The Asia Pacific Pathways to Progress Foundation Inc. convened a roundtable discussion on the Prospects and Challenges of Philippine-China Economic Relations with a group of scholars from Shanghai Academy of Social Sciences (SASS) on February 20, 2017 at the Astoria Plaza, Mandaluyong City.
The discussion revolved around China’s One Belt One Road (OBOR) Initiative, investment conditions in the Philippines, and recent political developments in the Philippines and the region.
President Wang Zhan, head of the SASS delegation, opened his presentation by explaining the purpose of OBOR Initiative. He related this to its domestic version, the coastal and the Yangtze River economic belts, and spoke about how neighboring countries can benefit from the initiative. From SASS research, he identified three criteria in considering how a country is selected to become a potential part of OBOR: (1) promising economic growth, (2) security conditions, and (3) location of headquarters of regional organizations.
The delegation mentioned what they considered obstacles in Philippine investment conditions, namely restrictions on foreign investors’ shares or ownership, and high taxes. It was clarified by Filipino participants that these ownership conditions apply to all foreign investors and only on land and certain strategic industries/sectors, and moreover the taxes are the same as what local businesses are required to pay. Nonetheless, there are ongoing discussions on needed reforms, and there are currently sufficient protections in place for foreign investors’ interests. What is unique in the case of China is that given recent territorial tensions, the Philippine government sees the need to balance its hope for better economic relations with managing outstanding political issues.
When the discussion turned to Philippine politics, several participants from the Philippines expressed their sense that despite a lot of political noise, there was no need to worry about any major political changes or stability of policies. On the international political environment, Prof Wang agreed that China has benefited from the peaceful environment. “That’s why we choose OBOR—we choose peace.” Since the announcement on OBOR of Xi Jinping in 2013, Prof Wang said he has made several visits to 13 foreign countries to discuss the initiative.
SASS is the second largest among think tanks in China, ranking fifth in terms of influence according to recent studies in China. Aside from President Wang Zhan, Professors Yang Jianwen, Li Kaisheng, Shen Guilong, Wu Xueming, and Zou Yi were the other members of the delegation. On the other hand, the Philippine participants included APPFI trustees (led by Chair Atty. Popo Lotilla), academics (from DAP, UP, Ateneo),,government officials (from NEDA, Bangko Sentral, NSC, FSI) as well as representatives from NGOs (Associaton for Philippines-China Understanding) and the private sector (Asia Pacific Projects Inc., Cathay Land Inc.).