The Philippines received the second-lowest level of overseas direct investment (ODI) coming from mainland China to the Association of Southeast Asian Nations (Asean) in 2013, next only to Brunei, which got the least ODI.
The Philippines captured only1.4 percent of China’s $5.74 billion investment in the region last year. Only Brunei, which got a 0.2 percent share of China’s ODI outlays, ranked lower, Chinese Ambassador to the Philippines Zhao Jianhua said during a welcome dinner hosted by Philippine Chamber of Commerce and Industry (PCCI).
Singapore gathered the lion’s share of Chinese investment in the Asean with 46.3 percent, followed at some distance by Cambodia (9.8 percent), Indonesia (9.5 percent), Laos (9.2 percent), Myanmar (8.8 percent), Vietnam (6.2 percent), Thailand (5.6 percent), and Malaysia (2.9 percent).
“All Asean members are China’s close neighbors so we have been attaching great importance to economic and trade relationships with Asean countries. Right now we are trying to implement several major initiatives. One is to set up a China-Asean free trade agreement that is an upgraded version approaching the level of a regional comprehensive economic partnership agreement,” Zhao said.
“I should point out that China’s investment in the Philippines has not been as satisfactory as we have hoped. So we hope that we can invest more, particularly in infrastructure projects, the energy sector, and the manufacturing sector,” the Chinese ambassador said.
Zhao said that China is undergoing economic structural reforms, and that some labor-intensive industries will be shifting out of China to neighboring countries, as well as to African and Central Asian countries.
Opportunity in manufacturing
“There is a good opportunity for the Philippines to receive some good quality manufacturing investments. Food processing, manufacturing, minerals, these are the other things that we can do in the near future. But investment now is not too big. The Philippines is investing more in China than China is investing in the Philippines,” Zhao said.
For his part, PCCI President Alfredo Yao said that, “We have remained focused on working together for our mutual interests and benefits. We have further strengthened our economic relationship as evidenced by the latest data showing China being the Philippines’ third largest trading partner, the ninth top foreign investor, and fourth largest source of tourists.”
“Through our Memorandum of Agreements with various Chinese Chambers and Councils like Guangdong, Hunan, Jaingsu, Shanghai, Xiamen, Guangxi, Chongqing, among others, we have taken and we will take all the opportunities to promote, strengthen and expand trade, economic, scientific, technological cooperation, and other business relations between our two countries,” Yao said
China is currently the third largest trading partner of the Philippines, with the $15.1 billion in cross-border trade recorded last year representing 12.7 percent of the Philippines’ total trade last year. This was an increase of 1.5 percent in volume and $2.25 billion in value from 2012, according Philippine government data.
Zhao claimed that if China’s other territories were included, China would be the Philippines number one trading partner. “We are now saying that China is number three trading partner of the Philippines. We are talking about Mainland China. But if you include Hong Kong and Macau, China is number one. If you included Taiwan, China is a bigger number one,” he said.
In 2013, the total number of Chinese tourists coming to the Philippines stood at 426,000, an increase of 70 percent from 2012.
Zhao compared the Philippines’ modest tourism numbers with Chinese tourism to Malaysia and Thailand, who each attract three to four million Chinese visitors annually on average.
“Imagine if you can attract one or two million Chinese tourists, that will usually make the tourism industry. We are glad that despite the issues we are facing, the Chinese tourists are still attracted to the beautiful scenery and warm people here,” Zhao said
“During the first two months of this year, there were about 90,000 Chinese tourists who visited the Philippines, and we want to become number one,” the ambassador added.