Aquino’s big boo-boo at APEC: Snubbing our biggest trading partner

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President Benigno Aquino 3rd’s bungling in having the APEC event in Manila cost Filipinos horrendous traffic, P10 billion in taxpayers’ money, and tens of billions of pesos in foregone contract workers’ wages and business income.

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That is just the short-term cost. The worse, longer-term damage could yet be realized from the repercussions of Aquino’s cold-shoulder treatment of Chinese President Xi Jinping as though he was the head of some junior member economy of the Asia Pacific grouping.

Aquino ignoring Chinese President XI

Aquino ignoring Chinese President XI

No doubt as a sovereign nation we have to use all peaceful means to recover Scarborough Shoal, which, because of Aquino’s inept handling

China has been able to wrest from us in 2012. We also need to prevent China from ever attempting to get our Kalayaan Islands chain (especially the biggest, Pag-Asa Island). We also have to stop China from claiming the 200-nautical mile of seas as its exclusive economic zone surrounding the artificial isles it built over submerged shoals, which overlap with our own.

But we have to separate this issue over territorial claims from our economic relationship with China.

Most people, obviously this Administration, haven’t really noticed that China has become our biggest trading partner in just a decade’s time.

Whether we like it or not, what the US was to us as our biggest trading partner from the 1950s to the 1970s and Japan from the 1980s to the 1990s, China has been in the last few years and will be in this century, our dominant trading partner. While Japan could not translate its economic power in the region to military strength because its Constitution bans it from having a real armed force, there are obviously no such restrictions for China, with its excursions into the South China Sea giving it justification for its build-up of a military force in the region.

As the accompanying table shows, our total trade (imports plus exports) with China last year accounted for about 20 percent of our total trade, followed by Japan, with the US now just our third trading partner, and fast receding actually as a major trading partner.

PHILIPPINES TRADING PARTNERS 2014

% to PHL TOTAL
APEC BIG 6                       64.6
China                                   19.7
Japan                                   15.0
United States                      11.4
Singapore                             7.1
SKorea                                  6.0
Taiwan                                  5.4
APEC ASEAN                    12.3
Thailand                              4.6
Malaysia                              3.4
Indonesia                            3.0
Viet Nam                             1.3
Other APEC
members                            3.9
Other countries               19.2

Source: UNCTAD      

The APEC events would have been perfect for Aquino to focus on our economic relationship with China, to separate it from our territorial disputes. After all, it was an “economic cooperation” summit, not one like the ASEAN summit, which had a more open agenda.

Aquino, though, practically made it a party to show off his servility to the United States. President Barrack Obama even visited BRP Gregorio del Pilar, which the US Coast Guard handed down to our Navy and pledged two more similar hand-me-downs to the Philippines – vessels intended to put up a token fight with the Chinese in the West Philippine Sea. Obama’s actions were a clear message to China, delivered on what is supposed to be an economic cooperation meeting.

Other than a formal bilateral meeting with the US, the Philippines had such conferences with Korea, Australia, Canada, and even Chile, the latter three countries having insignificant economic relations with our country.

Aquino didn’t bother to ask for a bilateral meeting with China, which is not only our biggest trading partner but is now the biggest investment site for the country’s taipans, such as Henry Sy, who has set up several malls on the Chinese mainland, “Oishi” manufacturer Carlos Chan, who operates several noodles factories there, and tobacco magnate Lucio Tan.

There are, in fact, numerous issues that require negotiations with China, among them is one of our biggest problems: smuggling. The bulk of smuggled goods into the country, from agricultural products to appliances, to even coal, have been coming from China. I estimated these to amount to P1.3 trillion from 2010 to 2014, which means the equivalent of SM Stores’ sales for 10 years.  This also means foregone duties and value-added-taxes of P345 billion. (The “bulk of smuggled goods comes from China: P2 trillion from 2010 – 2014,” The Manila Times, Aug. 28, 2015).

China has not only become our dominant trading partner but one that practically monopolizes certain industries, as I will discuss soon in this space.

A sampler: more than 50 to 70 percent of our imports of garments and textiles, kitchen utensils, motorcyles, motor pumps, coal, vegetables, fruits and inputs for our semiconductor industry now come China.

Those advocating a “boycott-China-products” campaign should get a reality check, which is not too difficult, really. Just go to a big supermarket: half of its shelves would practically be empty if a boycott-China were in effect. Our biggest export – chip assembly – would trickle to a stop. More than half, or even more of household appliances, computers, laptops, smartphones and other infotech gadgets are shipped in from China.

It was a bad, bad idea for President Aquino to accord this Chinese guest such a shabby treatment. It’s a good thing he’s stepping down soon. But he will be leaving a legacy of such a herculean task for his successor to improve the country’s relations with our biggest trading partner.

Aquino’s lousy treatment of China’s leader could even be the worst thing he has done in office, if ever that superpower retaliates.

tiglao.manilatimes@gmail.com

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16 Comments

  1. China is indeed a major trading partner. BUT the trade is heavily skewed in their favor. We buy more from them than they do from us. The trade deficit in 2014 between Philippines and China was P2.3 billion.

