Government News Analysis Trade

Silk purse from China

Yanqi Lake, China
Yanqi Lake, China

What a difference a year makes… more to the point, what a difference a couple of changes of government make. Twelve months ago, the United States was heralding its Trans Pacific Partnership (TPP), a proposed global-trade juggernaut that would be anchored on East Asia. Meanwhile, China’s ‘Belt and Road’ initiative – a grander scheme altogether – was little more than a twinkle in the eye of its originator, Chinese President Xi Jinping. And in each of these trade groupings the Philippines was stakeless.

It hadn’t signed up to TPP – former president Benigno “Noynoy” Aquino had wanted to as had his mentor in the task, then US president Barack Obama. But conflict with the Philippine Constitution and trying to get that resolved had left insufficient time before the end of Aquino’s term. Meanwhile, by his handling of a territorial dispute with China in the South China Sea, Aquino had virtually ensured his country’s exclusion from the 21st Century Maritime Silk Road, the marine component of the China-led bloc. Thus, in terms of large emerging global trade alliances, the Philippines had been left high and dry.

Today, while TPP is taking on water after US President Donald Trump withdrew his country from it as soon as he took office in January; China – which was never invited to join the TPP – is showcasing its Belt and Road to the world. And the Philippines – once persona non grata with the plan’s architects – has now become a component part of the biggest trading titan the world has ever conceived.

Just in crude numbers, this project transcends 65 countries and is home to 60% of the world’s population which, in turn, represents more than a third of global gross domestic product. Given those figures, it’s hard to come up with an argument for not joining.

Let’s back up a bit. Xi proposed his dual land-and-ocean scheme in 2013. A year later, a map was produced showing the envisioned overland trade route of the Silk Road Economic Belt and the marine path of the 21st Century Maritime Silk Road – a rough facsimile of China’s ancient sea-trade passages. What was conspicuous on the sea route was that the Philippines had not been included while every other part of Southeast Asia – the other nine states that make up the Association of Southeast Asia Nations, the Philippines’ regional peers and trade rivals – were.

That wasn’t caused by some error on behalf of the cartographers; it was deliberate. It was a direct consequence of Aquino’s confrontational approach to settling a dispute with China over a small group of South China Sea islets and cays known as Scarborough Shoal.

Rather than enter into bilateral discussions to deal with the issue – which Beijing had urged –Aquino, encouraged by Obama, elected to internationalise the issue by filing a case against Beijing with the Permanent Court of Arbitration in The Hague. He supplemented that with months of bellicose rhetoric that ended up savaging Philippine exports to the Mainland. It’s not surprising then that the Philippines was left off the map. However, China never closed the door.

At the map’s unveiling a Chinese official – referring specifically to the Philippines – had this to say: “With the future development of the 21st Century Maritime Silk Road, I think that there will be more opportunities for both sides to have future developments”. More pointedly, he added: “If you [the Philippines] want to join in and put more passion and attach more importance to it, I think that depends on your government, because China is open to all countries who are ready; who prefer to join the initiative”.

And Beijing stayed true to its word which is why tomorrow and Monday Philippine President Rodrigo Duterte will be seated at the top table for the Belt and Road Summit being held at the 270,000 square metre China National Convention Center (CNCC) in Beijing and at the picturesque Yanqi Lake (photo) some 50 kilometres northeast of the Chinese capital.

He’ll be among 29 heads of state from four continents, ministerial-level representatives from 80 other countries and around 1,000 official delegates who’ll be at the CNCC and “the lake where wild geese take a rest” for China’s biggest production of the year – a mega forum that will explain and promote the vastness of this Chinese-bankrolled transcontinental infrastructure enterprise. They’ll get a clearer view of the blueprint for linking Asia, Africa and Europe via a network of roads and railways, ports and shipping routes. And they’ll see first hand the trade potential that being a member of this bloc has for each of them.

We believe that the 21st Century Maritime Silk Road was always a factor in Duterte’s calculus when weighing his foreign-policy options. While seeking peaceful coexistence with his large northern neighbour and repairing the damage of the previous four years which saw Manila-Beijing relations plunge to all time lows was high on Duterte’s agenda, from an economic point of view he knew he couldn’t afford to let his country be excluded from a global initiative that could breathe new life into Philippine trade – a sector that was in troubled straits.

