CHINA SPENDS MORE ON INFRASTRUCTURE each year than North America and Western Europe combined. That’s according to a new study published last week by global management consulting firm McKinsey & Company. The fact that China is investing so much in roads, rails, ports—and everything else that keeps society up and running—hints at big trends that could shape the global economy in the coming decades.
RCEP is a proposed free trade agreement (FTA) between the 10-member Association of South East Asian Nations (Asean) bloc and the six states with which they have existing FTAs - Australia, China, India, Japan, South Korea and New Zealand. Negotiations formally began in November 2012 at the Asean summit in Cambodia.
Initiated by ASEAN in response to the US-led Trans Pacific Partnership, it is, in part, designed to leverage more value out of the existing five ASEAN free trade agreements with other RCEP countries and the plethora of bilateral FTAs negotiated over the past 15 years among the RCEP countries themselves. But RCEP has the potential to be much more than simply another mega-regional free trade agreement.
While the Asian economies are already highly integrated, it is an interdependence which has grown under the current global trading regime, not through bilateral or regional trading arrangements. Staggeringly, ASEAN, Japan, China, Korea, India, Australia and New Zealand – which comprise the RCEP group – already had a bigger share of global GDP measured in real terms than the TPP countries in 2007. Bluntly put, the RCEP group is where the global economic dynamism is, and it is a massive opportunity for Australia and for the region.
And the race to dominate SEA e-commerce begins...This is the largest overseas acquisition of Alibaba. Instantly giving it access to 6 markets of SEA.
UNFAZED by Alibaba Group Holding Ltd.’s acquisition of Lazada Group SA, local e-commerce players are investing in logistics to ramp up their operations, seeing the deal as a vote of confidence in the Southeast Asian region’s online shopping industry.
Philippine nickel ore producers have been the biggest suppliers to top consumer China since 2014 when Indonesia imposed a ban on metal ore exports.
A group of Philippine nickel ore producers, which does not include Nickel Asia, have agreed to slash output and shipments this year by as much as 20 percent in response to a slide in prices to the lowest in over a decade on weak Chinese demand.
The benchmark nickel on the London Metal Exchange was trading at $8,950 per tonne on Tuesday. It had tumbled to $7,550 on Feb. 11, its lowest since 2003, due to weak Chinese demand and a weak global outlook for stainless steel consumption.
Latest data showed China’s imports of nickel ores and concentrate from Philippines totalled 1.5 million tonnes in the first two months of the year, accounting for 90 percent of the total and down 24 percent from a year earlier.
BY ALMA MARIA O SALVADOR AND DAISY C SEE
With a scenario based on the end of internal security threat from insurgency, a national security policy that centralizes the position of maritime security should occupy the agenda of the next Philippine president.
Opportunities are great, in part because of heightened public consciousness generated by Benigno Aquino III’s responses to China’s incursions in the Philippine-claimed Kalayaan Island Group and Bajo de Masinloc (Scarborough Shoal), since 2010. Whether by diplomacy, naval force modernization, revivalism of the US-Philippines military alliance though the Enhanced Defense Cooperation Agreement or through arbitration, these policy responses have set the stage for driving maritime sovereignty and maritime concerns at the centre of Philippine foreign policy.
China’s blockade of Bajo de Masinloc from Filipino fishers and its recent island-building and reef reclamation in the South China Sea have imposed an overriding regional security threat to ASEAN and the US, and principally to the Philippines and Vietnam who have both responded with naval force modernization. While geopolitics and assertion of sovereign rights are two of the dominant angles that are played up in the analysis of the West Philippine Sea(WPS) issue, they do not not spell out the entirety of Philippine maritime security interest.
