The Chinese connection

President Rodrigo Roa Duterte never misses an opportunity to strengthen his bonds with Chinese President (for life?) Xi Jinping. The most recent get-together was the Boao Forum for Asia where President Duterte in his address to the plenary session declared, “The Philippines and China stand shoulder to shoulder in the campaign against terrorism, illegal drugs, and criminality and are also partners in economic and infrastructure development.”

President Duterte followed up these thoughts during his bilateral meeting with President Xi Jinping proposing an intensified military and defense cooperation with China to combat the threats of terrorism and transnational crimes, building on the 2004 Memorandum of Understanding on Defense Cooperation. He cited the assistance given by China in defeating the terrorists in Marawi. Greater Philippine and Chinese cooperation in these areas while welcome will provide challenges in balancing increased Chinese presence with our military’s well entrenched partnership with the US armed forces. At the level of military support like rifles (President Duterte disclosed that a Chinese rifle was used to kill terrorist Isnilon Hapilon in Marawi), no major problems will be encountered but as we upgrade to military systems and strategies, the challenges in integrating two systems will be daunting. Will the Philippines begin to send promising young officers to train in the military academies of China as we have done for decades in the United States? Looking forward, will there be factions in the military – one Chinese trained and the other American oriented? Why should the Philippines not make it more interesting by also upscaling military collaboration with Russia? This may be one instance where the saying, “Too many cooks will spoil the broth” will not hold true.
It is in the fight against illegal drugs that Philippine and Chinese cooperation is most needed. We recall that the major shipment of drugs which went through the Bureau of Customs green lane came from China. Given the tighter control of Chinese police forces over Chinese territory they should have been able to prevent such shipments. When raids are conducted on shabu factories, invariably Chinese nationals are involved. The Philippine should expect that the Chinese government with its heightened surveillance of its citizens should be able to provide a list of suspected illegal drug dealers and manufacturers so that the Bureau of Immigration will prevent their entry into the country.

Chinese support for the Build, Build, Build program of the Duterte adminstration should go further than access to the funds of the Asian Infrastructure Investment Bank (AIIB), a Chinese-led multilateral development bank that aims to support the building of infrastructure in the Asia-Pacific region. The AIIB recently approved a $140-million loan in Madya Pradesh, India, for rural road connectivity. President Duterte should ask good friend President Xi Jinping to match the loans and official development assistance given or offered by the European Union and traditional Philippine supporters like the United States and Japan, especially in terms of the interest and loan repayment arrangements. This March, Philippine Finance Secretary Carlos Dominguez III and the Japan International Cooperation Agency Chief Representative Yoshio Wada signed a P51.3-billion agreement for the construction of the first Metro Manila subway which is the first tranche of a 30-km underground railway which is estimated to cost P356.96 billion. The funding agreement carries an interest rate of 0.1 percent per annum and a repayment period of 40 years, inclusive of a 12-year grace period.

During President Duterte’s visit to Hainan, China, at lease nine business letters of intent to invest around $9.45-billion in the Philippines were signed by several Chinese companies. These include a $3.46 billion land reclamation and development by the Shanghai GeoHarbour Group in Laguna de Bay (what will be the effect on small Filipino fishermen depending on their livehood in that area?; $450 million from China National Heavy Machinery Corporation to develop a China-Philippine International Technology-Industrial Zone; and $30 million from the Shanghai Shinehigh Biotechnology Ltd. Co. and Zhejiang Dongyang Jinxin Chemical Co. Ltd. to establish a pharmaceutical factory processing plant. The Duterte adminstration should make sure that actual investment flows occur; otherwise it will just be another “photo op.” Chinese investments are always welcome but the Duterte adminstration should ensure that these Chinese employers follow strictly the Philippine Labor Code, especially on the payment of minimum wages and treatment of workers.
The Chinese connection will help bring prosperity and progress to the Philippines if the relationship is mutually beneficial and if the Chinese heed the words of President Duterte, “As sovereign equals, the Philippines and China are partners…”



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