Why Be Afraid of China

Seeds of Change

Many are scared of the influx to the country of Chinese, their investments and warm bodies. They are afraid that later on we might be strangers in our own country. While this fear could be valid, I think this matter should be addressed and managed properly.

There is no denying that the records of China’s investments in other countries-Sri Lanka, Maldives and African countries such as Nigeria, Kenya, Angola and Ethiopia, etc. seem not savory. But our country really needs foreign investments which only China can readily provide. The western countries, America included, for many decades have not done enough to provide investments that can provide jobs and prosperity to the Filipino people. I am not a big fan of China, much less a beneficiary of its presence here, but come to think of it, this is a huge opportunity for the country to let go of. It could be boon or bane, but, if managed properly it could be boon.

It is a common knowledge that the country offers a lot of opportunities to investors: its big population as consumers and workers, inadequate infrastructures such as roads, bridges, airports, rail ways, housing, etc., which are now the center piece projects of the present administration. It is, indeed, a promising economy. All it needs is an upfront money to pump prime it. Once it’s up and running and has attained a critical mass or a level of economic activities enough to create a bandwagon of investors then many other fence sitting countries will follow suit and ride that bandwagon. And of course, we have to create an atmosphere that there’s money to be made in the Philippines to attract them.

Back to China who can provide the pump prime money. To put this into perspective, you need a good volume of water to start the artesian well to start spewing water. That’s how the term pump prime came about. Same with the economy. There is no denying we need the money from China, at this time when other countries are playing safe (sigurista) when it comes to investing in the Philippines.

My take is set the rules on investments, amend the provisions in the Constitution on foreign investments. The provisions must be liberal enough to attract foreigners to come in. When Deng Xiao Ping in 1978 opened China to foreign investments, he opened his country to foreign investors without fear, even allowing ownership of properties, but with some limits. He reasoned out that foreigners cannot bring to their countries the properties they own or lease in China. When the term of lease expires the investor will leave behind well developed properties to the advantage of China. Not only the investments created jobs and boosted consumptions, it also created foreign exchange from the products manufactured and exported by these companies where the foreign capital went to. (As of 2018, China’s foreign exchange reserve stands at 3 trillion dollars vs US’s at about 150 billion dollars, though the former’s gold reserve is only 22% of the latter. Both countries have the most number of billionaires, with US’s at 705 and China’s at 285).

In order to attract more foreign investments, the country does not just liberalize property ownership, but it has to create an image that it’s a safe and promising investment haven. Stable policies and rules of investments that do not change every time there is change in the political leaderships shall be guaranteed the foreign investors. Dubai, a financial and air traffic hub, is an amazing example. It has no natural fresh water, few oil deposits, arid and hot weather. But its economy is very progressive and dynamic. Though they require foreign investors to partner with locals (that’s the rule outside free zones), yet, companies choose to stay and then, thrive there (there are now outlets of Jollibee and Pancake House there). This is because their investments are secured as policies are stable.

The Philippines with its human and natural resources offer a lot of economic potentials. If we can only manage effectively China’s investments, this will surely start the golden age of the Philippine economy. There’s no doubt we, Filipinos can. So why be afraid of China?