Targets for China visit bared

The Philippines’ successful economic reforms have made several of its industries attractive to Chinese investors, but persistent politicking could dampen interest. Trade Secretary Peter B. Favila told reporters in Malacañan Palace Tuesday that signing of various memoranda of agreement and of understanding with potential Chinese investors tops the agenda of President Gloria Macapagal Arroyo’s five-day, five-city tour of China beginning this Friday. Highlighting her trip will be the Association of Southeast Asian Nations Commemorative Summit in Nanning, China from October 30 to 31. University of Asia and the Pacific economist Victor A. Abola said in a separate interview Tuesday that mining, infrastructure, power, housing and logistics are areas where Chinese investors are most interested, areas also identified by Mrs. Arroyo. MORE WANTED China is now the biggest market for electronics, the country’s top export product, accounting for 26% of the $17-million export receipts from January to July. Talking to Chinese reporters last week, Mrs. Arroyo said that while she was pleased with the trade numbers, she hopes China could increase its investments in the country. "There is much interest," remarked Sec. Favila. "Many are interested to have [a preliminary agreement] signed there." Mr. Favila said he is already in talks with a major Chinese housing developer which, if the deal pushes through, will build at least a million units for low-cost and socialized housing projects. But while the government should aggressively solicit more investments, it should make sure its internal affairs are in order. "I don’t think the problem is in the administration that wants to do things. I think the problem is in the opposition that keeps on putting all sorts of objections and teaming up with whoever it is just as long as they can discredit [Mrs. Arroyo]," opined Mr. Abola, stressing that "political abstractionism [sic] without the common good in mind" has to stop. He cited the China-funded $530-million North Rail Project which could not take off for the longest time. "That was given on a concessionary loan basis and they have achieved what has been unachievable for ages, which is getting rid of the squatters from the rail-road," he explained. He said the ruckus raised by some politicians over the project "is absurd" because if authorities had already signed a deal, this should be honored. FIELDS Mrs. Arroyo said they are also negotiating for Chinese funding for the South Rail project. Mining, an area where the Philippines can supply Chinese requirements, is also a thorny issue, said Mr. Abola. Housing, on the other hand, is more straightforward and could be accomplished with relative ease. The Philippines could also use Chinese expertise in infrastructure building, Mr. Abola added. Mr. Favila mentioned that Mrs. Arroyo aims to promote Subic Freeport and Clark Special Economic Zone as regional hubs. Mr. Abola agreed these two premier economic zones could serve as transshipment hubs for neighbors like Indonesia, Australia and New Zealand. The Trade chief added that they are looking into equity-loan schemes for investment deals, as the government wants to minimize borrowing. "Of course, that’s preferable [to investors] because they [government] take part in the risk in the project," Mr. Abola said. All of these are possible, Mr. Abola said, because the government has managed to earn "brownie points" with the international community for "putting the fiscal house in order." DAVAO DELEGATION A delegation from Davao City, led by Mayor Rodrigo Duterte, will join the trade exposition in Nanning, China where a sister agreement may be forged between the two areas. Ivan Cortez, Davao City Investment and Promotion Center economist, said the visit, which willrun on the last week of this month until the first week of November, will be Mr. Duterte’s return visit to that Chinese city after Nanning’s mayor visited Davao City in April. Mr. Cortez said the delegation is expected to promote not only Davao’s, but Mindanao’s trade and tourism sectors during the trip. In his visit to the city last July, Chinese Ambassador Li Jinjun said he will try to entice investors and tourists from his country to explore the possibility of Davao City as tourism and investment haven. In his courtesy call to the office of Vice-Mayor Luis Bonguyan during his visit, Mr. Li claimed some Chinese investors wanted to invest in Mindanao but the perception that the island was not safe affected their plan. The Chinese ambassador added that some Chinese investors were already looking at investing in an industrial park in the city and that Chinese airlines were studying the possibility of setting up direct flights to Davao City. — Josefa Therese L. Cagoco and C. Q. Francisco/BusinessWorld