Silk Road way to solve PH, Sino feud

QUANZHOU—The sea used to be near this city, the starting point of China’s ancient maritime Silk Road in the east.

Today, Quanzhou, where the 90-meter-high Jiuri Mountain is located, is being developed into the “pioneer” of China’s new maritime Silk Road, and Chinese officials make it clear that the Philippines is very much part of the new Chinese initiative that aims to boost trade, economic and cultural ties between the two countries and, it is hoped, strengthen political ties strained by the South China Sea dispute.

Jiuri Mountain, or “Hill Jiuri,” as stated in the marker standing at the foot of the mountain, was a witness to centuries of prayers of Chinese and foreign sailors and travelers for good winds and smooth sailing before they set sail for foreign lands.

Their prayers and wishes are forever etched in 75 inscriptions and engravings set around the hill.

During the Tang Dynasty, Quanzhou was the busiest port and venue for foreign trade, and during the succeeding Song and Yuan dynasties, the largest port in eastern China.

The inscriptions found on Jiuri Mountain say that Quanzhou was the starting point of the ancient trade route that linked the east with the west, which China is now reviving.

“Quanzhou at that time was like Shanghai and Hong Kong today,” according to Helen Chen, associate consultant of the Quanzhou Municipal Foreign Affairs and Overseas Chinese Affairs Office.

Chen said the modern Silk Road envisioned by China and other countries was intended “not only to promote trade but [also cultural and person-to-person exchanges] and even infrastructure [development].”

A Philippine delegation of journalists and academicians recently visited Fujian province to learn about the Silk Road project and understand how the Philippines could benefit from the Chinese initiative.

The Filipinos stayed for six-days, also visiting Xiamen, and learned from Chinese officials that China wants to strengthen economic and cultural ties with the Philippines through the Silk Road initiative.

 

Territorial dispute

The Chinese gave an assurance of cooperation despite the territorial dispute between China and the Philippines in the South China Sea.

Insisting it has “undisputed sovereignty” over almost the entire South China Sea, China seized seven Philippine-claimed reefs in the West Philippine Sea, part of the waterway within Manila’s 370-kilometer exclusive economic zone (EEZ) recognized under the United Nations Convention on the Law of the Sea.

Without military muscle to defend its territory, the Philippines took the dispute to the UN Permanent Court of Arbitration in The Hague for resolution.

China has refused to take part in the proceedings, insisting on bilateral negotiations to settle the dispute.

Chinese academicians see the Silk Road initiative as a way for the two countries to build confidence as they try to solve the dispute through diplomacy.

In a meeting with the Philippine delegation, professor Xu Ke of Xiamen University’s Research School of South East Asian Studies, called for confidence-building and cooperation between China and the Philippines, pointing out how the South China Sea dispute had strained ties by Manila’s move to take legal action against Beijing instead of negotiating with China.

Xu also said Manila was keen about promoting a code of conduct between China and the Association of Southeast Asian Nations (Asean).

Besides the Philippines, Asean members Malaysia, Vietnam and Brunei also have competing claims in the South China Sea.

Taiwan also claims the whole China Sea.

 

Bilateral talks

China has for some time now been espousing bilateral talks to resolve the dispute, Xu said.

“So first we have to build confidence between the two countries. If we don’t (build) confidence to deal with the issue, so how can we do this and how can we cooperate under this scheme?” he said.

But Xu also said the Silk Road initiative may help China and Asean countries get on politically well.

“The problem is China and Asean have quite close economic cooperation. But in terms of the political, the gap is wider and (we can) use this scheme (Silk Road) to narrow this gap,” he said.

Chinese President Xi Jinping proposed the revival of the Silk Road in 2013 with the goal of building more economic cooperation among countries in Asia, Europe and Africa.

In separate trips in Central and Southeast Asia in 2013, Xi spoke about the development of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, also called One Belt, One Road Initiative.

Oriented toward Asean

The 21st Century Maritime Silk Road is oriented toward Asean.

“In the 21st century, a new era marked by the theme of peace, development, cooperation and mutual benefit, it is all the more important for us to carry on the Silk Road Spirit in face of the weak recovery of the global economy, and complex international and regional situations,” China’s National Development and Reform Commission, Ministry of Foreign Affairs and Ministry of Commerce, said in a paper about the Silk Road.

“This initiative advocates tolerance among civilizations, respects the paths and modes of development chosen by different countries, and supports dialogues among different civilizations on the principles of seeking common ground while shelving differences and drawing on each other’s strengths, so that all countries can coexist in peace for common prosperity,” the paper said.

Jiang Xiding, a professor at Xiamen University’s Research School of Southeast Asian Studies, dispelled the notion that the Philippines is excluded from the Silk Road initiative because of the South China Sea dispute.

Asia bank

Jiang said the Chinese government was not excluding the Philippines from Silk Road, pointing out that the Philippines is a member of the Asian Infrastructure Investment Bank (AIIB) that will finance infrastructure projects under the initiative.

The Philippines was among 21 countries, including China, that signed on in October last year as founding members of the AIIB, which was seen as a rival to the World Bank.

Aside from the Philippines and China, the AIIB founding members are Bangladesh, Brunei, Cambodia, India, Kazakhstan, Kuwait, Laos, Malaysia, Mongolia, Burman (Myanmar), Nepal, Oman, Pakistan, Uzbekistan, Qatar, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam.

“So I think this is a good beginning for cooperation,” Xing said. “When the Philippines needs capital for construction or infrastructure, the AIIB will provide (but) certainly there will be some procedure. So I don’t think the Philippines would lose from the One Belt, One Road (initiative).”

