"China is not only  the world’s second-biggest economy. It is a major production base and consumer hub as well."


With the twin uncertainties engendered by the coronavirus outbreak and the termination of the Visiting Forces Agreement, there is need for reasonably quick response measures if we are to be on track with our security and development goals for 2020 and beyond. Are we prepared, or are we just now preparing such counter measures?

This is the question that should be asked of our economic and security managers as we grapple with the impact of these two major developments just two months into the new year. 

Already, a lot of business leaders are sounding the alarm especially in those sectors whose continued growth depends on the health of China, the world’s second biggest economy. When before in the middle of the second decade of the 21st century, as economic slump consumed most of the developed world, China was ever ready to take the slack, now it is itself grappling with the impact of the COVID-19 virus. It will take time before things normalize if at all, specially with the lockdown imposed by Chinese authorities themselves which in effect slowed down its motors for growth. 

We need not emphasize that China is not only the world's second-biggest economy. It is a major production base and consumer hub as well. It is a major trading partner of the US and the OECD countries -that elite club of the world's largest economies - and has expanding relations with Middle East and African countries. It also holds a substantial part of the financial instruments oiling the global economy. 

Closer to home, it is the main economy around which the ASEAN countries orbit, besting Japan, Korea and even the United States. And with its aggressive Belt and Road development initiative, that economic partnership has become even more pronounced. When before there was only one major economy—the United States—and its major allies in Asia, Japan and South Korea, plus most of Europe around which the global economy revolved, now that distinction is increasingly being shared with China. China has become such a presence the world can no longer ignore.  So, are we prepared to partner with it and its globally competitive companies to get things going? 

The way I see it, things are iffy at best. Just some days back, Honda Philipines, the country’s fourth largest car manufacturer, announced plans to shut down its Sta. Rosa plant and will supply automobiles and parts through its Asia and Oceana regional network. Not only will close to a thousand workers be laid off as a result, but hundreds of suppliers will be forced to take the heat. There is no word on the other manufacturers yet but it is not far fetched they will also look at downsizing operations or closing down altogether. And this is not just in the car  industry. A lot of sectors have become heavily embedded with China and Chinese companies and, before the coronavirus came into the scene, were planning on increased investments. 

Contrast this with the developments in our neighbors in ASEAN. Toyota Motors is reportedly moving the city production of car seats from China to Thailand while Samsung is moving parts of its production in China to India or Vietnam. A number of garments and textile companies in China likewise are also thinking of moving out, not to the Philippines but other locales. We can go on and on enumerating possibilities of partnerships in the economic and business sectors with Chinese companies—but are we prepared? 

On the other hand, our security situation will now have to be reckoned without the VFA. Although we still have 180 days to think of ways to ensure the continued partnership with the United States in security and defense matters, there appears to be a lack of preparation which attended this call. While we are focused on the need to balance our relations in the sector with our avowed pivot to an independent foreign policy, that should not deter us from coming out with a realistic substitute to the existing terms of our partnership with the US. How will we work out the sharing of intelligence? Or the inter operability of our weapons systems? Or, closer to home, how are we going to arm our forces to protect us from both internal and external threats? These and other questions should be on the table if we are to rebalance our existing partnership terms with the US while opening up new ones in pursuit of our national interest. We await with bated breath the comprehensive coping measures the administration has put or is putting in place as we secure the best terms and of course the best future for our people.

Let the new future in the face of the ever spreading COVID-19 and VFA’s end set in.

Topics: Jonathan Dela Cruz , Partnering , Visiting Forces Agreement , VFA , coronavirus outbreak , COVID-19
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