AS years of strained relations between China and the Philippines enter the final stages of thawing out and start to normalize, the promise of a bountiful socio-economic harvest is now at least on the horizon for the Filipinos whose pockets remain shallow and full of misery despite the glorious growth numbers heralded by the government.
Two significant developments are occurring, seemingly in tandem, but in reality totally separate, within which the Philippines is totally of import and relevant. First, the country now holds the alternating chairmanship of the Association of Southeast Asian Nations (Asean). Second, China’s One Belt, One Road (OBOR) initiative is about to take off, with Beijing recognizing Asean as a strategic partner in the revival and redevelopment of the ancient Silk Road trading route linking Asian markets to European economies and vice versa.
From the perspective of the Hong Kong and Shanghai Banking Corp., the Belt and Road initiative comes at a crucial time when the global trade and investment landscape within the broader economy is being reshaped by national policies with geopolitical consequences. “In the wake of more isolationist political thinking in the West, with many developed economies turning inward, China is reaching out, seeking stronger trade and investment links with its economic partners,” according to one of the bank’s business talk booklets issued last February.
In a separate statement issued on Friday, the bank highlighted why Asean in general and the Philippines in particular, is a strategic component of the Belt and Road initiative. “Given the economic importance of Asean to China, and its geographical proximity, a key focus of the Belt and Road initiative is its burgeoning economies. For Asean countries, the initiative will help address an infrastructure deficit, and lift industrial development.”
On that note, it is apparent that the Philippines—or the Duterte administration for that matter—has so far played its cards right in its dealings with China.
“And with the Philippines chairing the Asean in 2017, the current administration will be in a good position to further build up and normalize bilateral trade with China faster. This is the perfect time for the implementation of such an initiative.
“The Duterte administration’s foreign policy pivot toward China gives a big push to its own Philippine Development Plan as it puts together plans, reforms, policies and targets to build a more sustainable economy,” according to HSBC.
Indeed, China has embarked on an unprecedented economic agenda—similar to the inclusive economic policy adopted by the Philippines but on a truly global scale—where no one is left behind. And President Xi Jinping declared in his speech at the opening of the Belt and Road forum yesterday that the goal is “to create a big family of harmonious coexistence” untainted by geopolitical maneuverings of the past.
For starters, China has pledged $124 billion to the initiative that by design is envisioned to trigger trillions of dollars in trade and investment, in contrast to the “America First” protectionist policy of a selfish and ambitious businessman, whose bungling pronouncements could diminish the superpower status of the US and the weight of protectionism causes it to implode.
It is now becoming more and more apparent that the China pivot of President Duterte is the right road for the Philippines to take.
“As the fastest rising power of the 21st century with the world’s largest foreign currency reserve of $3.2 trillion, China, through the Belt and Road initiative, can offer the Philippines many economic opportunities that are necessary to improve Philippine infrastructure, enhance bilateral trade, boost tourism, raise employment, alleviate poverty, and broaden social services to the Filipino people,” according to HSBC.
Apparently, the Philippines is now a promising participant in China’s giant trade and infrastructure plan. The Duterte administration has paved the way. Now, it’s time for the private sector to follow the initiative and usher in the age of inclusive growth.