To illustrate the impact of the dispute on the ground: China has effectively banned small fishers from Bajo De Masinloc, which is “one of the oldest known fishing grounds” in the province of Zambales. Lingering dispute has threatened the community’s food and livelihoods security, primarily of the fisherfolk who are in fact vested by the 1998 Philippine Fisheries Codewith preferential access rights. At the local level, the dispute has necessitated the intervention of local actors such as the Municipal Fisheries and Aquatic Resource Management Committee (MFARMC), a multi-stakeholder body whose recommendations are designed to advance the municipal fishers’ rights to coastal resources in municipal waters. As it is, the MFARMC’s main agenda in Bajo de Masinloc has involved the Bureau of Fisheries and Aquatic Resources (BFAR) in the former’s request for the installation of the payao, or fisheries aggregating devises in waters where fishing is unthreatened by Chinese maritime law enforcers.
Moreover, the Asian Maritime Transparency Initiative has earlier reported that tremendous ecological damage of China’s dredging on the vast and biodiverse reefs in the South China Sea / WPS has reached the expanse of 311 hectares, not to mention BBC’s report of the evident measures by Chinese civilians to destroy reefs for sale.
So, what does this mean for Philippine national security policy in the next five years? Firstly, the dispute affects a complex of security issues as it infringes on the human, national and environmental securities including ASEAN security.
In his Jaime V Ongpin Lecture in Ateneo de Manila last October 2012, University of the Philippines (UP) College of Law and director of the UP Institute for Maritime Affairs and Law of the Sea, Prof Jay Batongbacal has argued the importance of the “natural, regional and global contexts” of the WPS issue. He focused on how sustainable resource management of mineral and fishery resources, the development of a maritime economy, and the promotion of good order at sea, literally form an “tangled web of boundaries” with other imperatives such as maritime defense and the assertion of sovereign rights over the Exclusive Economic Zone.
Decision makers should not compartmentalize the multi layer of imperatives of the West Philippine Sea issue, but instead incorporate an inter-mestic lens that is essential in drawing out the country’s maritime interest. A larger challenge, conveners and authors of the White Paper of the Informal Expert Group on the WPS published in August 2012 stood not only for the maritime defense of claimed territories but for the archipelagic defense of good order at sea, particularly against non traditional security threats of illegal fishing and other forms of environmental transgressions, transnational criminal activities such as piracy, human/ drug trafficking, smuggling, etc.
Prof Batongbacal said that recognition of the multiple drivers/ imperatives to the WPS issue will widen our repertoire of policy responses, while increasing the chances of regional cooperation and joint action.
Alma Maria O Salvador, PhD, Assistant Professor of Political Science and Daisy See, Director of the Chinese Studies Program are both faculty members of Ateneo de Manila. They are currently working on naval modernization research supported by the School of Social Sciences.
by Austin Ong.
The Philippines became the last member to join the China-led Asian Infrastructure Investment Bank. Its decision to join the AIIB suggests many things.
For one, it could a signal a more economics-focused new year for the Philippines. However, concerns remain. In a Center for International Relations & Strategic Studies commentary (2015), some of these include the ambiguity over the kind of lending policies, transparency standards, and governance principles AIIB will adopt and whether it will meet the environmental safeguards and social standards that more established international development banks such as ADB and World Bank adhere to. Furthermore, since AIIB is an initiative of China, there are suspicions that it may be used as a tool to advance Beijing’s interests.
Despite a territorial dispute with China in the West Philippine Sea, the Philippines announced on Wednesday that it would become a founding member of the Beijing-led Asian Infrastructure Investment Bank (AIIB) that aims to finance developing countries’ infrastructure needs.
The United States and Japan, the closest allies of the Philippines, are snubbing AIIB, viewed by some as a rival to the World Bank and the Asian Development Bank (ADB).
The Department of Finance (DOF) said Philippine Ambassador to China Erlinda F. Basilio will sign AIIB’s articles of agreement on behalf of the Philippine government at China’s Ministry of Foreign Affairs on Thursday—the last day for prospective members to do so.
Hence, the Philippines will be the last among AIIB’s 57 prospective founding members to sign the articles of agreement, which already came into force on Dec. 25. (See list of members on this page.)
The Beijing-headquartered lender is expected to start operations early next year with an opening ceremony scheduled for Jan. 16-18.