    Over the last three years, our biggest investors (FDI) in the Philippines are Japan and USA. China does not figure in the stats significantly.

    President Aquino has to be admired for his handling of the issue. He has only the interest of our country deeply in his heart and mind. And the whole world is watching. Now how is he to treat the head of a state that bullies us and offends our pride and rights as a people and nation (or by analogy a neighbor who suddenly grabs essentially all of your backyard because he has a shotgun and you only have a slingshot)? Warmly hug him?

  2. Traffic ? With or without APEC its always traffic there. That Chinese president don’t speak English what is he going to say? Sign language where is his interpreter?

  3. China does not need to fight our navy or air force, They wont waste time on that. If China wants to destroy us, They just sent in here tons of shabu and thats it We’re finish.Much worst if they will dispose off those drugs for free. patay tayo.

    • You can’t trust the Chinese who are in the Politburo or Communist Party.
      Even their own people they do not trust. Millions of Chinese are still below poverty line.

      We need to stop buying from China. Full stop!, Other countries are doing this now. We should not feed the bears who will eat us one day.

      There was no Chinese product many years ago and we are number 2 in China next to Japan. Mr. Tiglao think hard!! China sends us low quality products. Have you visited the SM Malls in China? I tell you what not a single Philippine product is displayed. You call this fair?

  4. Do we not get what the temporary Tenant from Malacanang wants, simple to win the election for his fall back candidate Grace Poe since Mar Roxas is no way can win the election, nor the COMELEC and SMARTMATIC will do it for Mar Roxas without getting the ire of voters but still they will try not to get the ire of said Tenant, obviously to prepare: Here’s why

    The COMELEC and SMARTMATIC are laying the ground works for automatic cheating (daya) voting to be conducted in the private MALLS despite expressed provision of the law that it is illegal. Why in the Secret Offices of Private Mall owners the illegal transmission of manufactured votes can be transmitted easily. Added to this worrisome are the interest of the mall owners to their candidates for President who will make them more richer as dollar billionaires listed in the Forbes Magazine. Could they become NO. 1 this time ?

    This publicly nationwide suspect in bogus election of President Aquino was heavily relied on the PCOS and its CF Cards and MICROCHIPS. We know for a fact that one of the members of MAKATI BUSSINESS CLUB was the owner and worldwide manufacturer of microchips which parts can be found in our smart cellphones, computers and other electronic gadgets. NOW HOW CAN WE BE SURE OF CLEAN, HONEST, TRANSPARENT ELECTIONS IF THE COMELEC IS LAYING THE GROUND WORKS AS HAVE BEEN DONE IN 2010, 2013 ELECTIONS. MY GOODNESS VOTERS SPEAK OUT AND DONT BE MISLAID AGAIN BY COMELEC LIKE WHAT LOLO BRILLANTES DID BY DOING AWAY WITH SECURITY FEATURES AND STILL CLAIM HONEST, CLEAN, AND CREDIBLE ELECTION EVER. OH MY GOODNESS. . . . WHAT NAKAKAHIYA

    Now, that as early this present time the COMELEC should considers the manufacture of CF CARDS and MICROCHIPS designed be made in public and before its manufacture make sure the PRESIDENTIAL CANDIDATES will have representatives all the way from the designed, manufacturer, delivery, and distribution to the OFFICE OF COMELEC and further down to the Provinces, Cities and Municipalities. IF THE COMELEC CAN DO THAT THEN BY ALL MEANS WE SHOULD HAVE A CREDIBLE ELECTIONS. Not distributing same a WEEK before election day.

    NOW, IN THE ACT OF DESPERATION THE TENANT IN MALACANANG if not all of the above is not feasible another OPTIONS IS IN THE MAKING, a scenario of a shooting war in west philippine sea/south china sea against the MIGHTY CHINA AND THEN DECLARE MARTIAL LAW WITH THE CONCURENCE OF SENATE NOW UNDER CONTROL OF THE LIBERAL PARTY AND THE SAID TENANT. THEREAFTER, TO DECLARE REVOLUTIONARY GOVERNMENT JUST LIKE THE LATE CORY DID BE A DICTATOR, REMOVE THE VICE PRESIDENT AND CON CON TO SUIT HIS DESIRED AMENDMENT. PRESTO HE WILL NOT BE JAILED LIKE GMA, JPE, JINGGOY AND BONG AGIMAT, THEN CEASEFIRE WITH CHINA AND BILATERAL TALKS WITH CHINA.

    WHAT A CLEAVER SCENARIO

    • If the NPA can go burn those construction equipment, why don’t they instead go burn those PCOS machines?

  5. Gaucho McGringo on

    It is very tragic that Aquino and his administration seem to think that the US, and its allies are more important than China to the future of the Philippines. This way of looking at things is so wrong….. Genuflecting to Obama and his minions will prove to be counterproductive at best.

