China and the Phillipines enjoy a long history of collaboration and are important regional trading partners. Since diplomatic relationship was established in 1975, economic relations between the two countries have been increasing steadily. In 2015 bilateral trade volume hit a new high of almost US$46 billion, representing a growth rate of 2.7 per cent. China is now the second biggest trading partner of the Philippines.

However, the South China Sea issue has been a major obstacle to this relationship. An arbitration on the region initiated by the Philippines in 2013 was viewed by China as contrary to the UN Convention on the Law of the Sea. China is seeking to reach joint development and cooperation through peaceful dialogue, based on agreements with ASEAN countries.