Philippines advised to treat Chinese firms fairly


Two Chinese companies are reportedly interested in buying the Philippines’ largest shipyard, once an important US naval base in the Pacific region. Some Philippine politicians have expressed concern over a possible Chinese takeover, saying it will be a very significant national security issue.

An unexpected dilemma is brewing in the Philippines. Since the start of the presidency of Rodrigo Duterte, a marked warming of bilateral ties has stoked Chinese firms’ enthusiasm for investing in the Southeast Asian country. In 2018, China’s outbound investment in the Philippines rose by more than 8,000 percent from a year earlier.

With the Belt and Road Initiative (BRI), China hopes to shore up economic cooperation and let countries and regions along the routes share the dividends of China’s growth. Most countries don’t want to miss the opportunity, the Philippines being no exception. If the Philippine government bans Chinese companies from buying the shipyard from its current South Korean owner, it will hit Chinese people’s enthusiasm for investing in the country.

However, the explosive growth of investment has triggered concern over China’s increasing presence in the Pacific region. The mass migration of Chinese to Southeast Asia has a long history, and anti-Chinese sentiment has been floating in those countries. An increased Chinese presence will perhaps intensify anti-Chinese sentiment and complicate the issue.

It is easy to feel the influence of the US when dealing with regional affairs in Southeast Asia. Although Duterte’s strategies differ in some ways from those of his predecessors, the US still has strong influence on the Philippines. It is understandable that Manila may worry that the takeover of strategic facilities by Chinese companies could affect its relationship with the US. Some US politicians may also use the South China Sea issue to instigate reckless moves against Chinese investment.

Politicizing investment is a pervasive problem faced by China as the country pushes forward the BRI. China and the Philippines need to make joint efforts to resolve the issue. China should back the establishment of mechanisms such as the South China Sea Code of Conduct to safeguard the interests of all parties and build the foundation for win-win cooperation. As for the Philippines, the country needs to rid itself of US influence with a new understanding of the Chinese investment. We hope the Philippines can provide fair treatment to Chinese enterprises and abandon its old idea that it has to take sides between China and the US.