Isolation from this grouping, plus the inability to access infrastructure funds – the Chinese Development Bank alone has set aside US$890 billion for around 900 projects – would leave the Philippines marooned and deliver a massive handicap in terms of its competitiveness just within Asean. The spectre of the Philippines as the “Poor Man of Asia’ most likely loomed.

Thus, even while he was still campaigning for the presidency, he was already playing down the South China Sea issue. And he’s done so ever since – even despite the arbitration court’s ruling in the Philippines’ favour.  This doesn’t mean he’s forgotten it or is ignoring it, it means that in the bigger picture – the one that shows the Philippines’ future – it doesn’t figure so large.

Furthermore, had things been different and Trump had carried the baton for Obama with TPP, Duterte still would not have joined. First, the Constitution aside, there was already plenty of opposition to it domestically; but secondly, given his determination to forge an independent foreign policy – leaving the Washington-led one of the past behind – he was not likely to get back into bed with the US on a trade arrangement which brought with it a power element that sought to build a sphere of influence for the Americans right in his backyard.

Naturally, on trade alone, he was always going to gravitate to the organically grown local model. And as things turned out, right now that looks like the only game in town.

What’s happened then is quite remarkable. The Philippines, which had one way and another been cast adrift – shot itself in the foot, cut off its nose to spite its face; choose whichever metaphor you like – as far as membership of a vast new trade initiative was concerned, is now at the forefront of the biggest one in history.

The top table chair that had previously been removed from the Philippines – Aquino had showed no interest in joining in any event – tomorrow will be occupied by the country’s president; a man whose friendship China highly values.

Looking back to the wretched state of trade and other relations between Manila and Beijing during the last lingering days of the Aquino administration and the state of play between these two nations today – capped by the Philippines inclusion on the 21st Century Maritime Silk Road – it wouldn’t be exaggerating to suggest that Duterte has managed to make a silk purse out of a pig’s ear.

48 Comments

    • Because obummer threated my philippines with a lot of bullcrap because of 2k “ejk deaths” while supporting mexico with over 120k “ejk deaths”

    • Dean Sempio
      Then why do you care what America do? You are a free man living on a sovereign country. America is far, far away. America doesn’t bring in her USNAVY PACIFICOM and declare our seas as their seas? Or put a gun in your head and tell you what to do? But to you America is bullshit? Have you heard of China’s imaginary nine-dash claim over SCS? Do you know China has INDISPUTABLE SOVEREIGNTY OVER SCS and that includes Scarborough Shoal, a fishing ground for filipino fishermen? Have you heard of Chinese coast guard harassing our fishermen and building structures violating our EEZ and the environment? Maybe you heard of those things but to you America is the only bullshit in this world. Why?

  • It’s a promising future for East Asia to usher peace and prosperity with China’s “Belt and Road”.

    The prosperity is coupled with PEACE with China’s PLANAVY patrolling her INDISPUTABLE SOVEREIGNTY over the whole of SCS while the Philippine’s President can’t even whisper the arbitral award that invalidated China’s imaginary nine-dash claim over SCS.

    This ushering of a new ERA of prosperity to ASIA by Asians without the intervention of the Americans is the crux of our mahal na pangulong digung independent foreign policy base on dependency with China. This dependency includes setting aside the fact that China is claiming even the very shores of the Philippine sea.
    It’s like there’s a big bug in the face but NOBODY would notice for the purpose of PEACE AND PROSPERITY. Siguro kapag maunlad na lahat at MAZ MADAMING ARMAS ey saka na lang magtalo neh kaka?

    • Diana Kit Navaja Lucero

      Strategy – when you can’t say what you are actually doing spell it as STRATEGY.

      can strategy predict the OUTCOME? Hell no. Only fact on the ground are the teller of outcomes and what is fact? CHINA’S INDISPUTABLE SOVEREIGNTY OVER SCS UNCHALLENGE.

      Can’t even whisper that China’s nine-dash claim is NOT STRATEGY BUT PANG-UUTO SA MGA UTO-UTO.