    Why is it that Filipinos cannot understand that the US is in terminal decline, and that this decline is evident not just in the fact that the country has been asset stripped for the last 30 years, but also you should accept the fact that the US no longer has the best military hardware in the world? IMHO, the leaders of this country should be trying to develop a credible defense posture *WITHOUT* the aid of the US. You should build your defenses by purchasing weapon systems from neutral countries, while at the same time, maintaining a neutral foreign policy, refraining from entering into defense treaties with the US, a country that is well on its way to implosion, and future third world status.

  6. Bert O. Romero on

    1. Hosting APEC was a masochistic self-inflicted pain we could have done without. Hosting APEC is not mandatory – the Philippines volunteered to host it four years ago. Unlike other regional forums , ASEAN , for one, where hosting is alphabetically arranged and is obligatory, APEC’s is on a voluntary basis designed to give the host the opportunity to wave its flag and boast that it has arrived economically. Vietnam, Papua New Guinea, Hong Kong and others have not hosted APEC but it cannot be said that the Philippines is better off than any of them. The issues of traffic inconvenience, P10 billion unworthy investment, billions worth of lost business, employment and other opportunities, creditable security arrangements with the deployment of tens of thousands of policemen coming all the way from the various corners of the country would not have arisen if we simply did not volunteer to host APEC this year.
    2. The so-called benefits from hosting APEC are illusory than real. US giving RP two aged vessels (not for free, mind you, but under the usual foreign military sales agreement), Japan promising to further open its employment markets to Filipina maids, and imagined inflow of foreign investments are ” achievements ” which have been paved through bilateral negotiations and not necessarily through APEC.
    3. APEC is a dying regional economic forum. It’s demise will officially come once the US – led Trans Pacific Partnership (TPP) and China’s Free Trade Area for Asia and Pacific ( FTAAP) come into being next year. The fact that the world’s two leading economies have taken the initiative in forming these two regional forums for the same region for which APEC was originally founded in 1989 speaks volume on the inutility of APEC.

  7. Gone are the ambitions of Tulfo to get a cabinet or ambassadorial position from Binay. Binay will NOT be the president of the Philippines. Tulfo should ask his boss Binay to explain the hidden wealth of Binay deposited in Canada thru his dummies which were confirmed by ALMC.

    • Your statement is misleading. the article was about pinoy and china, and the effects of boycotting Chinese products. Your comment was focused on tulfo and binay. Where did it come from? you must go to a forum that talks only about tulfo and binay because that is not the topic in this article. Boy, you must hate tulfo and binay so much, and I guess you have proofs of the statement you released, about binays money in Canada? if you want to hide money, why not in Switzerland where their banking laws are different? or the cayman islands. whew, you must have plenty of knowledge that the rest of us don’t know, or, you must be listening to the gossipy mouth of trillanes and pinoy’s minions. oh boy, facts only please, I am not voting but, be factual not gossipy.

  8. That’s simply how PNoy acts: very servile to the US and plays tough with big neighbour China. China has the largest standing army and most modernising navy in the world and our ukay-ukay ships and trainer fighter jets can’t match them.

    He should have used the APEC forum to build up our economic relations with China, most of our business taipans are Tsinoy anyway; leave the other concern because he has brought it to the UN court already.

  9. PNoy just exposed further how vindictive he is. Obviously, PNoy does not think and makes his personal issues as basis of his actions. Insanity keeps in prevailing in PNoy’s persona.

  10. Aquino knows he can not serve two masters. His lousy treatment of China’s Pres. XI firmly assures that the Philippines relationship with the US is as strong as ever. Aquino could be aware also that China’s Pres. XI is just a messenger of the powerful shadow group Triad, the group behind those mega-casinos Resorts World, the military council, and the influential Li family, which are the real power in China.

    Aquino, I think is not what a lot of his critics think he is. This guy is a street smart cold assassin and knows who his political enemies are.

  11. “It was a bad, bad idea for President Aquino to accord this Chinese guest such a shabby treatment. It’s a good thing he’s stepping down soon. But he will be leaving a legacy of such a herculean task for his successor to improve the country’s relations with our biggest trading partner.”

    Kung si Gloria Macapagal-Arroyo bago bumaba ng Malacanang ay nagsabi na itatayo niya ang pundasyon para ang susunod na presidente ay hindi mahirapan sa pagpapatakbo ng economy at gobyerno, si Noynoy ay ibang klase.

    Mas gusto ni Noynoy na mahirapan ang susunod na Philippine president at matutuwa pa siya.

    • Leodegardo Pruna on

      Ganoon na nga. Dumadaloy sa dugo ang ganoon pagpapasya at paggawa. Pagpalain tayo ng Panginoon.

  12. Those two hand me down boats from US which were built in the 1960’s are nothing compared to Chinese’s nuclear modern vessels. I’m not pro-chinese but what I’m trying to say is that we must talk to China (using President Jinping’s UN speech) about this very big issue and settle for mutual good. Try to watch President Jinping UN Assembly 2015 speech on YouTube.