Marcos Jr should follow his father on China

If the past is any reference, the current rift between the Philippines and China is an aberration. The two countries are now marking the golden anniversary of official relations but trade and people-to-people linkages go back centuries.

Interestingly, formal ties were forged by President Ferdinand Marcos Sr, father of the incumbent leader, Ferdinand Jr. The elder Marcos seemed to have a good read of the changing times and foresaw China’s potential. At a time of geopolitical rigidities, he expanded the country’s diplomatic horizons.

Fast forward to the present, as bilateral ties fray, the father’s bold move continues to offer valuable lessons for his son. The country’s gulf with China is not ideological, and China should not be narrowly viewed through a single lens.

The earliest recorded barter between Chinese and Filipino natives dates back to the 9^th century. From 1565 to 1815, Manila served as a global entrepot, facilitating trade between China and Europe via ocean-going galleons built by Filipino craftsmen.

This made the city home to the oldest Chinatown. Intermarriages during the Spanish colonial period gave rise to a mestizo class, from which many national heroes, such as Jose Rizal and Andres Bonifacio, hail. During World War II, ethnic Chinese guerrilla units, such as the Wha-Chi, joined the underground resistance.

The Cold War put the Philippines and China in opposite camps. But in a bold stroke, Marcos Sr breached that divide. He ended Peking’s support to local communist rebels and got petroleum from China as a global oil crisis raged. He gave citizenship to ethnic Chinese in the country through naturalization, paving the way for their integration into Philippine polity.

With their legal status secured, some of these Chinese entrepreneurs would later become taipans and philanthropists, giving back to their new homeland. They were also among the pioneer investors during the early years of China’s reform and opening up, helping the land of their forebears.

Marcos Sr also staked the country’s claim in the Spratlys, occupying large atolls that form the nucleus of the country’s smallest town. Manila began exploring oil offshore west Palawan. Thus, Marcos’ astute move gave social, economic and security gains for his country.

He laid the foundation for diplomatic ties with a big neighbor that would soon become the world’s largest manufacturing and trading nation. China recognized the elder Marcos’ contribution. To this day, the only country that set up a consulate in Laoag, Marcos’ bailiwick, is China.

Amid the current turbulence in bilateral relations, there are attempts to revive the ideological rhetoric to frame the gap between the two sides. But ideology is not an issue. It never was when Manila established ties with Peking in 1975.

And China is still governed by the same political party whose leaders—Mao Zedong and Zhou Enlai—Marcos Sr shook hands with, although the ruling party has also transformed to meet the times.

The normalization of ties occurred as China embarked on game-changing market reform, turning it into the greatest economic miracle and catapulting it to become the world’s second-largest economy.

Since 2016, China has become the Philippines’ largest trade partner, major investor and infrastructure builder. Thus, seeing China from an ideological lens represents a bygone era that should be discarded.

Lost, if not marginalized, in the country’s current China policy is economics. Understandably, defense and military officials may be wired to view China from a certain angle. Regrettably, while this angle alone does not capture the totality of ties with China, it has become the privileged view, dominating the public narrative and heavily influencing policy.

Economic managers who understand the gains from Chinese trade, tourism, investment, infrastructure and technology are largely marginalized. This leads to an unbalanced appreciation of overall relations.

The cost of toxic ties and fixation with the intractable sea spat is palpable. From a historic high of 1.7 million in 2019, Chinese tourist arrivals to the Philippines dropped to just 300,000 last year. This is despite the rebound of Chinese outbound tourism, from which many of its ASEAN neighbors received a windfall.

Chinese tourists surged in Thailand (6.7 million), Vietnam (3.73 million), Malaysia (3.29 million) and Singapore (3.08 million). Obsessive advertisement of the sea disputes, stringent visa requirements and safety concerns dissuaded Chinese travelers from the Philippines.

In the agriculture space, from supplying 70% of China’s imported bananas in 2017, the Philippines’ top position was eroded and overtaken by others. Vietnam now supplies 50% of the China market. Unlike in 2012, China has not imposed curbs on Philippine fruit exports, but it increased intake from others.

While the debt trap or pledge trap tale captured an audience in the Philippines and made the government hesitant about pursuing major infrastructure works with China, railway projects were delivered in Vietnam, Laos and Indonesia.

The East Coast Rail Link in Malaysia is set to be completed next year and the Kunming-Haiphong high-speed railway was discussed during President Xi Jinping’s visit to Vietnam last April. In contrast, three railway projects negotiated during the previous Rodrigo Duterte government were scuttled with no concrete alternatives to date.

Chinese investors came despite political risks even before the Philippines made significant changes to its foreign investment regime.

The National Grid Corporation of the Philippines, where China’s State Grid has a 40% stake, completed the Luzon-Visayas-Mindanao single transmission network last year. China Telecoms made a 40% share in the country’s third telco player to break the duopoly and improve competition.

The China-backed Kaliwa Dam, which will enhance Metro Manila’s water security, is expected to be turned over by 2027. Chinese contractor EnergyChina was tapped to build what is being touted as the world’s largest solar farm set to rise in central Luzon.