    • i am with our president, but what you posted is also true, sad… sometimes a cornered dog also needs to fight for his own good. what we need is a good moral coming from our leaders to fight back.

    • Ang tinood nga pilipino wa ga paka aron ingnon kunuhay maayo kaayo mo sultig lahing pinolongan,sa huna huna ra na nimo nga pinoy ka,nan kung tinood ka nga pinoy masabtan mo kini..

    • Veronica San Agustin
      I never said PANG-UUTO NG CHINA. Never. I said PANG-UUTO sa mga UTO-UTO.

      What I said about China is her grand plan of prosperity and peace At Asia by Asians. It’s prosperity for all under a peaceful coexistence with Big Brother China excluded are the Americans.

      And I NEVER SAID I HAVE A BETTER STRATEGY THAN THE MAHAL NA PANGULO.

      So your question again? Trying to misdirect me?

      Why don’t you tackle the arbitral award that is like a BIG BUG in our face?

      And the president wanting a VFA with China. Who will be VISITOR and who will be HOST?

    • Rommel hindi ako kasing talino mo to tacke the arbitral award. Hindi ko trabaho yan. Mapapahanga mo ko kung magiging blogger ka na lang or do some lobbying of your ideas. Sayang ang talino mo, wag mong itago sa socmed.

    • So sino ang uto uto at nang uuto Rommel? You did not say it directly pero kahit hindi kami kasing talino mo, nakakaintindi kami ng tinutumbok ng pananalita mo. “CHINA’S INDISPUTABLE SOVEREIGNTY OVER SCS UNCHALLENGE.” So how do you want it challenged???

    • Veronica San Agustin
      Ako po ey nagtatanung laang habang nakiki-wifi dine sa kahanggan. Sa init ng panahon ey pinalilipas ng mga katanungan pumasok sa aking isipin sa kababasa ng kung anu-ano bagang bagay na kakatwa sa fezbuk.
      Maige na eto at baka tamaan ng partial dementia ey mauwe sa alzheimer’s disease ey uso pa naman.

      Tulad ng araw hindi ko alam ang paruruonan ng ating bansa. Magugulat ka na laang at hindi namatay o pinatay si Apo Lakay, bagkus ey kunware daw edsa revolution kahit na failed assassination attempt eto. Sumunod ey edsa revolution DOS daw samantalang may SC decision at eka ey RESIGNED si Erap.
      Mga katotohanan na may nakatago pang katotohanan. Tulad ng bakit hindi pa malaman ang tunay na pumatay kay Ninoy? Samantalang kung hindi sya napatay sa Mia ey sa Boston sya malamang inataque sa puso at dedbol. Parehas laang diba pero MAZ dramatic sa tarmac ng MIA may killer pa ganung ataque de corazon ey dedbol din naman?

      At Tulad ng SCS dispute ey sa katotohanan eto ey matagal ng tapos. China is in possession of twelve geographical features, Taiwan one, Vietnam twenty-one, Malaysia five and the Philippines nine. Kulang na lang rules sino amo sa mga kawatan. 😀😁

    • Wala akong pakialam sa SCS na yan. Tsaka pwede naman ang Vietnam o Malaysia mag-take ng lead diyan bakit tayo pa? Di naman responsibilidad ng Pilipinas ang Freedom of Navigation dyan. Ang mga nakikinabang diyan yung Japan, Singapore at iba pang mayayamang bansa. Pinaglalaruan nga tayo. Tignan mo Singapore, panay kausap sa atin para sa freedom of navigation diyan tapos nakikipag-mabutihan at nakikihingi pa ng tulong sa China para sa trade agreement nila. See? This is how fool Filipinos are. We are being played even by a little dot.

    • Fyke Silvano
      Freedom of navigation are for countries NAVIGATING the area but doesn’t boarder the sea. It’s our gateway and our ARBITRATION CASE AGAINST CHINA.

      The Filipino people is represented by its government and we are not the people of president pnoy or people of duterte. We are the sovereign Filipino people who INVALIDATED CHINA’S IMAGINARY NINE-DASH INDISPUTABLE SOVEREIGNTY CLAIM OVER SCS.

