Growth of trade and economic prospects to spur mutual cooperation
Business representatives hold trade talks at the Philippines booth during the 22nd China International Fair for Investment and Trade held in September 2022. (ZHANG BIN / CHINA NEWS SERVICE)
Enhanced China-Philippines economic and trade cooperation will benefit both countries and add new growth momentum to the regional and global economy, said business executives and experts, adding that the two populous developing countries share huge trade complementarity, entwined interests and great economic cooperation potential.
Such an optimistic outlook is underpinned by the two countries' shared economic interests and their efforts to enhance synergy between the Belt and Road Initiative and the Philippine government's national development programs, such as the Build, Build, Build — BBB — program and the AmBisyon Natin 2040 — a long-term vision to end poverty in the country by 2040, and provide more development opportunities for bilateral trade and pragmatic economic cooperation.
BBB is a large-scale infrastructure program for roads, bridges, airports, seaports, flood management, water resources, energy, communications and solid waste management.
Synergizing the BRI and other national development strategies will scale up trade and investment in fields such as the digital economy, traditional and new infrastructure, clean energy, agriculture and modern services between China and partner countries, as well as create a new path for global governance reform in the years ahead, said Wei Xiaoquan, a researcher specializing in regional economic development at the University of International Business and Economics in Beijing.
He said that China and the Philippines are also leveraging their comparative strengths and further widening market access to each other. These measures have encouraged companies from both sides to enter their markets.
State-owned China Railway Group, or CREC, has been heading in that direction. Its consortium formed by China Railway No 3 Engineering Group and China Railway Engineering Design and Consulting Group signed a contract worth around 17.55 billion yuan ($2.54 billion) with the Philippines' Department of Transportation in 2022 to build the Philippine National Railway South Long-Haul Project.
The 380-kilometer-long railroad stretch includes 23 stations, with a designed speed of passenger trains at 120-160 kilometers per hour. The project is expected to be completed within 36 months.
The first section of the entire line will cross four provinces and two regions. The project, implemented by the Philippine government and the country's railway operator, will consist of a 565-km rail system connecting the metropolitan area of Manila with the southern Luzon provinces of Sorsogon and Batangas, according to Railway Pro, a global provider of railway business information.
After its completion, the new rail connection will serve up to 14.6 million passengers each year. During the construction phase, the project is expected to generate more than 5,000 direct jobs per year, said Railway Pro.
Once fully operational, the line will cut the travel time between Metro Manila and Bicol from the current 12 hours by road to four hours by rail. Passenger trains will run at a speed of up to 160 km/h, while the freight trains will run at a speed of up to 100 km/h.
Apart from building transportation infrastructure projects, a consortium, consisting of China Southern Power Grid and Power Construction Corporation of China, or PowerChina, has also contributed to the development of the Mindanao-Visayas high-voltage direct current line project in the Philippines. The project currently is in the debugging stage.
The project mainly includes the construction of two 350-kilovolt convertor stations and two direct current grounding electrodes as well as the renovation and expansion of five alternating current transformer substations. The project is the first of its kind to adopt designs that can resist a magnitude 9 earthquake and high wind speeds, said Zhao Zhihao, PowerChina's country representative for the Philippines.
The project is expected to promote the power connectivity of the country and has provided nearly 2,000 jobs for local people. Moreover, equipment and building materials valued at more than $35 million have been purchased from local businesses.
In addition to assisting the Philippines to ensure power supplies, he said this project also promotes Chinese direct current power transmission technology, electric equipment and engineering management to other parts of the world.
As the Philippines strives to boost national development through science and technology, and sharpen its competitive edge in tourism, Marshall Louis M. Alferez, consul general of the Philippines in Guangzhou, said China's Guangdong-Hong Kong-Macao Greater Bay Area comes as an important partner, given its technological advantages and massive consumer market.
There has been a lot of interaction and engagement between the Philippines and the Bay Area, with 40 percent of the Philippines' trade with China passing through Guangdong province, and the Southeast Asian nation accounting for around 10 percent of Guangdong's trade with members of the Association of Southeast Asian Nations, he said.
"We have a large number of Filipino companies that are active and have investments in the Bay Area … Our food conglomerates are here. Our national air carriers are also active here … We also have around 250,000 Filipino professionals and service workers in Guangdong, Hong Kong and Macao. They can help contribute to the economic prosperity of the region," said Alferez.
"There are also certain Chinese companies within the region that are doing extremely well in the Philippines, such as Tencent, Huawei and BYD. They are typical examples of success stories of Chinese firms investing in the Philippines."
Alferez said the efforts by governments in the 11-city cluster to enhance connectivity and harmonize policies and regulations within the region are of great significance as it will make it easier for Filipino companies to tap into the Chinese market and create a favorable environment for the smoother movement of trade, investment and talent between the Philippines and China.
Echoing that sentiment, Lin Jiang, a professor of economics at Sun Yat-sen University in Guangzhou, said the Bay Area has a complete supply chain in all aspects.
He said the area is also supported by a number of international airports, several major ports in the world, two of the world's fastest-growing stock exchanges and an international financial center. There are plenty of top professionals to assist both global and domestic entrepreneurs to turn innovative ideas into successful business ventures.
Bolstered by new opening-up policy measures, fast-growing sectors like healthcare, high-end manufacturing and modern services, multilateral trade initiatives and high-standard business platforms, such as the Regional Comprehensive Economic Partnership pact and the annual China International Import Expo, the actual use of foreign direct investment into China expanded 9.9 percent on a yearly basis to 1.16 trillion yuan during the January-November period of 2022, statistics from the Ministry of Commerce showed.