Even as the majority of the AIIB’s founding members already signed the articles of agreement as early as June, President Benigno Aquino III granted Finance Secretary Cesar V. Purisima, or in his absence Ambassador Basilio, full powers to do the same only on Tuesday.
Communications Secretary Herminio Coloma Jr. on Wednesday confirmed that Mr. Aquino had “approved the recommendation of the DOF that the Philippines join the AIIB.”
The move by the Philippines, a key US ally in Asia, comes after it took Beijing to a United Nations tribunal in a bid to challenge its extensive claims in the South China Sea, or what Manila calls the West Philippine Sea.
“The two (AIIB membership and the maritime dispute) are totally unrelated,” Department of Foreign Affairs spokesperson Charles Jose said.
“The decision of the Philippines to be one of the founding members of the China-led AIIB is based on the country’s economic development imperatives,” Coloma told AFP.
“There is no linkage between this decision and the issues raised by the Philippines with regard to maritime entitlement claims” in the South China Sea, Coloma added.
Asked whether the South China Sea dispute would affect the Philippines’ AIIB membership, Chinese foreign ministry spokesperson Lu Kang told a regular briefing: “I think the operation of AIIB will be decided by AIIB rules, which are made by all the members.”
The Albert del Rosario Institute (Adri), an international and strategic research group focusing on the Philippines and East Asia, said the country’s decision to join AIIB was a positive development that would have an impact beyond the Aquino administration.
“Signing up with AIIB will be a good move for the country that will expand opportunities for much-needed investments that will accelerate the growth of job-generating enterprises for as long as the engagement complies with Philippine and international laws,’’ said Adri president Dindo Manhit.
“This also shows that though there are ongoing issues in the West Philippine Sea, we are consistent in recognizing international laws as an enabling framework for peaceful arbitration of territorial conflicts and encouraging a productive economic environment,’’ Manhit added.
For about half a year, the Philippines deferred from signing the articles of agreement.
Last Monday, the Office of the President was still getting more information from the DOF on the country’s participation in other multilateral lenders, such as the Manila-based ADB and the World Bank, sources said. The Philippines is also a member of the International Monetary Fund, which is based in Washington like the World Bank.
Initial paid-in capital
The Philippines must shell out $196 million, payable in five years, as indicative paid-in capital in AIIB. Members must pay the initial installment of their respective paid-in capital before the end of 2016.
Under the articles of agreement, the Philippine share in AIIB’s capitalization requirement totals $979.1 million for capital subscription. The bank’s total capital stock is $100 billion.
The Philippines’ membership would be still subject to the availability of funds for its share of AIIB’s capitalization, as well as Senate ratification.
AIIB members, nonetheless, have until December next year to have their respective memberships ratified by their governments.
In a statement, the DOF said the Philippine government “believes that AIIB will augment and complement existing multilateral institutions in accelerating economic growth.”
“Our shared pursuit of growth and development has only become more challenging as the global environment becomes increasingly complex. We thus welcome platforms where countries can work toward shared development goals in the spirit of partnership,” Purisima said.
“In a globalized world, connectivity is the name of the game. AIIB is a promising institution addressing investment needs and will help close financing gaps in many countries. I also see this as a chance for greater collaboration with member-countries, especially with Asean, on regional infrastructure goals,” the finance chief added.
Infra financing needs
The DOF noted that an earlier ADB study had estimated the country’s infrastructure financing needs from 2010 to 2020 at more than $127.1 billion, while the Association of Southeast Asian Nations (Asean) has an infrastructure financing gap worth almost $1.1 trillion during the 10-year period.
“The Philippines, the ADB projects, stands to gain from closing this gap: accumulated reduction in trade costs is estimated to be at 15.6 percent of trade value and will result in a gain of about $220 billion in real income,” the DOF said.
However, pundits believe that the AIIB is being positioned as an alternative to, if not a competitor of the mainly US-backed multilateral lenders—the World Bank and ADB.
AIIB is also seen as a means for China to wield more power in the regional, if not, global economy.
