China on a shopping spree

China’s financial muscle is being felt all over the world especially in Europe and the United States, underscored by the latest reports that acquisitions by Chinese companies have reached $207 billion this year alone. One of the deals so far involves the Switzerland-based agribusiness giant Syngenta for close to $44 billion by ChemChina (a statecontrolled company), described as the “biggest ever foreign acquisition by a Chinese company.”

Beijing has been encouraging local companies to train their sights overseas, resulting in a wave of acquisitions from football clubs to appliances, to agriculture and real estate. Just recently, appliance maker Midea Group purchased 86 percent of Kuka AG of Germany (a robotics company that has Airbus and Audi among its customers) while Midea’s rival Haier bought the appliance division of General Electric for $5.6 billion. Newly minted Chinese “tycoons” (like a former hair salon proprietor for example) have also spent some $2 billion to buy European football teams such as AC Milan and Inter Milan of Italy and England’s Manchester City and Aston Villa.

Reports also indicate that between 2010 and 2015, Chinese investors have poured in over $300 billion into the US real estate sector from residences to office towers and hotels. London has also become attractive even post Brexit, with the drop in the British pound, plus low interest rates becoming additional incentives to investors who are snapping up both residential and commercial developments. Aside from investment, other reasons why Chinese buyers want to acquire property overseas have to do with the educational opportunities they see for their children and their growing attraction to the lifestyle in the West.

The reality is that China does not exactly need to grab reefs or shoals or islands since it can use its financial muscle to “occupy” the global arena. (This is exactly what Japan did in the US in the 1980s when Japan Inc. started buying up American “institutions” such as the Pebble Beach golf club, Rockefeller Center and Columbia Records.) In fact, the launch of the Asian Infrastructure Investment Bank (AIIB) is seen to enhance the clout of China both economically and politically with more countries seeking membership, the latest of which is Belarus. The Philippines is also fast-tracking its membership with Senate ratification the only thing that is needed.

The AIIB is set to challenge the US-led World Bank as far as global financing is concerned, with the bank set to invest on infrastructure projects that are “high quality and low cost” according to Chinese President Xi Jinping during the bank’s launch early this year. As Luxembourg Finance Minister Pierre Gramegna remarked, the launch of the AIIB is “further proof of the rebalancing of the global economy.”

Minus the “separation” comment, the timing of President Rodrigo Duterte’s visit to China – with some $24 billion worth of funds and investments that have been promised – seems to be very opportune. Hopefully, we can help convince Beijing that helping us through soft loans will tighten relations between the two countries (which actually started in the 1970s when Ferdinand Marcos sent a diplomatic delegation to China in what has been touted as “basketball diplomacy”) – without having to engage in a squabble over maritime territories. After all, maintaining freedom of navigation would be in the best interest of all nations considering how intertwined and interdependent economic relations have become today. Presidential visit to Japan

I was invited to join the presidential party for President Duterte’s first official trip to Japan. I certainly am looking forward to witnessing firsthand how the President will handle this very significant trip to an important ally like Japan. I hope to write my Thursday and Sunday columns based on this two-and-a-half day visit.

President Rody hit if off with Japanese Prime Minister Shinzo Abe during the ASEAN meeting in Vientiane, Laos, with the latter issuing the invitation for the visit and remarking that Duterte is a “very popular figure” in his country. Japan is expected to roll out the red carpet for the leader of a country that has been one of the biggest recipients of Japanese official development assistance.

Much earlier, Japan has promised to finance a $ 2.4 billion railway project that would connect Manila to Bulacan. The Japanese government is also set to donate Coast Guard vessels, with the first one having arrived two weeks ago. Duterte and Abe are set to discuss defense cooperation, with the latter probably hoping to impress upon President Duterte just how critical it is to maintain relations with our longtime ally, the United States, as part of the power rebalancing in the Asia Pacific region. The US has also been encouraging Japan – the world’s third largest economy – to play a more prominent role in maintaining a stable balance of power in Asia.

It can be recalled the US is responsible for Japan’s pacifist Constitution, with Prime Minister Abe pushing for amendments that would enhance the nation’s selfdefense capabilities and ability to respond to protect the people from external threats.

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