Playing games with China

It is painful to see the game the Duterte administration is playing with China. It wants to be in China’s good graces, but realizes our people are very antsy over the President’s romance with China.

According to a Pulse Asia survey, most Filipinos believe that the Philippines cannot trust China. The survey, conducted from June 24 to 30, revealed that 74 percent believe that the Philippines should not trust China at all.

A survey by SWS says about the same thing. Net trust in China has been positive in only nine out of 49 surveys since SWS first surveyed it in August 1994. It reached as high as moderate +17 in June 2010, and as low as a bad -46 in September 2015.

On a people-to-people basis, the surge of Chinese workers in Chinese offshore gambling companies had been waking up anti-Chinese sentiment among Filipinos. Indeed, even the Filipino-Chinese, except the property developers, are vocally against the influx of new arrivals from the Chinese mainland.

Restaurants that only welcome Chinese diners didn’t help the people-to-people relationship. Some of the habits and behaviors of the Chinese workers clashed with accepted social standards here.

Because the pressure from the community is becoming intense, PAGCOR thought of a plan to limit the locations of POGO operations away from main centers of population. The “hamlet” strategy will require POGO centers to be self sufficient and minimize interaction with local communities.

The Chinese Embassy, however, will have nothing of that sort. It issued a fairly strong press statement expressing its “grave concern” that PAGOR’s plan may infringe on the basic legal rights of Chinese citizens.

I don’t see how such hubs could violate anyone’s basic rights. It had been done before in Cagayan. Maybe the embassy’s reaction provides credence to fears that some of the workers are undercover agents for the PLA. They won’t be effective if they are contained in “hamlets.”

The embassy delivered a strong message that Beijing is tolerating the Chinese POGO here to help the Duterte administration. It is no secret POGO generates billions of pesos for the Philippine government and the economy.

But recent statements of the defense secretary and the national security adviser expressing worries about the national security implications of having so many Chinese workers here must have made Chinese officials unhappy. If that’s the way Filipinos feel, the embassy implicitly warned, China can end the favor.

“According to the Chinese laws and regulations,” the Chinese Embassy statement pointed out, “any form of gambling by Chinese citizens, including online-gambling, gambling overseas, opening casinos overseas to attract citizens of China as primary customers, is illegal.”

Indeed, the Chinese Embassy is blaming us because a large number of Chinese citizens have been illegally recruited and hired in the Philippine gambling industry. In many cases… “some Chinese citizens are even lured into and cheated to work illegally with only tourist visas.”

In fact, the Chinese Embassy pointed out, Philippine casinos, POGO and other forms of gambling entities targeting Chinese customers have severely affected Chinese interests:

“First, huge amounts of Chinese funds have illegally flown out of China into the Philippines, involving crimes such as cross-border money laundering through underground banking which undermines China’s financial supervision and financial security…

“There are analysts who believe that part of the illegal gambling funds has flown into local real estate markets and other sectors in the Philippines.

“Second, a large number of Chinese citizens lured into illegal gambling has resulted in an increase of crimes and social problems in China. In particular, some gambling crimes and telecom frauds are closely connected, which has caused huge losses to the victims and their families.

“Third, many of the Chinese citizens working illegally in Philippine casinos, POGO and other forms of gambling entities are subjected to what media described as ‘modern slavery’ due to severe limitation of their personal freedom.

“Their passports are taken away or confiscated by the Philippine employers. They are confined to live and work in certain designated places and some of them have been subjected to extortion, physical abuse and torture, as well as other ill-treatments… or even murdered.”

The embassy warned that “the Ministry of Public Security of China will carry out more special operations aimed at preventing and combating the cross-border gambling.

“China will destroy networks of criminal organizations involved in recruiting gamblers from China by overseas casinos and using the internet to open casinos in China.

“China will also crack down on ‘underground banks’ and online payment platforms that provide a financial settlement for cross-border gambling and other crimes, and wipe out domestic network operators and companies that provide technical support for such crimes.”

Chinese laws, the embassy pointed out, “clearly stipulates that Chinese citizens gambling overseas, opening casinos to attract Chinese citizens as primary customers constitute gambling crimes. Criminal liability can be pursued in accordance with the provisions of the Criminal Law of China.

“The Chinese embassy solemnly warned that relevant Chinese companies or individuals in the Philippines immediately stop relevant illegal activities, otherwise they will be punished in accordance with Chinese law.”

Will China actively go after their citizens involved in POGO? Or was the embassy just warning the Duterte administration not to rock the boat?

Well, it was silly for Malacañang spokesman Sal Panelo to publicly say Duterte will remind China of the arbitral ruling in our favor when he meets with Xi Jinping this month.

It was also stupid to try to negotiate oil offshore development by saying we will be happy with 60/40 sharing arrangements.

Diplomacy is done in private. Negotiation by press release doesn’t work.

The honeymoon isn’t quite over, but China is pissed enough to suggest they can hurt us where it counts by denying us POGO earnings. China’s not happy with the game our government is playing and they are warning the Duterte administration China is holding all the nice cards.

Boo Chanco’s e-mail address is bchanco@gmail.com. Follow him on Twitter @boochanco