Wednesday, April 27, 2005
The Philippines and China: A Bad Match
President Gloria Arroyo acted as excited as a schoolgirl with the prospect of refereeing the dispute between China and Japan. The thought that a minor player like the Philippines might sit down at the same table as Asia’s two giants, even momentarily, was almost too much to comprehend.
And with China’s President Hu Jintao making a state visit, what more could a girl dream of? But there was more. China has ‘promised’ to invest billions of pesos in the Philippines newly opened, but financially starved mining industry. Malacañang Palace was proud to state that the Philippines established relations with China 30 years ago. The Philippines and China: a match made in heaven.
But is this the right match? Are President Arroyo and the Philippines pursuing the wrong suitor?
The role of those of Chinese ancestry in the Philippines is important and unique. When other countries speak of open and sometimes violent hostility between the “locals” and the Chinese, they need only turn history back a few decades. In the Philippines, it has been centuries since the two societies viciously clashed. Although the taipan groups of “Chinoy” and those of Spanish heritage view each other suspiciously at times, the wheels of commerce and community turn smoothly for the most part.
However, this is not about the local social and economic order. This is about the international economic relations of the nation of which all Filipinos of every different blood and background have vital stakes.
Given a choice between strengthening bonds with China or Japan, the Philippines would be much wiser to choose Japan and not China.
Malacañang refuses to accept and deal with the fact that China invaded, occupied, and stole Philippine territory in the South China Sea. The Spratleys may be worthless outcroppings or the gateway to boundless treasure. It does not matter. Those atolls and islands are Filipino property as much as the ground on which the President walks each day. China’s conduct and treatment of the Philippines shows their inconsistency and lack of honesty in their conduct of foreign relations.
To view China and Japan similarly in our economic relations is a disaster for the nation. Madame President, listen well: China is a business COMPETITOR; Japan is a buying CUSTOMER. Fifteen years ago, ninety percent of all Christmas ornaments and decorations sold in the United States were imported from the Philippines. Now that ninety percent comes from China. The same trend occurred with Philippine garments and shoes.
Major investments in the Philippine mining industry are greatly welcomed. However, the profits from these ventures will go to support the Chinese mining sector back home. The Philippines needs to attract investment from Canada, Australia, and the United States whose mining industries are mature and not in need of capital like China’s. Then the investments will remain in the Philippines to develop new projects, not used to rehabilitate obsolete Chinese mines.
A free trade agreement with China is not in the best interests of the Philippines. Japan unlike the Philippines is a rich nation: China is not. China will not in the near future be a major buyer of Filipino goods and services. A free trade agreement with Japan is an excellent development for the Filipino economy as they need and want Philippine services and manpower.
The continuing and historic breakdown in Sino-Japanese relations might be the best thing that could happen to the Philippines. Arbitrate it? It would be in our best self-interest if the Philippines could aggravate it.
Tensions between these two giants is nothing new; it is centuries old in fact and in the last thirty years, each time relations sour, the situation worsens. Japan has very substantial business interests in China that are now at risk like never before. The Japanese will not jeopardize their investments.
China is quietly encouraging Chinese employees of Japanese companies based in China to cause problems and dispute production. Already, very high-level discussions between the government and Japanese businesses are progressing, talking about moving these factories out of China to the Philippines. Japan will not wait until the next deterioration of relations and see their investments expropriated or harmed in China. They will move out and the Philippines is best on their list for relocation.
A recent Business Sentiment Survey by the Japan External Trade Organization showed Japanese companies’ outlook on the Philippines for investment turned positive while all other countries rated negative in future investment outlook. That is not a coincidence.
The President would serve the nation better by stopping her fawning over China. China does not need the Philippines today or tomorrow. As in personal life, choose partners with whom a long-term relationship is mutually beneficial. You can trust those relationships.
On a personal note, author and former Secretary of Tourism, Gemma Cruz-Araneta and I begin a new project, a daily radio show, “Gemma and John: Home in the Philippines”. Easy and interesting conversation with ideas and features designed for your lifestyle. Every weekday from 5 to 6 p.m. on DZRJ 810 AM. I hope you will join us.
