China’s vision and development and what it means for the Philippines
China’s economic new normal will have far-reaching implications not only at home, but also abroad given the country’s increasingly active involvement in the international community through such undertakings as the Belt and Road Initiative (BRI), Asian Infrastructure Investment Bank, Silk Road Fund, and New Development Bank, as well as its vision to promote a “community of shared future for mankind.” China is transitioning away from rapid and high GDP growth powered by a strong export-oriented manufacturing industry to growth that puts premium on quality, equity and balance where services and consumption are promoted and where harmony with society and environment is deeply considered. This pursuit for high-quality development will open opportunities for its neighbors and partners, including the Philippines.
High-quality growth places a premium on the higher-value services and technology sectors, boost domestic consumption and promote the use of clean energy. This will serve as sound basis for sustainable and long-term growth for the country, and the world. Improved living conditions and a burgeoning middle class with greater disposable incomes combine to generate demand for better goods and services and a new concept of development that do not pose harm to the environment and local communities. For instance, such a huge market for healthy and organically-grown food and technology goods or components thereof creates opportunities for many countries, including the Philippines.
CYCLE OF BENEFITS ACROSS THE BOARD
China’s high-quality development opens many doors for the Philippines, benefiting multiple sectors and Filipinos from all walks of life. Philippine exports like bananas, mangoes and pineapples, among others, can gain greater market access to China. Filipino farmers, agricultural cooperatives and companies can expand production, especially of high-value and organically grown fruits, and have a ready and proximate market. The Philippines is also a major producer of semiconductors and other light intermediate electrical goods which are critical components for the manufacture of higher-value electrical goods like computers, mobile phones and a wide range of home and office appliances. Improved bilateral relations under the Duterte Administration contributed a lot in creating these positive developments.
As China’s companies go global, the Philippines has the opportunity to attract more Chinese investors to relocate their production abroad given increasing wages and tough competition in China. More Chinese investments mean more employment to the Filipinos, and more competition to encourage better quality and more affordable products and services.
Upgrading and expanding Philippine infrastructure and logistics will allow the country to attract more of these “going global” Chinese firms, or any foreign investment for that matter. The Philippines can be a hub for Chinese companies wanting to expand their business footprint in the burgeoning Southeast Asian market. Many laborintensive industries, like garments and textiles, are already being shipped out of China and this presents opportunities for the Philippines.
Knowledge and technology transfer can also benefit the Filipino technicians, engineers, scientists, and students and can be facilitated through partnerships with Chinese and local companies. Filipinos can learn new and upgrade their skills and experience working with increasingly world-class companies.
Investments in advancing STEM (science, technology, engineering and mathematics) education coupled with research and development support from the state and the private sector can also make the country attractive to Chinese technology and logistics firms going global. Chinese e-commerce giant Alibaba, for instance, already set up a regional logistics hub in neighboring Malaysia.
China is a world leader in renewable energy (RE), a major producer of solar panels, wind turbines and dams. Cooperation with China can thus assist countries like the Philippines to increase the share of renewables in its energy mix without incurring great cost as Chinese mass production had greatly reduced the cost of RE technologies. China is becoming a major force in green development finance, funding more clean and green technology solutions worldwide. This can help promote more environment-friendly sources of energy and provide electricity to remote off-grid communities. This will support Philippine rural electrification.
Lower prices of steel, cement and other metals produced by China are allowing many countries to rebuild their national infrastructures at lesser cost compared to yesteryears. China’s flexible financing, building heritage and increasingly sophisticated technology make it a major champion in building infrastructure not only in Eurasia and Africa, but also in Latin America and the Pacific.
This will position China to help in the Philippines’ “Build, Build, Build” program under the Duterte government, which will ease traffic congestion in urban areas like Metro Manila and spur development in other areas that will be served by new and modernized transportation modalities, such as highways, railways, airports and seaports.