  • We were set aside by both the US and Chinese leaders because of our previous inept administrations. You see, these world leaders doesn’t need decades to see the difference and in less than a year under our beloved PRRD the spotlights were on us. That’s real change.

    • @Prime Kickers Pusao – Wow! Akala ko Christian ka? Did u not read in the Bible that God chooses the leaders of the nation? Why so disrespectful of God’s chosen leader? #shame

    • May I be privileged to be inform what change are you trying to imply? There are so many changes, like the new DENR secy? Changes like ginang Napoles acquitted from her illegal detention case and being eyed as state witness yet ginang Napoles swear she doesn’t know anything and she is innocent? Changes like ginang Napoles, like Lascañas, would like to change her sworn statement to knowing NOTHING TO KNOWING ALL, mga sinungaling?

    • Indeed, a big change from an inept, lazy, incompetent, and CORRUPT governance to the present governance. The only people blind to the changes are those who refuse to see it and those who are so nescient they can’t recognize the good changes!

    • May I be privileged to be inform sino ang mga NAGMAMARUNUNG NA GUSTO NG GUERRA SA CHINA?

      The mahal na pangulong digung carved our foreign policy base on dependency with China.

      The mahal na pangulong digung CAN’T EVEN WHISPER THE ARBITRAL AWARD that invalidated China’s imaginary nine-dash claim and stated that China violated our EEZ and the environment. CAN’T EVEN WHISPER, NOT A SQUEAK.

      Then our mahal na pangulong digung is wanting a VFA with China, then again the question of who is VISITING and who is HOST COUNTRY. China has INDISPUTABLE SOVEREIGNTY OVER SCS so if ever we have naval exercises then our PN will be visiting China’s PLANAVY on their SOUTH CHINA SEA?

    • Margie Belleza
      May reklamo po ako? Saan mo po napupulot ang ganun kaisipan?

      May. “?” Po sentence ko kapag may “?” Po ba ey tawag dun REKLAMO? sa amin po sa mga tag-alog ey katanungan lang po yan.

    • Rommel I don’t think this is the venue to raise your concerns and to ask those questions. We are not the authorities who can answer them and I guess even the authorities will not be able to give you the answers that you want to hear. Kadalasan ng nagtatanong ay nagtatanong para batikusin what is existing. Ang tanong ko lang, were you that vocal during Pnoy’s time? During the hostage taking of Chinese tourists na pinagmulan ng galit ng China sa atin? If yes, then what happened? Hanggang socmed ka rin lang ba nag ingay? It means what you’re doing is not effective. If you did not, that proves us right. ISA KANG DILAW.

  • Is this what the Philippines wants?
    CHINA EFFECT? MYANMAR TOO FACING A DEBT CRISIS By Dipanjan roy Chaudhury, Economic Times .After Sri Lanka, Myanmar, India’s key neighbor in the East and Gateway to Southeast Asia might be heading toward a debt crisis following China’s move forcing Myanmar to hand over majority stakes in a deep sea strategic port in the Sea of Bengal to Beijing ahead of the May14-15 One Belt One Road Summit. China is expected to take controlling stakes, as high as 85%, in Chinese-funded projects in Myanmar, even if the initial agreement for some of them was on a 50/50 basis, claimed persons familiar with recent developments in Myanmar. …….Myanmar whose economy is yet to gather steam might find it difficult to repay the loan. http://economictimes.indiatimes.com/news/international/world-news/china-effect-myanmar-too-facing-a-debt-crisis/articleshow/58634899.cms

  • Once world peace takes place getting the “elite” out, other issues will be discussed–right now with the ‘elite’ still gasping it could simply create problems, PRRD’s timing on so many other aspects, is most effective!.

  • 60 were invited; only 20 of the invited sent their heads of state but 9 of them are OFF that boasted 21st Century Silk road. Thus, there are only 11 countries showing high interest in it that includes Pres. Duterte. Half of the remaining 10 (minus the Phils.) are heavily indebted to China which made them COMPULSORY ATTENDEES. Next time, the Phippines will be the 6th.