According to Xinhua News Agency, Chinese Vice Premier Wang Qishan attended and addressed the China-Philippines Economic and Trade Forum with Philippine President Benigno Aquino III in Beijing on August 31.
During the forum, Benigno Aquino III stated that the Philippine economy is highly open to the outside world. The Philippine government will take measures to implement policies encouraging foreign investment in the Philippines, facilitate business registration for foreign enterprises, unify local regulations, create a stable, transparent, and fair business environment, and strive to build investor confidence.
International media generally believe that promoting the development of bilateral economic and trade relations will be the primary topic during Aquino's visit to China. The Philippines will also strive to attract Chinese investment, especially in the field of infrastructure construction.
China-Philippines Trade Structure Awaits Change
At the China-Philippines Economic and Trade Forum held yesterday, Benigno Aquino III stated that the Philippines' currently growing tourism, agriculture, and infrastructure sectors provide good investment prospects for Chinese companies.
“China is a major economic power. Here, I would like to invite Chinese business groups to participate in the economic influence currently forming in Southeast Asia and seize the opportunity to invest,” Aquino said. He pointed out that the ASEAN Economic Community will be established in 2015, and China's increased trade cooperation with the Philippines means further opening the northern gateway to the region. Among the approximately 300-member delegation he led to China, almost all were Philippine business leaders, in addition to government officials.
Public data shows that as of the end of June 2011, the Philippines' cumulative actual investment in China was $2.83 billion. Among this, from January to June 2011, the Philippines' actual investment in China was $51.15 million. As of the end of June 2011, China's cumulative non-financial direct investment in the Philippines was $251 million, with $33.09 million in new direct investment added from January to June 2011.
Xu Ningning, Executive Deputy Secretary-General of the China-ASEAN Business Council, believes that the Philippines' high investment in China is mainly because: first, the Chinese market is large with many business opportunities; second, the Philippines' investment in China is primarily from ethnic Chinese merchants, who are familiar with Chinese culture and share a common language.
With President Aquino's visit to China, the $7 billion worth of contracts and the five-year plan for China-Philippines economic and trade cooperation may bring about changes in the trade structure between the two countries.
According to reports, China's investment in the Philippines will focus on sectors such as manufacturing, railways, shipyards, mining, and tourism. In the field of railway construction, the initial investment amount prepared by the Chinese side was over $500 million, which is now said to have expanded to $2 billion. In addition, Cristina Ortega, Assistant Secretary for Asian and Pacific Affairs at the Philippine Department of Foreign Affairs, previously revealed that a Chinese automaker will invest at least $1.5 billion in the Philippines, and the contract may take effect immediately.
According to Cristino Panlilio, Undersecretary of the Philippine Department of Trade and Industry, an agreement has been signed for the State Grid Corporation of China's investment project in the Philippines. Furthermore, China Trends Holdings Limited also plans to invest $1 billion in the Philippines. He also revealed that the Philippines has received investments for multiple projects from the China-ASEAN Investment Cooperation Fund, including a geothermal power plant and an industrial park in Pampanga province.
South China Sea Disputes and Oil Cooperation
Due to the sensitivity of the situation in the South China Sea, negotiations between China and the Philippines on joint oil exploration in the sea area are still ongoing.
According to Xinhua News Agency, regarding the South China Sea issue, Benigno Aquino III said that both the Philippines and China have expressed their intention to resolve the South China Sea issue in accordance with international law. Both sides hope to resolve the issue through peaceful means.
It was previously reported that the cooperation agreement between Sinopec and the Philippine side is included in the $7 billion economic and trade cooperation agreement. The Philippine side had announced that Sinopec is prepared to invest $1 billion for oil exploration in the disputed waters.
Philippine Presidential Spokesperson Edwin Lacierda believes that although the two sides have not yet reached an agreement on relevant details, “the fact that both sides are continuing to hold consultations while holding different opinions is a good sign.” He also stated that consultations between the Philippines and China regarding oil exploration will be held at the ministerial level.
The intention for China and the Philippines to cooperate on oil projects in the disputed waters of the South China Sea did not just emerge recently; it began as early as the administration of former Philippine President Gloria Macapagal Arroyo.
