PH seen benefiting from factory relocation and China investments

Chinese Ambassador to the Philippines Zhao Jianhua said the Philippines will benefit from the relocation of labor-intensive investors in China aside from more direct Chinese investments in energy, infrastructure and manufacturing as the world’s second largest economy undergoes economic restructuring focusing on higher-end industrialization for sustainable development.

Chinese Ambassador Zhao Jianhua (left) is welcomed by Philippine Chamber of Commerce and Industry President Alfredo Yao at the dinner hosted by PCCI in his honor on July 1, 2014 held at PCCI Office in McKinley Town Center, Fort Bonifacio, Taguig City.

The new ambassador of the People Republic of China revealed this during a welcome event hosted by the Philippine Chamber of Commerce and Industry where he outlined the Chinese government’s economic growth direction and the country’s economic relations with the Philippines despite the heated territorial dispute between the two countries.

“China’s investment in the Philippines has not been as satisfactory as we have hoped. So we hope that we can invest more particularly in the following major areas: infrastructure projects, energy and manufacturing,” he said noting that the country’s high power rate is not good for Philippine economy. The ambassador also said that China would like to explore the possibility of continuing its investments in infrastructure projects in the country.

In the manufacturing sector, Jianhua said that China is now undergoing an economic structural reforms that will force some of its  labor intensive industries to shift out of China to neighboring countries as well as to African and central Asian countries.

“There is a good opportunity for the Philippines to receive some good quality manufacturing investments, say food processing, manufacturing of minerals, these are the other things that we can do in the near future,” he said noting that China has not been investing enough in the Philippines as much as the Philippines did for China.

In terms of trade, he said that China is now the Philippines number three trading partner but if the data will include Hong Kong, Macau and even Taiwan, China is already the country’s top trading partner.

On tourism, he said that the number of Chinese tourists to the Philippines still continued to come reaching 426,000 in 2013 or 70 percent higher than 2012. Jianhua, however, said that the Philippines got a small share of Chinese tourists than its neighbors in ASEAN. Malaysia has received 4 million tourists in a year while Thailand has 3 million annually. This means, he said the Philippines has more room to host one or two million Chinese tourists.

“We’re glad that despite the issues we are facing, the Chinese tourists are still attracted to the beautiful scenery and warm people here so last year. In the first two months of this year, there were about 90,000 Chinese tourists who have come to the Philippines,” he added.

With more room for better economic relations, the Chinese ambassador urged for both countries to concentrate on the positive.

“We’re not only close neighbors, we’re not only partners but we are relatives. I think it is imperative and essential for the two countries to focus on things that can unite us, to focus on things that can promote prosperity of both countries that can contribute to the improvement of the livelihood of the two peoples,” he said.

China has actually intentionally slowed down its growth rate from over 10 percent GDP growth rates in the past years to 7.7 percent last year because the Chinese government wants quality and sustainable economic development. With managed investments, they target to create quality jobs of 9 million a year for its 5 million to 7 million annual graduates.

“We’re tired of being a world factory because although we are making a lot of products and exporting to all parts of the world, we are suffering from shortage of energy, environmental problems so that’s why the Chinese government is launching a campaign to restructure our economy so that we can change from made in China to invented in China,” he added.

This strategy has proven to be successful. Despite a slower 7.7 percent GDP growth last year, the economy actually created 13.1 million jobs. China, the world’s most populous country, has now a total of 1.3 billion people.

“The quality of economic development is more important. What are the criteria to better the quality of China’s economic development is employment,” he said.

The GDP per capita in China now stands at $6,800 while maintaining a staggering $3.82 trillion in foreign reserves in 2013.

Last year,  China’s outbound direct investments already reached $90.2 billion while it received more inbound direct foreign investments of $117.6 billion. It also approved 22,773 new foreign enterprises in 2013 alone.

The Chinese government, however, is still trying to narrow the gap between the poor and the rich in China which has 200 million people still living below poverty line.

The urban resident disposable income growth is nearly four times higher than the rural residents’ income, a huge challenge for the Chinese government.

The long-term target is to double the current GDP per capita to $12,000 by 2020 in creating a moderately prosperous society in all aspects.

The ambassador also revealed plans for ASEAN, including the establishment of Asia infrastructure Investment Bank.

“I think it can be agreed upon by Asian countries earliest by the end of this year to set up a special bank that will primarily focus on investment on infrastructure projects in Asian countries,” he said.

In the coming eight years, he said, China will input around $3 trillion of goods from ASEAN countries and China’s overseas direct investments to the region are expected to reach over $100 billion

“We’ll continue to build more overseas economic and trade cooperation zone. Our goal: Regional inclusive growth,” he said.

Source: http://www.mb.com.ph/ph-seen-benefiting-from-factory-relocation-and-china-investments/