Superpower

Last week, the world watched in awe as the People’s Republic of China marked its 70th anniversary with a parade to end all parades.

Tanks, missiles and new-generation drones paraded through Beijing in a massive show of force. Overhead, ultra-modern warplanes streaked over the capital. They represented the most advanced of China’s force of 2,000 warplanes.

The center of interest in this massive military parade was the unveiling of the Dong Feng 41 intercontinental ballistic missiles. This weapon, that carries multiple nuclear warheads, evens the balance of power between the US and China.

This strategic weapon, in Beijing’s view, makes it unlikely the US will start a war with the Asian power. China has justified its huge investments in cutting edge military weaponry as a necessary step to ensure peace. The weaponry is their means to ensure deterrence.

In 2016, the influential US think tank Rand Corporation issued a report titled: “War with China: Thinking Through the Unthinkable.” That report concluded a US war with China in the latter’s turf may no longer be winnable.

A more recent report by Reuters echoed that conclusion. Looking at the buildup of China’s navy, the report observes that China now rules the waves insofar as the San Hai or “Three Seas” are concerned. These three seas are: the South China Sea, the East China Sea and the Yellow Sea.

The rapid advance of China’s military capability is made possible by that country’s great progress in pushing the frontiers of technology.

China’s huge investments in research and development have made that country the top patent filer in the world since 2010. In terms of research and development, China now ranks a close second to the US and is way ahead of Japan. Incessant innovation in turn supports China’s position as the top manufacturing power. The Asian power’s technological base leads everyone else in 6G, supercomputers, artificial intelligence and drones.

China’s technological prowess, in turn, is the outcome of its unparalleled economic achievement. The People’s Republic wasted its first two decades with destructive Maoist experiments such as the Great Leap Forward and the Great Proletarian Cultural Revolution. Notwithstanding, the Asian power began to take off only after Deng Xiaoping took over and led his nation along a pragmatic path.

It was Deng who led China into the epoch of “socialism with Chinese characteristics.” He popularized the principle of “crossing the river by feeling the stones.” This opened the door to the most astounding economic achievement in human history.

Over the past five decades of rapid economic expansion, China lifted 700 million from abject poverty, brought gender equality and created the world’s largest middle class. Despite all attempts to slow China down and inhibit her most important technological enterprises, it is clear that historical momentum is on Beijing’s side. That massive parade intended precisely to underscore that.

Transparency

Local power costs are heading where they should be: southwards. This is the benefit consumers derive from greater transparency in the power industry.

For the fifth month in a row, Meralco is cutting rates in its franchise area. Meralco consumers will enjoy the lowest power rates in the entire country. We should enjoy more price cuts if the peso trends stronger and oil prices trend lower.

A major factor influencing Meralco’s latest price cut is the recently concluded bidding among generator companies to supply 1700 MW of the distributor’s requirements. All the winning bids priced significantly lower than existing power supply agreements (PSAs).

In order to win PSAs with the country’s largest distributorship, the power suppliers had to settle for the thinnest of margins. This reinforces the regime of competition in the power supply sector.

With its lowest retail rates, Meralco also sets a benchmark for other distribution utilities in the country. Consumers in the other areas will soon demand the degree of transparency and efficiency underpinning Meralco’s pricing.

Credit for the lower-than-expected PSAs will also have to be given to the Third Party Bids and Awards Committee (TPBAC) tasked to oversee the bidding process. Energy Undersecretary Felix William Fuentebella says the DOE exercised due diligence in the selection of bid committee.

Two of the five members of this committee represent the consumers. The DOE vets nominees and approves their selection. They needed to have both the competence and integrity to serve as “independent eyes” in the process. This is the competitive selection process (CSP) prescribed by the Supreme Court ruling.

In the last round of bidding for Meralco’s humungous supply requirements, the first under the CSP required by the Supreme Court, two credible professionals represented power consumers. Atty. Ferdinand A. Domingo served as chairman of the TPBAC.

Atty. Adrian S. Cristobal served as the second consumer representative. He was Secretary of Trade and Industry and currently serves as president of SteelAsia, the country’s largest steel manufacturer and a major energy consumer.

The Philippine power sector is not only leading the way in adopting transparent power procurement procedures, it is also leading the way in the use of renewable energy. The synergy between the two will benefit our consumers in the long term.

Meralco included a separate bid for renewable energy providers in the last competitive selection process. Even the bids submitted by renewable energy producers turned out to be lower than expected.

In a recent meeting of the Association of Electricity Supply Industry in West Asia and the Western Pacific, participants took positive note of encouraging developments in the Philippines. Renewable energy providers now account for 32% of the country’s supply, way above the region’s target.