Jiang said China set up a Silk Road Fund of $40 billion. The AIIB, he said, has a capital of $100 billion, expected to increase from its members’ contributions.

At meetings with local officials in Xiamen and Quanzhou, the Philippine delegation received assurance that the Philippines would be included in their Silk Road action plans.

 

39 projects

In Xiamen, local officials have mapped out 39 projecs for the participation of nine countries—the Philippines, Malaysia, Thailand, Vietnam, Singapore, Indonesia, India, Iran and Sri Lanka.

Of the 39 projects, nine were earmarked for the Philippines and these were made up mostly of infrastructure construction “to promote development and connectivity between the two nations,” according to Chen Jianjin, vice senior officer of the Xiamen Commerce Bureau.

In a briefing, Chen said among the projects was the construction of the Southeast China shipping center where a container port would also rise.

“We are also building the cruise home port. We are going to attract internationally famous ships to Xiamen to promote tourism,” Chen said.

Xiamen was also boosting mutual investment with the Philippines and Chen said Chinese-Filipino business tycoon Henry Sy’s SM Group would build the third phase of its shopping mall there.

“Our Xiamen bus company is also promoting an assembly plant in the Philippines,” he said.

In boosting tourism ties under the Silk Road initiative, Chen said Xiamen was working on a “popular cruise route” that would see the inclusion of some countries, including the Philippines.

“In the future, we plan to give greater support in importing goods from the Philippines and other Asean countries, and to get more subsidy for these programs,” he said.

 

More PH investment

Chen also expressed hope that Philippine enterprises will invest more in Xiamen, noting that many Chinese-Filipinos come from Xiamen.

Aside from Sy’s SM Group, John Gokongwei’s Robinson’s Group has also a shopping mall in Xiamen.

There are 199 Philippine enterprises in Xiamen, mostly medium and small-sized businesses, with a total capital of $280 million, Chen said.

The Philippines is Xiamen’s 10th largest investor, concentrating on manufacturing and services. Manila is the second largest trader among Asean members in Xiamen, Chen said.

He said, however, that Xiamen’s investment in the Philippines is smaller, with only four enterprises with $3.16 million in investments, mostly in mining.

In the case of the export-oriented economy of Quanzhou, the Philippines is its third largest source of foreign direct investments, with Hong Kong and Taiwan on the first and second spots, respectively, according to Chen Jin Zhen, section chief of the Quanzhou Municipal Bureau of Commerce.

The export volume between the Philippines and Xiamen is $1 billion, while their import volume is $60 million, she said.

 

PAL flights

“We can do more business together. It’s beneficial not only to Chinese businessmen but also to Filipino businessmen,” she said.

The opportunity to do more business and people-to people exchanges as well as tourism between Quanzhou and the Philippines is expected to increase with Philippine Airlines opening direct flights between Manila and Jinjiang, a Quanzhou county, according to Helen Chen, associate consultant of the Quanzhou Municipal Foreign Affairs and Overseas Chinese Affairs Office.

Chen also said Quanzhou had drawn similar action plans involving 180 projects under the Silk Road initiative where the Philippines would benefit.

She said the action plans were being reviewed at the provincial level and would be brought eventually for the approval at the national level.

“The Philippines is one of the most important countries in Asia and we’re sure there will be some projects related to the Philippines in Quanzhou. The Philippines is an investor, so we have projects,” she said.

Under the Silk Road initiative, she said, local governments in China will encourage businessmen “to go abroad and set up industrial parks” and in the case of Quanzhou, shoe companies as they have a bigger international market.

Long-standing cooperation

Chen of the Quanzhou commerce bureau said long before the Silk Road initiative, Quanzhou and the Philippines were already doing well in economic and trade cooperation.

That is why when Beijing introduced the modern Silk Road initiative, Chen said, Quanzhou “seized” the opportunity for it to become the “pioneer” of the project.

The SM Group made its first investment in China in 2001, opening a large shopping mall.

It is opening soon a third shopping mall in Xiamen, SM Xiamen III, which will be “more upscale” than SM Xiamen II or the Lifestyle Center, according to Ronald Allan Brosas, SM Supermalls assistant vice president who is based in China.

Brosas said SM Group hoped to open soon a third shopping mall that was linked with SM City Xiamen and SM Lifestyle Center.

“We need to be aggressive of the competition,” he said, noting that the business competition has become stiffer because Xiamen is “close to Hong Kong.”

Brosas said the recent opening of a subway is Xiamen allowed residents to visit Hong Kong in four hours, prompting the SM Group to strive to get more international brands to its shopping malls.

“We want to compete. We want to build a city within a city,” Brosas said, adding that the group was working with the city.

 

Five SM malls

SM Xiamen is among five SM shopping malls operating in China. The others are located in Jinjiang, Quanzhou; Chenghua, Chengdu; Wuzhong, Suzhou and Yubei, Chongqing. It is set to open more SM malls, among them in Zichuan, Zibo City and in Tianjin.

And SM has big investment plans for China, with officials saying they will enter in more real estate business there, building residences, condominiums and offices.

“SM’s future plan in China is focused on the core targets of provincial capitals and cities as well as the second-tier cities to develop SM shopping centers while actively expanding the brand name of SM and increasing the recognition of SM nationwide,” the group says in its “Live with Style” brochure.

Chen of the Xiamen commerce bureau said he hoped that under the Silk Road initiative, “more Philippine enterprises would invest in Xiamen.”

“Xiamen is coastal and the Philippines is an [archipelago]. So we have a lot of cooperation potential,” Chen said.

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