you can comment if you wish

Whether in business or in gov't policy, a lot of the time, major deals are closed based on personal relationships and trust. It's not uncommon, for example, for businessmen to restructure loans whose payments they are falling back on, by inviting senior bankers to have dinner with their families. Or for senior executives to close the purchase of a company by going on Alaskan fishing trips with each other's families.

So at least on the surface, I don't see anything wrong with GMA bringing the first family to China and probably mingling with the family of Hu Jintao - as long as she brings home the Ma Ling. I understand there are some major items on the table such as the North Rail loan and other investments.

I agree that personal realtionships can indeed build up trust, and an encounter between the families of both state leaders may indeed help build up this trust. And considering the outcome of the Angelo dela Cruz incident, it is obvious that we really need to give other states the impression that we can be trusted to keep our end of the bargain.

But like that incident, there is always the sentiments of the Filipino people to consider. And in my opinion, with regards to the Angelo dela Cruz issue, that was what the Arroyo government prioritized. But now, in her state visit to China, she is once again singing a different tune, somewhat ignoring the possibility that many Filipinos would get offended by her spending on a trip, when she is calling for a tightening of belts. So it's not surprising that she's being criticized for bringing her entire household there as if they were on vacation.

But if she does bring home the Ma Ling, then I suppose all these criticisms would cease, and she might even get praises from the very same people.

Looks like GMA brought home some Ma Ling after all. 2 of the 5 agreements will have significant economic impact in the long term.

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New accords boost RP-China ties

BEIJING (via PLDT) – Philippine-China relations have hit a new high with the signing here of five government agreements between China and the Philippines and several other accords between corporations from the two countries.

President Gloria Macapagal-Arroyo and President Hu Jintao witnessed the signing by their respective officials of five landmark agreements on visa waiver for their officials and diplomatic personnel, a joint seismic survey in the South China Sea, development of fishery facilities in Palawan, energy development, and the initial phase of the Northrail project linking Metro Manila and the Clark Special Economic Zone in Pampanga.

Malacañang Communications Director Silvestre Afable said the enhanced RP-China cooperation in various fields is expected intensify in the next few years.

On trade volume, Afable said President Gloria Macapagal-Arroyo and President Hu have agreed to increase their total trade to $20 billion in the next five years.

Significant gains in cooperation are also expected in agriculture, tourism and even defense, Afable said.

On defense and security, Afable said initial discussions have already been made on the possibility of military exchange visits, training and intelligence information exchange, particularly in relation to addressing the drug problem.

China and the Philippines established diplomatic relations on June 9, 1975.

The two countries will mark the 30th anniversary of their relations next year.

Arroyo in 7th heaven, thanks China
Updated 11:53pm (Mla time) Sept 03, 2004
By TJ Burgonio
Inquirer News Service


She was in seventh heaven. This was how President Gloria Macapagal-Arroyo described her feelings yesterday as she prepared to fly back to Manila from a three-day state visit to China, bringing with her a harvest of nearly $1 billion worth of investments and soft loans, mostly in the trade, energy and agri-fisheries sectors.

She was expected to arrive in Manila late last night.

Hours before departure, Ms Arroyo witnessed the signing of five major trade agreements between Filipino and Chinese business executives at the Kerry Centre Hotel here.

These included an agreement between China's Shenzhen Zhaoheng Industrial Co. Ltd. and the Philippines' Konka-Fulin Mining & Development Corp. to undertake the construction of a $30-million iron ore processing plant in Camarines Norte.

The ore plant, which can produce 3 million metric tons of iron ore per year, is expected to provide 3,000 jobs and revive the old iron mines in the province.

At the signing ceremonies, the Hebei Medical University-Bio Medical Engineering Center also committed to provide a $25-million credit facility to the Philippine International Trading Corp. for the purchase of medicine.

"I thank China for its support to my 10-point legacy. I can feel that the Philippines is very important to China,'' an exuberant Ms Arroyo told the Filipino community at the Kerry Centre Hotel on the eve of her departure.

$20 billion trade

Ms Arroyo said one of her goals was to expand trade with China to $20 billion in the next five years. There is also need to establish more economic zones as the Philippines transits into a federal-parliamentary system, she said.

Speaking to the Filipino community, Ms Arroyo said a Chinese company, Premiumware, had committed to finance the development of a fish processing facility on Palawan.

"[I'm] in seventh heaven because we just got a commitment from Premiumware that they will spend about $33 million for fish processing facilities in Palawan,'' she said.

