"China is looking forward to seeing this country attain a degree of economic self-sufficiency, development and prosperity."
Philippine trade with China is the greatest insecurity of the US in its relations to this country. Knowing this, the US must by now concede that its dominance has been lost forever. Losing that advantage is to lose its economic and political influence in this part of the world.
Since the opening of trade and diplomatic relations with China, the US has slowly been on a downward slope. China today stands as the country’s number one trading partner surpassing countries once thought as impregnable business partners. China has surpassed Japan and is now fighting to keep its lead over South Korea and the Asean.
Philippine trade with the US took a steep decline after the country decided not to renew the colonial ties known as the Laurel-Langley Agreement in 1974. The Agreement was a carryover of the much discredited “parity rights” or Bell Trade Act of 1946 which our politicians grudgingly ratified with the thought the US would hasten to grant to us our political independence.
That agreement extended to the Americans the same rights to do business in this country. The agreement was renewed in 1954 under the name of Laurel-Langley Agreement. It was also called preferential trade because it accorded preference to our sugar export under the quota system.
The lure of sugar quota hastened the consolidation of lands to sugar plantations known as the “haciendas” and aggravated the local insurgency alongside with the rise of the ultra-rich landlords known as the sugar barons. The era of the Laurel-Langley Agreement reduced the country to a colonial economy wholly dependent on the export of one crop. Their generation is represented today by the notorious and corrupt politicians in the country.
The sugar barons became so influential that they practically control the economic as well as political policies of the country. It was not until President Marcos opted not to renew the Laurel-Langley agreement beyond 1974 that brought about economic changes for the country.
First, it allowed the country to break from the bondage of colonial enslavement rejecting the view that should the US abandon our agricultural exports the country will economically sink deeper into the morass of poverty. The US purposely deceived us about their demand for our sugar when in truth it was the result of the embargo they imposed on Cuban after Castro won the revolution in the early 50s.
Second, the loss of the sugar quota gave the country the opportunity to diversify its exports, and the landlords grudgingly have to give up their landholdings. In less than three years after the loss of our main export, Japan easily dislodged the US as our leading trading partner. That speeded up the land reform and convinced the government that export of manufactured goods is our key to industrialization.
Third, the decoupling of the dollar from the gold standard in 1973 lessened the value of our agricultural exports and we cannot substitute their loss with manufactured products since we barely have such industries. Our continued dependence on sugar for our export stalked poverty to our people with the contractual plantation workers known as sacadas becoming pry to communist recruitment.
Our opening of trade and diplomatic relations with China provided the country the opportunity to resolve the nagging problem of insurgency that festered us through decades of poverty and underdevelopment.
Our decision to cut the umbilical chain of colonialism was a significant event in the country’s quest for economic liberation. It was a historical coincidence for while some have their misgivings to give up our main source of foreign exchange earnings, the opening of diplomatic ties with China on June 6, 1975 came as a timely saving grace.
Since then, the country took the multiple approach of diversifying our exports and by joining economic trade blocs that promote free trade among members.
According to Ambassador Huang Xilian, Philippine exports to China leaped by 43.3 percent or $1.22 billion making that country the largest accounting to nearly 20 percent of our total export. For the first time, the monthly growth rate of Philippine exports shifted from negative to positive. Over the first three quarters, China remained the country’s largest trading partner and largest source of imports. For this year China became the second-largest export market of Philippines products.
Chinese investment in the Philippines also experienced a surge. China Telecom has joined Filipino partners to invest more than $5 billion in Dito Telco. Panghua Group is putting in $3.5-billion to build a steel plant to bring jobs to Filipinos which, sad to say, was first built by the Marcos administration but was sold to Malaysia in the name of privatization only to be finally dismantled. China’s online learning firm has introduced over 27,000 Filipino English teachers to teach Chinese students and is poised to hire another 30,000 Filipinos.
Chinese enterprises have been playing a positive role in stimulating the economy, creating jobs, improving people’s livelihood and providing service to the community. According to statistics, 50 major Chinese enterprises in the Philippines have directly and indirectly created about 40,000 jobs for Filipinos. Since the outbreak of the pandemic, Chinese enterprises have donated nearly 10 million pieces of face masks, PPEs and other medical supplies to the Philippines. Recently, Philippine and Chinese enterprises rushed to lend a helping hand to affected areas by donating tons of food and other relief supplies.
On the other hand, the country’s trade with the US accounted to $1.73 billion in October. The Philippines’ top 15 trading partners in 2019 are: 1) United States: US$11.5 billion; 2) Japan: $10.6 billion (15.1 percent); 3) China: $9.6 billion (13.7 percent); 4) Hong Kong: $9.6 billion (13.7 percent); 5) Singapore: $3.8 billion (5.4 percent); 6) South Korea: $3.2 billion (4.6 percent); 7) Thailand: $3 billion (4.2 percent); 8) Germany: $2.7 billion (3.9 percent); 9) Netherlands: $2.3 billion (3.2 percent); 10) Taiwan: $2.2 billion (3.2 percent); 11) Malaysia: $1.8 billion (2.6 percent); 12) Vietnam: $1.3 billion (1.8 percent); 13) Indonesia: $821.6 million (1.2 percent); 14) France: $798.3 million (1.1 percent); and, 15) Mexico: $670.8 million (1 percent).
If the Philippines combines its exports to China and Hong Kong, that could reach an aggregate of $19.2, way ahead of the US by $7.7 billion. We are saying this because Hong Kong is part of China, and the US has already scrapped the special economic status of Hong Kong after China approved the national security law for Hong Kong. Trade between Japan and the US accounted for $.09 billion, with China the difference is $1.9 billion.
Today, China is leading in providing economic and developmental projects. This means that China is looking forward to seeing this country attain a degree of development and prosperity. As Ambassador Huang Xilian would put it, China is steadily pushing forward a synergy between the “Belt and Road Initiative” and the administration’s “Build, Build, Build” to one that is reciprocally beneficial to both or a win-win approach to development.
Ambassador Xilian said the two countries have completed 11 intergovernmental projects, covering drug control, anti-terrorism, food security, radio and television services, and other fields. Six projects are under implementation and 18 are under planning, involving infrastructures such as roads and railways, flood control and irrigation, and other livelihood projects. Such approach is indicative that China is looking forward to seeing this country attain a degree of economic self-sufficiency, development and prosperity.
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