones of contention in the South China Sea. But on Sunday, Duterte said he would raise the Hague ruling and vowed not to surrender any sovereignty, comments that will not sit comfortably with Beijing. Philippine Supreme Court senior associate justice Antonio Carpio warned that Duterte could be impeached if he gives up the country's sovereignty over the Scarborough Shoal, according to Philippine media. China's objective is to jointly develop resources in the South China Sea with its neighbors, said Lu Xiang, an international relations expert at the Chinese Academy of Social Sciences, a government think-tank. "Disputes with any neighbor are not conducive for China," he said, when asked what China wanted in exchange for any concession to Duterte. "We need a better external environment," Lu said. Graphic: The Scarborough Shoal - http://tmsnrt.rs/2bW92hC (Additional reporting by Natalie Thomas; Editing by Bill Tarrant)