And with China’s President Hu Jintao making a state visit, what more could a girl dream of? But there was more. China has ‘promised’ to invest billions of pesos in the Philippines newly opened, but financially starved mining industry. Malacañang Palace was proud to state that the Philippines established relations with China 30 years ago. The Philippines and China: a match made in heaven.
But is this the right match? Are President Arroyo and the Philippines pursuing the wrong suitor?
The role of those of Chinese ancestry in the Philippines is important and unique. When other countries speak of open and sometimes violent hostility between the “locals” and the Chinese, they need only turn history back a few decades. In the Philippines, it has been centuries since the two societies viciously clashed. Although the taipan groups of “Chinoy” and those of Spanish heritage view each other suspiciously at times, the wheels of commerce and community turn smoothly for the most part.
However, this is not about the local social and economic order. This is about the international economic relations of the nation of which all Filipinos of every different blood and background have vital stakes.
Given a choice between strengthening bonds with China or Japan, the Philippines would be much wiser to choose Japan and not China.
Malacañang refuses to accept and deal with the fact that China invaded, occupied, and stole Philippine territory in the South China Sea. The Spratleys may be worthless outcroppings or the gateway to boundless treasure. It does not matter. Those atolls and islands are Filipino property as much as the ground on which the President walks each day. China’s conduct and treatment of the Philippines shows their inconsistency and lack of honesty in their conduct of foreign relations.
To view China and Japan similarly in our economic relations is a disaster for the nation. Madame President, listen well: China is a business COMPETITOR; Japan is a buying CUSTOMER. Fifteen years ago, ninety percent of all Christmas ornaments and decorations sold in the United States were imported from the Philippines. Now that ninety percent comes from China. The same trend occurred with Philippine garments and shoes.
Major investments in the Philippine mining industry are greatly welcomed. However, the profits from these ventures will go to support the Chinese mining sector back home. The Philippines needs to attract investment from Canada, Australia, and the United States whose mining industries are mature and not in need of capital like China’s. Then the investments will remain in the Philippines to develop new projects, not used to rehabilitate obsolete Chinese mines.
A free trade agreement with China is not in the best interests of the Philippines. Japan unlike the Philippines is a rich nation: China is not. China will not in the near future be a major buyer of Filipino goods and services. A free trade agreement with Japan is an excellent development for the Filipino economy as they need and want Philippine services and manpower.
The continuing and historic breakdown in Sino-Japanese relations might be the best thing that could happen to the Philippines. Arbitrate it? It would be in our best self-interest if the Philippines could aggravate it.
Tensions between these two giants is nothing new; it is centuries old in fact and in the last thirty years, each time relations sour, the situation worsens. Japan has very substantial business interests in China that are now at risk like never before. The Japanese will not jeopardize their investments.
China is quietly encouraging Chinese employees of Japanese companies based in China to cause problems and dispute production. Already, very high-level discussions between the government and Japanese businesses are progressing, talking about moving these factories out of China to the Philippines. Japan will not wait until the next deterioration of relations and see their investments expropriated or harmed in China. They will move out and the Philippines is best on their list for relocation.
A recent Business Sentiment Survey by the Japan External Trade Organization showed Japanese companies’ outlook on the Philippines for investment turned positive while all other countries rated negative in future investment outlook. That is not a coincidence.
The President would serve the nation better by stopping her fawning over China. China does not need the Philippines today or tomorrow. As in personal life, choose partners with whom a long-term relationship is mutually beneficial. You can trust those relationships.
On a personal note, author and former Secretary of Tourism, Gemma Cruz-Araneta and I begin a new project, a daily radio show, “Gemma and John: Home in the Philippines”. Easy and interesting conversation with ideas and features designed for your lifestyle. Every weekday from 5 to 6 p.m. on DZRJ 810 AM. I hope you will join us.
// posted by john mangun @ Wednesday, April 27, 2005 
