MANILA – Filipinos may not view China as a friendly neighbor given the dispute over the West Philippine Sea, but despite this, two economists believe that the Philippines can benefit from China’s recent initiative to renew the trading routes along the ancient Silk Road.
Dr. Zhang Yuyan of the China Academy of Social Sciences and Dr. Federico Macaranas of the Asian Institute of Management said the Philippines could take advantage of China’s expertise in construction, given the Southeast Asian nation’s need for infrastructure.
“There is huge, huge room for us to cooperate,” Zhang said on Thursday during a forum at AIM in Makati City.
China has an overcapacity in steel and cement, and has proficiency in building airports, seaports, railways, and roads. Meanwhile, the Philippines needs an upgrade of the aforementioned.
This is the perfect time for the implementation of such projects, added Macaranas.
In 2013, Chinese President Xi Jinping laid out his vision for “One Belt, One Road”, which has two components:
- the Silk Road Economic Belt, which brings together China, Central Asia, Russia, and Europe; links China with the Persian Gulf and the Mediterranean Sea through Central Asia and West Asia; and connects China with Southeast Asia, South Asia, and the Indian Ocean; and
- the Maritime Silk Road, which will go from China’s coast to Europe through the South China Sea and the Indian Ocean in one route, and from China’s coast through the South China Sea to the South Pacific in the other.
The plan involves creating connectivity among the countries involved, via land-road, railroad, sea-route, airways, and the Internet, among others, Zhang said.
The goal is to enable unimpeded trade, people-to-people bonds, policy coordination, and financial integration.
This will be carried out by reducing transaction costs and providing incentives for investors, among others.
According to Zhang, the proponents of the plan also look forward to a better understanding among different nations, and laying out the foundation for a peaceful coexistence.
He noted that there were some people who were suspicious of China’s intentions, and acknowledged that it was only natural for them to believe that it might have a hidden agenda.
He reasoned, however, that China’s export of its production and construction capacity was not only in the interest of the country, but of other nations whose infrastructure was insufficient.
According to the Financial Times, Chinese construction companies had already committed $25.6 billion “in infrastructure, property, and logistics developments” in countries along the Belt and Road since September 2013.
For his part, Macaranas said that the implications of the One Belt, One Road initiative would have to be clarified through “friendly discussions”.
The focus must be on building mutual trust and respect, so that the countries would have a “peaceful foundation for shared prosperity,” he added.
When asked about the encroachment of China into the Philippines’ exclusive economic zone, Zhang replied, “Let politics be politics. Let economics be economics.”
“We need to try our best to separate them to promote the cooperation of B&R to countries, and try our best to avoid the negative impact from political side,” he added.
He was confident that China and the Philippines would mutually benefit from the Belt and Road.
Macaranas further explained, “Because China is building complementarities all over the world, when we tie up with them, then we are brought to the world.”