China-Philippine economic ties stable

By Ma Jingjing Source:Global Times Published: 2017/2/28 23:28:39

Duterte’s stance, joint plans strengthening bilateral ties: expert

Chinese tourists board a boat in Dumaguete in the Philippines on January 30. Photo: IC

The economic relationship between China and the Philippines is expected to post stable development, given increasing Chinese investment in the Philippines under the One Belt and One Road initiative and rapid bilateral trade growth driven by free trade agreements.

A total of 40 joint projects worth billions of dollars are expected to be signed during an upcoming visit by China's new commerce minister Zhong Shan to the Philippines, media reports said.

Zhong, who was appointed head of the Ministry of Commerce (MOFCOM) on Friday, is expected to visit Manila next week, the Manila Times reported on Monday, citing Philippine Ambassador to China Jose Sta. Romana.

A number of the joint projects will start by the end of the year, and China is seeking to build more industrial parks in the Philippines, according to the Manila Times report.

The development marks the strengthened bilateral trade ties between the two countries since Philippine President Rodrigo Duterte took office. Duterte has taken a friendlier stance on China than his predecessors, famously announcing his country's "separation from the US" and the formation of new commercial ties with China during a trip to Beijing last year.

With such a tone, along with the inclusion of the Philippines into the Belt and Road initiative and other joint plans, the bilateral economic relationship will continue to be stable, said Yuan Bo, a research fellow at the Chinese Academy of International Trade and Economic Cooperation under the MOFCOM.

The Philippines has great growth potential, but the country is in urgent need of investment in sectors including manufacturing, agriculture and infrastructure construction, Zhao Jianglin, an expert on Southeast Asia affairs at the National Institute of International Strategy of the Chinese Academy of Social Sciences, told the Global Times on Tuesday.

"The Southeast Asian country has surplus labor due to an underdeveloped manufacturing industry. In this regard, China may consider building an industrial park in the Philippines, helping the country develop its local manufacturing sector," she said.

George Siy, chairman emeritus of the Association of Young Filipino-Chinese Entrepreneurs, told the Global Times on Tuesday that Chinese entrepreneurs that come invest in the Philippines still focus on utilities like transportation and power generation. But he believes Chinese investment in the manufacturing sector is set to increase thanks to the country's low costs and skilled workers.

Bilateral trade also remains stable between China and the Philippines. In 2016, trade volume between the two countries reached $47.2 billion, up 3.3 percent from the year earlier, data from the General Administration of Customs showed in January.

In October 2016, the two nations signed agreements on agricultural cooperation during Duterte's visit to Beijing while China resumed fruit shipment from 21 blacklisted Philippine exporters and permitted the exporting of mangoes to China.

Improved China-Philippine ties will also boost the Philippine tourism sector. The country plans to attract 1 million Chinese visitors in 2017 with measures including issuing arrival visas, carrying out more promotions and increasing charted flights, Singapore-based news portal reported in February, citing Philippine tourism official Wanda Teo.

A note sent by online travel agent Lvmama Tourism to the Global Times on Tuesday showed that the number of Chinese visiting the Philippines increased more than 300 percent year-on-year in the first two months of 2017.

Challenges remain

Though both sides have stepped up efforts to promote bilateral economic and trade ties, challenges remain for Chinese companies investing in the country, experts noted.

The MOFCOM announced the investment of 30 projects worth $3.7 billion in the Philippines to alleviate poverty in January.

A manager at a central government-controlled enterprise told the Global Times that Chinese companies are taking a wait-and-see attitude toward the implementation of these projects, though they hope to take part in the program. "We can't get loans from domestic banks before the Philippine side provides sovereignty guarantee. Besides, the Philippines may not be able to pay back the loans after we finish the projects," he said.

The Philippines' power supply shortage, corruption and lack of funding channels as well as terrorist attacks are additional obstacles for Chinese investors, Zhao noted.

blog comments powered by Disqus