For an archipelagic country, inter-island connectivity is important and initiatives of past governments like the Strong Republic Nautical Highway during President Macapagal-Arroyo’s Administration and the current government’s Build, Build, Build program will go a long way in further bolstering connectivity.
Chinese companies provide technology assistance to Philippine telecommunication companies and the entry of a Chinese player in the country’s telecoms sector will further boost internet speed and expand service delivery, especially in areas less served by existing networks. China, which became the Philippines’ largest trade partner in 2016, can thus be a dependable partner for Philippine development.
The growth of Chinese tourism accelerated the building of more tourismrelated infrastructure that continues to benefit local communities from tour guides, transport drivers, and hotel staff to street food vendors, local musicians and entertainers, therapists/masseurs and souvenir shop keepers. The additional revenue also pushed the upgrading and modernization of airports and seaports and added more flights/trips to tourist destinations. Hence, the influx of thousands of Chinese tourists contributes to both formal and informal economy. In addition, several Chinese mainland cities are already considering opening doors to Filipino household workers, offering twice or thrice the pay these workers are presently receiving from other traditional destination countries. China’s continuous development and a burgeoning middle class, thus, make it a likely destination for OFWs in the immediate to near term.
TOWARDS A COMMUNITY OF SHARED FUTURE FOR MANKIND
With more than a billion population, China is the world’s largest market for a wide range of goods and is also the world’s largest outbound tourism market. The country has emerged as the world’s largest infrastructure builder and largest renewable energy producer. Since its reform and opening up in 1978, more than 800 million Chinese have been lifted out of poverty. The country attained all its United Nations Millennium Development Goals by 2015 and is helping other countries in the global South achieve theirs. All these progress means a lot as China assumes greater global responsibilities commensurate to its increasing capabilities. This means that China is more capable and willing to share public goods and contribute to such noble global causes as poverty alleviation, development assistance, climate change mitigation, fighting maritime piracy and terrorism, among others.
The concept of building a “community of shared future for mankind” was first introduced by President Xi Jinping in 2013. Although the concept remains incipient, its aspirational aspect resonates well for people across the world desiring for peace, prosperity, development and respect for differences. This nascent vision is projected as being inclusive and promoting mutual benefit. It does not discriminate on the basis of a country’s political or economic system, prevailing social or religious beliefs, or level of development. It does not attach political conditionalities or prescribe a one-size-fits-all approach to governance, like other foreign partners. It is amoral and, as such, does not lecture countries on values they need to imbibe and instill in their peoples. Instead, it emphasizes joint efforts, consultation and compromise.
The fact that the concept is very much in its early stage presents opportunities for countries to help shape its broad contours. Beijing would have to invest time and resources to listen and solicit inputs from other countries, accommodate them to get their buy-in and shepherd consensus.
In the meantime, China continues to support and promote globalization and trade liberalization and initiatives like Belt and Road are a step towards this direction. At a time when traditional world leader US had been reluctant to step up and provide reassurance and commitment to the economic order, China’s actions provide some relief. BRI will help move energy, capital, commodities, people, knowledge and technologies seamlessly across borders. This will be done through establishing connectivity, harmonizing customs procedures to facilitate more efficient trade flows and coordinating development plans with countries along the routes to identify areas of convergence. Since its reform and opening up, China has benefited a lot from the postwar liberal trade order. Hence, it has a deep interest in keeping that order stable and healthy. China’s rise, in turn, benefited the world in many ways. It provides access to a huge commodities and tourism market, source of foreign direct investments and development assistance and is increasingly a leader in innovation in many fields.
China’s tremendous financial, technological and engineering capacities enable it to perform greater roles in addressing pressing global challenges. As a developing country with a continental size and a huge population which has made great strides in reducing poverty, improving living conditions, building infrastructure, promoting green energy and fighting terrorism and extremism, China offers inspiration for other developing and underdeveloped countries. These decades-honed achievements, lessons and experiences will be valuable to friends and partners.