By: Azhar Azam
During his state visit to China in January, Philippine President Ferdinand Marcos Jr. held a productive meeting with the Chinese President Xi Jinping. In a joint statement, two leaders reaffirmed their support to each other’s development and territorial integrity and agreed to handle differences through peaceful means. Beijing and Manila also signed 14 cooperation documents to boost cooperation in several areas from trade to renewable energy.
"We agreed that maritime issues between the two countries do not comprise the entirety of our relations," said Marcos in a speech on arriving back home. In June, he reiterated the China-Philippines “healthy” and “deepening” relations outweighed their differences. After former Philippine President Rodrigo Duterte met Xi on July 17, Marcos said he was aware of the trip and welcomed the communication.
The consensus to “shelve” disputes and push trade in 1988 laid the foundation of a mutually beneficial relationship; this could be the basic premise of a strengthened Beijing-Manila ties amid US efforts to disrupt the decades-old close cooperation through false promises of addressing the regional security concerns by building military facilities in the Philippines, claiming they would bring “economic opportunities (and) jobs.”
According to the Philippine Statistics Authority (PSA), bilateral China-Philippines trade in 2022 had exceeded $39 billion ($28.22+$10.97bn). With the signing of the new deals as well as investment pledges of $22.8 billion from Chinese investors, Manila can greatly benefit from the Chinese leading role in the global renewable energy, electrical vehicles, agriculture sector and infrastructure development.
The Philippines’ largest source of energy, the Malampaya gas field, is expected to peter out over the next five years. At this critical time, Chinese companies’ investments in the Philippines’ renewable energy would help Manila to meet its domestic need and close the clean energy gap with the rest of the region. The Philippines Misamis Oriental province's recent deal with the investors from China, to collect waste and turn it into resources for power generation, is another example of bilateral energy cooperation.
In April, the POWERCHINA held the groundbreaking ceremony of its 64.2 megawatt (MW) photovoltaic project in Tanauan and Malvar project. The solar power plants of 140 MW with Chinese cooperation by the year-end are expected to power 84,000 households, displacing 100,000 tons of coal per year. China, therefore, holds a key for the Philippines' transition to clean energy and its target of having 50% of renewable energy in the power generation mix by 2040.
After FAW Hongqi, China’s one of the most prestigious luxury passenger car brands, in March announced to make a debut in the Philippine market – the Chinese Yadea Group Holdings, one of world’s largest electrical two-wheeled vehicle makers, also revealed its plan to invest $1 billion in the country. The annual production capacity of three to five million units will meet the domestic demand as well as will have the potential to export these e-motorcycles, aligning with the country’s key objective to build export-oriented industries.
The initial export of durian to China, the Philippines Bureau of Plant Industry reckons, this year will generate 10,000 direct and 2,000 indirect jobs as well as fetch $150 million in export revenue. Manila pegs the total income from export of the “king of fruits” to China in 2023 at $260 million, which means creation for more employment for the Filipinos.
Akin to the other agreements, a bilateral deal on a broader agriculture cooperation seized in China by Macros is being fully implemented as the two neighbors are set to open discussion to boost bilateral agriculture cooperation with officials of the Chinese Ministry of Agriculture and Rural Affairs soon visiting Manila. Per the Philippines News Agency, the country by April had dispatched 200 metric tons of agricultural produce to Beijing.
The China International Import Expo (CIIE) has also helped the Philippines exporters to showcase their products in one of the biggest world’s markets. Thanks to the world’s largest trade fair, Manila companies’ sales last year increased by five times compared to the revenue they generated in the 2018 CIIE.
As the two countries deepen synergy between their respective Belt and Road Initiative and “Build, Build, Build” and “Build Better More” with around 40 government-to-government projects completed or underway, there is a need to solidify this crucial relationship and protect it from outside efforts to draw a wedge between Beijing and Manila on the issue of the South China Sea.
These attempts and the anti-China alliances such as the “Quad 2” would spark rifts in the bilateral relationship, undermine regional peace and hamper the Philippines economic ambitions. Manila’s decision to house the US military bases and joint military drills to develop the so-called “credible deterrence posture” further threatens to deteriorate the time-tested partnership and will hinder its progress to join the league of 20 leading economies by 2050.
Duterte too has warned the US military facilities in the Philippines have grown to 17 under the Enhanced Defense and Cooperation Agreement between Manila and Washington. The “invaluable asset” to calm tensions demanded an “open discussion” on the issue. This again elevates serious concerns about the regional stability and escalation of unwanted tensions in Asia-Pacific.
Manila shouldn’t allow the dispute to dominate the centuries-old ties; there's pretty much consonance in the approach of the two countries such as on enhancing trade, energy, investment and infrastructure cooperation that could drive the relationship back on track. At the first anniversary of Marcos as the Philippines president, the archipelago needs to demonstrate this beneficial relationship really overshadows odd differences and it sincerely seeks to “further strengthen the China-Philippines relationship of Comprehensive Strategic Cooperation.”