Last year, the Philippines, through the DOF, signed a nonbinding agreement to join discussions aimed at threshing out issues ahead of AIIB’s formal establishment.
“The Philippines has taken the matter of our membership in AIIB very seriously. We have participated in the discussions leading to its creation, believing that good governance is just as important in our international institutions just as they are at home.
“We are confident that the bank’s organization design and oversight mechanisms are committed to transparency, independence, openness and accountability. We are likewise optimistic that AIIB’s decision-making processes are geared toward making it a lean, clean, green institution run like a true multilateral,” Purisima said.
Concerns about governance
Earlier, Purisima disclosed that the Philippines had “concerns about the governance of AIIB.”
“We do hope that AIIB will function based on purely financial basis and not political,” Purisima said at a conference of American think tank Center for Strategic and International Studies in the United States last June.
Moving forward, Purisima said the Philippines “stands to gain from signing on as a founding member.”
“We can look forward to deepening our country’s technical expertise in infrastructure as we expand bankable projects. Further, as AIIB has no restriction on the procurement of goods and services from any country, we may foresee market expansion for infrastructure-related industries, widening job and business growth opportunities,” he said. With reports from Jerry E. Esplanada and AFP
By: Ben O. de Vera
Read more: http://business.inquirer.net/204830/ph-joins-china-led-intl-bank#ixzz3wSjH3Wi1
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菲律宾国公何塞·黎刹的名片。The calling card used by our National Hero while he was in exile in Hong Kong (1891-1892). This may indicate that Philippine National Hero dr Jose Rizal had also befriended Chinese friends.
By Austin Ong
Quezon City, Philippines: Key business group leaders, scholars and the media gathered to discuss the economic significance of the AIIB, TPP, AEC, and the New Silk Road on the Philippines at a media forum organized by the Integrated Development Studies Institute (IDSI), Philippine Chamber of Commerce and Industry (PCCI), Pandesal Forum, Philippine-Asia Institute for Strategic Studies, and the Center for People Empowerment in Governance (CenPEG) last November 11, 2015 at the Kamuning Bakery.
The forum’s objective was to provide a platform to discuss the Philippine’s position in the current trade grouping issues—namely, the China-led Asian Infrastructure Bank (AIIB), the USA-led Trans-Pacific Partnership (TPP), the ASEAN Economic Community (AEC), and the New Silk Road Initiative funded by China. The panelists included Ambassador Donald Dee of PCCI; Mr. Henry Lim Bon Liong, Chairman and CEO of the Sterling Paper Group of Companies and SL Agritech Corporation; Professor Benito Lim of the Ateneo de Manila University, and Atty. Jemy Gatdula of University of Asia and the Pacific and a columnist at the BusinessWorld. The discussion was moderated by Mr. Wilson Lee Flores of the Philippine Star (who also happens to be the owner of Kamuning Bakery). Reactors included Professor Bobby Tuazon of the CenPEG and businessman Mr. George Siy of the Anvil Business Club.
The discussion aimed to clarifying some misconceptions surrounding these trade programs which inevitably would have a significant impact on the country and her people. More importantly, the group tackled the central question: how would the Philippines benefit from all these economic programs? The participants shared the business and private sector concerns on the matter.
According to Ambassador Dee, the Philippines is entering its demographic ‘sweet spot’—defined as the period where optimal number of the country’s population would be in the working age and have few dependents—and fully exploiting this ‘demographic window’ will be highly dependent on these economic trade programs, which will inevitably transform the global landscape whether the Philippines is prepared or not.
Atty. Gatdula pointed out that the Philippines has not taken full advantage of its free trade agreements (FTAs) and the government is over-burdened with the high cost of doing business.
The champion of hybrid rice, Mr. Lim Bon Liong, supported this with numbers from the agricultural sector: the numbers he shared tellingly showed that the Philippines is not lacking in resources: a government provided safety-net and a national agricultural policy may easily propel the country not only to rice self-sufficiency but to compete in an open market. He continued ominously however, without the vital government support, the Filipino farmers might soon be in jeopardy with the deluge of cheaper rice that are set to enter post-AEC.