The other agreements involved a contract between Multi-media Telephony Inc. and Huawei Technologies Co. Ltd for the supply of $100 million worth of mobile high-speed data services, and a contract for the purchase of 100 China-made buses running on compressed natural gas, worth $8 million.

The fifth was a technical cooperation agreement for the trial planting of Chinese hybrid corn seeds and the installation of a corn research station in the Philippines, all amounting to $100 million.

Major breakthroughs

"All of these are part of fulfilling her 10-point agenda for the next six years,'' Energy Secretary Vincent Perez told reporters. "It's an extremely successful trip with some major breakthroughs in the diplomatic front.''

Sergio Ortiz-Luis Jr., chair of the Philippine Chamber of Commerce and Industry, who was part of the 105-member delegation, described the visit as very successful.

"The value of the contracts was substantial, plus the other agreements that are brewing, which were not signed,'' he said in an interview.

China's Hebei Jingniu Group Co. Ltd also committed to invest some $312 million for the construction of an integrated glass manufacturing facility at the Bataan Technology Park in Bataan, officials said.

The plant is expected to provide 15,000 jobs once it becomes operational late next year.

Decongesting Manila

The Philippine National Oil Corp. also hammered out an agreement with the Harbin Power to construct a $50-million coal power plant, according to Perez.

Earlier, China pledged to infuse some $400 million for the construction of phase 1 of the North Railway project, which runs from Caloocan through Malolos, Bulacan to Clark, Pampanga.

"The Northrail project will help ease the decongestion of Metro Manila, and develop Clark-Subic as logistics hub,'' Perez said.

All the investments and loans amount to $992 million, officials said.

Other contracts that were proposed for signing.

These involved the the supply of 70 containers of coco coir, geo-textile, coco log and coco mat worth $1 million to China, the supply of 4,800 metric tons of coconut-based alkyd resin ($5.16 million), and the supply of 3,600 metric tons of coco fiber ($720,000).

When asked how soon the agreements would be implemented, Perez said: "I anticipate that there will be intensified efforts in the next 12 months to bring into fruition all the investment needs that were created today.''

"I anticipate several delegations from both sides visiting Beijing and Manila over the coming months,'' he added.

I initially voted that I strongly disagree with GMA taking her family to China because (1) I hastily assumed their expenses were shouldered by the taxpayers; and (2) I see no reason why they should go, especially in light of the fiscal crisis. However, I read last night on inq7.net that they paid their way. I do have doubts that one can fully separate the first family's expenses from those of the official delegation. But my stand now is as long as they foot the bill for their trip, I am indifferent between them coming along and not.

The problem with this administration is that it cannot be trusted that what comes out of the mouths of their spokespeople (aka apologists) is the truth, the whole truth and nothing but the truth. Already there are numerous conflicting reports. One is that the families paid their own way and the other is that the Chinese government paid for their visit. So upfront, there is already a hint of deception or double talk as regards the true nature of the funding of the trip of the families and their yayas. Point number two is that the government has a penache for saying one thing and practicing the complete opposite. Even if the trip was self funded (which is highly dubious), doesn't this bring a bitter taste in the mouth of a people told to tighten their belts even further because of an impending fiscal crisis?

Whatever the gains, it seems highly unethical that the head of state of a country in our alleged fiscal situation engage her family in what is perceived to be (and is highly probably) a junket. Then again, this administration is not entirely famous for its scruples.

Interesting read on a possible new policy shift. I just hope our gov't officials keep in mind that there's no such thing as a free lunch, and just like with our relations with the US, China will be expecting us to reciprocate.

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Is China replacing America?
DEMAND AND SUPPLY By Boo Chanco
The Philippine Star 09/10/2004

It is bound to happen... maybe in 10, 20 years or even less. Economists and political scientists have been saying that China may be the next superpower, eclipsing America. This is China’s century, they say. The sleeping dragon has awakened! All 1.2 billion of China’s teeming masses are on their way to establish the world’s largest market economy and newest political superpower.

Listening to President Arroyo from the back of Dolce Fontana restaurant during last Tuesday’s MOPC Forum, I got the impression that our economist President got the idea too. And she is working to adjust our national perspective to take in the vision of China as the regional and world superpower that will eventually have more impact on our country than America.

