Economic exchanges between
China and the Philippines have reached a peak within the
framework of bilateral ties that have been mainly driven by China's
commitments to the WTO upon accession in 2001. The facts show an
open China not only does not harm the economy of the Philippines
but also actually boosts it.
The total value of bilateral trade has increased greatly and
trade surplus is on the side of the Philippines.
According to records from Chinese customs, the significant
growth of exports from the Philippines to China from 2000 to 2002
helped expand trade turnover from US$3.365 billion in 2000 to
US$5.259 billion in 2002, achieving an annual increase of 33
percent. Total trade value for both sides increased even faster in
2003 and 2004, reaching US$9.4 billion and US$13.33 billion
increases of 78 percent and 42 percent respectively.
The Philippines has enjoyed a favorable trade balance of
US$1.175 billion in 2002, US$3.212 billion in 2003 and US$4.09
billion in 2004, a total reversal in the history of bilateral
trade.
Chinese investment in the Philippines is small but expanding.
According to records from China's Ministry of Commerce in
October 2003, about 40 Chinese companies and corporations are
investing in the Philippines through joint ventures with local
counterparts. The total contracted amount reached US$39.60 million,
US$16.41 million of which came from the Chinese.
Total China investment in the Philippines in 2000 and 2001
accounted for only 0.2 percent of the Philippines' total foreign
investment. In 2002, the percentage increased to 2 percent. In
2003, major investors from China were in IT-enabled services, hotel
and commercial complex operation, energy generation, transport
equipment and exports of silicon crystals and micro silica.
During her official visit to China from September 1 to 3, 2004,
President Gloria Macapagal-Arroyo witnessed some of the trade
agreements to be signed between Filipino and Chinese
businessmen.
Among them was the memorandum of understanding between
Philippine Coco Technologies and China Guangzhou Rivers Enterprise.
A supply contract of baled coco fiber products was also signed
between Philippine Environmentech Products and Guangzhou Tiahe Yi
Xin Fiber Product.
Chinese data show there have been rapid increases in investment
in China from the Philippines, contracted or utilized, since
2002.
In 2004, the contracted investment from the Philippines reached
US$684 million, more than double the figure in 2002. The utilized
investment from Filipino merchants reached US$233 million, an
increase of 25 percent over the year 2002. They have so far enjoyed
good returns on their investments in China.
Other forms of economic co-operation inspired by China's WTO
entry include contracted projects and labor co-operation, financial
co-operation and tourism.
According to official Chinese sources, up to the year 2000 China
had completed more than 400 construction projects in the
Philippines. This momentum has been maintained since China's
accession to the WTO.
In 2001, 37 joint construction projects with a total value of
US$74 million were completed, and another 33 construction
agreements were signed in 2002 with a total value of US$184.7
million. From January to May 2003, 10 contracts were signed with a
total value of US$45.2 million, while turnover was US$31.8 million
in the period.
With the expansion of financial co-operation, the two countries'
importers and exporters have been able to settle commercial
transactions without transiting through the banks.
In order to attract more Chinese tourists to the Philippines,
the Department of Tourism opened a tourism office within the
Philippines embassy in Beijing in July 2004. The office is aiming
to raise the number of Chinese tourists to more than 60,000 a 100
percent growth in the near future.
(China Daily January 16, 2006)