There is also a serious need to study the details of the accompanying proposals and focus on how the Philippines will be affected in the long term, according to Professor Benito Lim. He added, the focus of the study should be on how these economic programs can benefit the Philippines. In addition, the discussion touched upon unfulfilled promises of liberalization and free trade on the Philippines. Professor Tuazon shared for instance how the poverty incident rate in the Philippines has grown even amidst regional integrations such as the development of ASEAN and, because of this, we need to identify the root causes and study how improvements may be had with the proposed programs.
Mr. Siy, one of the host of the forum, said, “We are hoping through such forums, we can examine global economic developments more objectively and identify how the Philippines can best position itself to take advantage of the milieu of choices facing it.”
The event hopes to encourage more discussion in the public.
(Reported by Austin Ong. firstname.lastname@example.org)
Officials from Xiamen University and Embassy of the People’s Republic of China in the Philippines (left) and UP officials (right) unveil the marker of the CI-UPD. From left: Dr. Wu Jianping, Mao Tony Wen, Pan Feng, Zhan Xinli, H.E. Zhao Jianhua, Zhu Chongsi, UP President Alfredo Pascual, UPD Chancellor Michael L. Tan and Prof. Lourdes M. Portus, Special Assistant to the President.
(OCT. 13)—The Confucius Institute at UP Diliman (CI-UPD) will “serve as a strong bridge to connect and to enhance the cooperative exchanges between the two countries (China and the Philippines),” said Xiamen University President Zhu Chongsi at the inauguration of the CI-UPD on Oct. 12, 9 a.m. at The Forefront, University Theater.
The CI-UPD was established through an agreement between UP and the Confucius Institute Headquarters of China or Hanban, led by its Chief Executive, Mme. Xu Lin, on Dec. 7, 2014. One of its objectives is to strengthen the educational and research cooperation between China and the Philippines, particularly in the areas of language, art, literature, film, culture, the natural and social sciences and engineering, medicine, agriculture and aquaculture.
XU Vice President Zhan Xinli, who spoke on behalf of Xu Lin, Chief Executive of the Confucius Institute Headquarters and Director-General of Hanban, added that “...through our joint effort, the Confucius Institute and UP will provide quality service for the local people to learn about Chinese language and culture. It will make positive contribution to enhancing the relations between the people of China and the Philippines.”
Presently located at the Advanced Science and Technology Institute along C.P. Garcia Avenue, Technology Park Complex inside the UPD campus, the CI-UPD aims to support and promote the development of Chinese studies in UPD to include Chinese language, history, art and culture.
It is the fourth and latest Confucius Institute to be established in the Philippines. The first three are at the Ateneo de Manila University in Quezon City and Makati City, at the in Bulacan State University in Malolos City, Bulacan; and at the Angeles University Foundation in Angeles City, Pampanga.
The Confucius Institute is a non-profit public educational organization that promotes Chinese language and culture. It is affiliated with the Ministry of Education of the People’s Republic of China and is usually likened with the Goethe-Institut of Germany, Alliance Française of France and the British Council of the United Kingdom, which promote the language and culture of Germany, France and United Kingdom, respectively.
At the inauguration, guests were welcomed by a dragon and lion dance performance by the UP Wushu Club at the University Theater Lawn. They were also treated to select cultural performances by the UP Filipiniana Dance Group, the UP Tugtugang Musika Asyatika and Tellu Bituun Bagani. Zhang Lei and Li Yang from XU performed traditional Chinese music, with Zhang on Gu Zheng and Li on Pi Pa.
Among the guests were H.E. Zhao Jianhua, Ambassador of the People’s Republic of China to the Philippines, the heads of the other Confucius Institutes in the country and representatives from various Chinese schools.
They were also given a short tour of the CI-UPD’s offices at the Advanced Science and Technology Institute along C.P. Garcia Avenue after the launch.--Anna Regidor, image by Austin Ong.
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