Of course President Arroyo was careful to say that we have strong historic ties with America. But in responding to a question posed by a reporter from the Office of the Press Secretary, she also acknowledged the fact that our historic ties with China are even deeper... predating the arrival of the white man on our shores.

President Arroyo spoke glowingly of the over $1 billion in aid, concessional loans and contracts she brought home from Beijing. It was not lost on the audience in that packed hall last Tuesday, what was left unsaid in contrast: the meager $30 million in anti-terrorism assistance that was supposed to come from America have suffered all sorts of bureaucratic snags.

It was also not lost on the audience the policy contortions the Arroyo administration had to go through for military aid and trade concessions from America which often don’t materialize. To emphasize how important China is to her mind, President Arroyo said her state visit there last week is the only state visit she will make this year.

What really jolted me during that forum was President Arroyo’s announcement that we are on the verge of military cooperation with China. She is sending no less than newly installed Defense Secretary Nonong Cruz to China to work on the finer details of how this cooperation will work. "We recognize that China plays a determining influence in the security and economy of our region and therefore of our country," the President said.

Will the Chinese sell sophisticated firearms to help modernize the AFP? Will we be sharing sensitive intelligence information with China? Will we undertake joint patrols in the South China Sea to keep it free of pirates? The possibilities are mind boggling. The President’s subliminal message seems to be, America’s no longer the only game in town even for something as sensitive as military cooperation.

Not only will China now have a new market for its armaments, America’s hold on our military could be seriously challenged. Will the Chinese military send experts in guerilla warfare here to train our soldiers? And even as the Americans took away our cadet allocations at West Point and Annapolis to express disgust following the termination of the bases agreement, will this new cooperation with China mean top PMA cadets will be invited to train in China’s military academy?

The more important thing is, China’s being friendly not just to us but to all of ASEAN. When asked why she thought China’s being so generous to us, President Arroyo said China’s just being a good citizen of the world. Really? Maybe, we can give China the benefit of the doubt. But let us not forget China’s also acting in its best interest, which will not always coincide with ours.

At the rate China is undertaking this charm offensive, ASEAN could end up being a solid pro China bloc that would change the balance of power in our region. And all this is happening while America is distracted with Iraq, as the Bush administration placed Asia in the back burner. But I am afraid we will just replace America with China. The dependency relationship with a superpower remains.

The other more important aspect of that relationship we must develop to make the economic basis of our nationhood more viable, has to do with trade. I was disappointed that President Arroyo hardly touched on trade with China in her discourse on our emerging foreign policy shift.

I was hoping to hear her unveil a specific program designed to take advantage of China’s voracious appetite for commodities from bananas to vegetable oil. She herself noted that "ever since Beijing joined the World Trade Organization, Manila’s bilateral trade with China has gone from almost nothing to $10 billion, with the balance of trade in our favor."

I got word late Tuesday that the Philippines is finally part of the so-called early harvest program under the ASEAN plus China. That means, we will no longer have the 10-percent tariff disadvantage against Malaysia and Indonesia when we sell such commodities as coconut oil to China.

I remember a conversation I had with former Agriculture Secretary Cito Lorenzo about his plans to put up palm oil plantations in Mindanao that in as little as five years, would be able to supply palm oil for export to China. Right now, palm oil is one of the major exports of Malaysia to China and I was told China could absorb more.

If there is anyone who knows China and the commodities trade, it is Cito. His family-owned Lapanday (he divested before he took the agri job) is selling fruits like bananas and pineapple to China for close to 10 years now. Lapanday’s sale to China had gone from zero to half of total. And it will go higher as China’s appetite increases. Even rice is a potential export commodity to China, if we can untangle our rice growing problems.

As I proposed some months ago, the China market is important enough for the President to appoint a special envoy to China with a mandate to develop Philippine exports of commodities and manufactured goods. We need someone who will work not just for the industrial sector but for the agri sector as well. I think this is a job tailor made for Cito.

All I am saying is, the President is right to recognize the importance of China this early. With China’s exploding economy that seems unstoppable, we simply must find a way to hitch our kareton to the Chinese star and share some of the bounty from our powerful neighbor up north, through trade and not aid.

How the world has changed. Even as America still nominally holds the title of sole world superpower, China holds America by its financial balls... I mean bonds. If China stops buying American bonds or dumps what it holds, America’s kaput. By 2020 or even earlier, China may no longer be happy playing second fiddle. By that time, the sheer power of its market will make China the dominant superpower. The earlier we learn to live with it, the better for us.