INTRODUCTION
This article titled
Duterte still waiting for China’s ballyhooed bonanza is written by
RICHARD JAVAD HEYDARIAN a political analyst in Manila. Mr. Heydarian is affiliated with the Liberal Party, the establishment party that Benigno Aquino belongs to, that doesn't favor closer ties with China at the expense of sovereignty. While some people see Duterte as a anti-establishment candidate, in reality he is part of the elite, and is affiliated with former President
Gloria Macapagal Arroyo that favors closer economic ties with China. This was evident when she was President.
In the article, Mr Heydarian argues that after 3 years, Duterte has very little to show for in actual investment from China. This is confirmed by this article
Playing a losing game with China. All the Philippines has gotten from China right now is about a couple hundred million a year in Chinese investment mainly online casinos which most of the Filipino public and the
Chinese government itself want Duterte to shut down. Cambodia shut their online Casinos last month,
because of pressure from the Cambodian public and China. The reality is as far back as a decade ago it was apparent that China didn't consider Philippines strategic. The US$24 Billion in aid and investment that China promised the Philippines was just a promise. Secondly, the reason why Chinese commitment to Philippines has been low is
because its more careful lately with disbursing funds for BRI projects, and the Filipino themselves are very careful. Philippines overseas debt is 24% of its F/X reserves. Given China current account balance is moving to balance (small deficits/small surplus),
China will be more careful how it lends money overseas in the long run.
SUMMARY
Despite China's highly touted Belt and Road Initiative, a US$1 trillion program to build infrastructure worldwide, Japan's infrastructure-related investments are still much larger than China's in Southeast Asia.
His comments came amid festering territorial disputes between the Philippines and China in the South China Sea, which have escalated since a suspected Chinese militia vessel rammed and sank a Filipino fishing vessel at the sea's Reed Bank in June.
China's promise of an infrastructure investment bonanza, funds that were supposed to drive Duterte's touted "Build, Build, Build" campaign, has not arrived, putting into doubt the wisdom of his mostly acquiescent policy in the South China Sea.
Ahead of his election in mid-2016, he made it clear that he prefers warmer ties with China, because "We have to talk and what I need from China is not anger. What I need from China is help to develop my country."
Three years later, among China's ten proposed big-ticket infrastructure projects, only the $60 million Chico River Pump Irrigation Project and another has apparently cleared the preliminary stages of implementation.
Philippine Finance Secretary Carlos Dominguez III has admitted to several "Roadblocks", including China's initial insistence on using renminbi in aid disbursement, heavy reliance on Chinese workers and managers, and an unwillingness to co-finance projects with other lenders such as Japan and the Asian Development Bank.
However, even more worrying, festering territorial disputes between the Philippines and China in the South China Sea, which have escalated since a suspected Chinese militia vessel rammed and sank a Filipino fishing vessel at the sea’s Reed Bank in June.
OPINION
WHY THE CHINESE DON'T CONSIDER THE PHILIPPINES IMPORTANT Chinese don't consider the Philippines that important, because they are obsessed with the Malacca Strait. China has billions of dollars in
Malaysian BRI projects, while very little infrastructure investment in both the Philippines or Thailand for example.
There are three reason for this.
The first is because of Philippines strict environmental laws, there isn't a lot of Chinese investment in mining unlike Indonesia or Myanmar.
The second is conceptual and historical. The Chinese have a 15th century view of Southeast Asia. At the time Philippines was a scattered collection of small kingdoms and tribes. Zheng He passed the Philippines as they sailed through the South China Seas, without making any stops. In contrast, the Japanese have considered the Philippines strategically important during the war and after the war. During the War the Japanese main invasion route into Southeast Asia was from Taiwan to the Philippines and down through Makassar Strait, capturing the oil fields in Borneo and finally to Java.
The third is Filipino are very pro-American, so relations could easily reverse once Duterte steps down.
HOW FAR CAN THE CHINESE PUSH THE FILIPINOS BEFORE THEY SNAP Despite what many Mainland Chinese think, the friendliest country in Asia toward ethnic Chinese has been the Philippines, not Thailand. The last time there was serious anti-Chinese violence in the Philippines was 17th century. Unlike Thailand, the Philippines never forced Chinese to assimilate by closing Chinese language schools. Some Chinese assimilated, some didn't.
Over the past decade, there have been numerous incident between Chinese Coast Guard and the Philippines naval and Filipino fishermen. Here is a timeline of the incidents between China and the Philippines
Skirmishes, standoffs, harassment in West Philippine Sea Between 2012-2016, there had been 8 incidents. In 2018-2019, there have been 10 incidents. In the South China Seas, Duterte appeasement of China only increase Chinese harassment, which sends the wrong message to other claimants - that appeasement will make it worse.
During all these incidents, the Filipinos never started like riots like Vietnamese did in 2014, leaving over dozen Mainland Chinese dead.
How do you think people would react in China? Riots were started over incidents with Japan. There are Mainland Chinese harassing people in foreign countries over Hong Kong.
In one incident this year, a Chinese ship rammed a Filipino fishing boat, sinking it. They left the scene, leaving 22 Filipino fishermen in the water. Someone could have died. The Filipino public were upset, but there was no demonstrations let alone rioting.
SOUTHEAST ASIANS OK WITH CHINA, BUT MAINLAND CHINESE NOT SO MUCH Chinese think historical and hold grudges, Southeast Asian, particularly Filipinos don't, and are more worried about the present. Filipino's don't care how great China was in the past. They don't obsesses over the Japanese occupation like the Chinese do
Southeast Asia is different from the West, is ordinary people are less concerned with actions of the Chinese government, but with activities of Mainland Chinese in their respective countries. This in turn impacts the overall relations between countries and China. The two biggest areas of concern for Filipinos about Mainland Chinese are:
- Chinese investors have poured money into Online gambling industry in the Philippines that target the Chinese in Mainland China. This has brought an influx of Mainland Chinese workers. The first impact of these workers is to drive up rent and prices of apartments in Metro Manila. Secondly, most of the workers are working illegally, meaning they are working on Tourist visas, Thirdly, as in Cambodia, the online casinos bring a lot of illegal activity like drug use, human trafficking, extortion,,
- Most of the drugs (meth) comes from China, and Mainland Chinese gangs are the main suppliers. This is a long standing problem Despite the talk China hasn't done much to curb the trade. Drug lords in China protected by Communist Party officials, and some could even be members of the Party
The Chinese government recognizes
both problems, and has told the Philippines government to ban online Casinos. My personal opinion is China could solve these problems and stop illicit transfers overseas, by legalizing casino gambling in Mainland China.
In my opinion, the only major benefit the Philippines has gotten with improved relations with China is the tourist numbering has doubled from
500,000 to 1,000,000. However, tourist number were increasing before the improvement in relations.
CONCLUSION If I was in China's position, if I could get something for nothing, I would do the same. I think Duterte's mistake was over promising to the Filipino people of the potential China's bonanza. China didn't cough much aid or investment under Arroyo, and Duterte should have expected that policy should have remained the same.
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