By Joel D Adriano
MANILA – A rising tide of Sinophobia in the Philippines threatens to accelerate deteriorating relations and jeopardize growing trade and investment ties with China. A two-month long diplomatic spat over contested territories in the South China Sea has animated the wave of anti-Chinese sentiment, including calls for a boycott of Chinese-made products.
On Monday, Philippine Foreign Secretary Albert del Rosario announced plans to take the dispute with China to a United Nations tribunal. This came after Manila banned a senior Chinese diplomat from local meetings for alleged rude behavior during bilateral discussions last month. President Benigno Aquino indirectly referred to the incident, telling a press briefing that Filipinos should not allow themselves to be “bullied” by bigger nations.
That appeal to nationalism has added to a rising clamor to boycott Chinese-made goods, which is gaining popular traction, judging by surveys and postings to the Internet. In a Philippines online poll conducted by Yahoo!, over 70% of 31,000 respondents supported calls to boycott all Chinese-made products. In a similar TV news poll, the percentage of respondents in favor of a boycott was even higher. Popular Catholic bishops have also publicly endorsed an anti-China boycott.
Calls for the boycott were first galvanized by Albay Governor Joey Salceda, an outspoken political ally of the Aquino administration who has criticized China’s perceived aggressiveness over territories in the potentially oil and gas rich Spratly Islands. Salceda has argued that a boycott would hurt China – which last year maintained a US$1 billion bilateral trade surplus – more than the Philippines. He has said that China has made no investments in the Philippines since 2008, a claim disputed by trade groups.
The Aquino administration has played down the calls for a boycott, stressing that the disputes over the Spratly Islands should not undermine overall relations. In a press briefing, the government urged the public to temper its response to perceived provocations, including threats made by a Chinese patrol vessel to a Philippine oil exploration ship in March.
Philippine officials say they have recorded seven run-ins with Chinese vessels so far this year. A retaliatory trade war, however, would have a wide-reaching impact on the Philippines – and potentially the wider Southeast Asia region. Edgardo Lacson, honorary chairman of the Philippine Chamber of Commerce and Industry (PCCI), said that a boycott of Chinese-made goods would spark inflation throughout the Philippine economy.
He said the Philippines is heavily dependent on cheap Chinese goods, ranging from wares sold in luxury shopping malls to agricultural products peddled in traditional markets. China is currently the Philippines largest trading partner; the Philippines recorded in May its first annual decline in exports in over two years. A potential retaliatory ban from China would put $6 billion worth of Philippine exports at risk. There are currently an estimated 8,000 overseas Filipino workers in mainland China, a small number compared with the millions deployed across the Middle East.
Current PCCI head Francis Chua has urged the Aquino administration to let the private sector take the lead in solving the Spratlys conflict. Chua, a former trade envoy to China, has suggested that the Filipino-Chinese community could play a key role in mending fences, leveraging into their shared common language, culture and business interests with China.
In a bid to cool passions, presidential spokesperson Edwin Lacierda has noted that many Filipinos, including Aquino, have Chinese roots. The late president Corazon Aquino made a trip in April 1988 to a village named Hongjian to trace her ancestral roots. There Aquino declared that she is “not only the president of the Philippines” but “I’m also the daughter of Hongjian”.
With that in mind, Chua has proposed an economic solution to the issue, including the establishment of a mechanism for joint development of the Spratlys. Philippine political commentators, however, have argued such an arrangement would imply that Manila recognized Beijing’s sovereignty over the contested maritime areas and that China would likely in time leverage its comparative military strength to dominate any such arrangement.
That view is consistent with past official Philippine complaints about a perceived mismatch between China’s words and actions. During the Joseph Estrada administration, former defense secretary Orlando Mercado accused China of implementing a “talk and take” policy where it seized territory in the South China Sea while avoiding actual conflict. A decade later, after making massive investments across Southeast Asia, China is no longer shying from conflict.
Walden Bello, an Akbayan party-list congressman, also believes that a boycott would cause more problems than it would solve. He says that Chinese-Filipinos taipans should be kept out of the debate so as “not to put them in a terrible position of having to choose between their country [the Philippines] and their host country [China]”. Chinese-Filipinos have in recent years made major investments in China’s industrial Guangdong province.
While politicians like Bello favor a multilateral solution to the conflict, China has emphasized bilateral tracks where it can leverage its comparative size and power to its advantage. Yet much of the goodwill China accrued through an emphasis on economic diplomacy with Association of Southeast Asian Nations (ASEAN), including a recently inked free trade agreement, has come into question with its assertiveness in the South China Sea.
“Through its rapidly growing economic links and adroit diplomacy, Beijing had ameliorated the perception in Southeast Asia that China is a regional security threat,” said Renato Cruz de Castro, an associate professor of international studies and US foreign policy at the De La Salle University in Manila. “The soft power approach actually fits well with the preferred way of doing business” in most ASEAN countries, he said.
With rising Sinophobia and calls for an anti-China boycott, the Philippines has openly spurned China’s earlier soft power, trade and investment-oriented advances. Whether those sentiments materialize into concrete anti-China policies and actions is unclear. But the popular response shows that rising tensions in the South China Sea now also threaten ASEAN-China trade and economic integration.
Joel D Adriano is an independent consultant and award-winning freelance journalist. He was a sub-editor for the business section of The Manila Times and writes for ASEAN BizTimes, Safe Democracy and People’s Tonight.
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