OBOR: China can’t be ignored

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President Duterte is making a historic visit to China. The Philippines will also be represented by a large number of local businesspeople from virtually all sectors of our economy.

As the trip begins, critics have lashed out at this move as they prefer closer relationships with other countries, as the Philippines expands its foreign and economic relations beyond the United States and Europe.

The sentiments and fears of reducing dependency on Washington and increasing partnerships with nontraditional allies have been labeled as a “pivot to China”. Ordinary Filipinos are also suspicious about a closer relationship with China, particularly in regard to potentially weakening our claims in the West Philippine Sea.

The President himself has said he will not insist on touching the Panatag Shoal issue during this trip. The main focus of President Duterte’s visit will be in areas of trade and investments. The Philippine government is hoping to seize the opportunity to score business deals and funding, especially in the areas of infrastructure and energy.

Since the Philippines is in dire need of modern and efficient infrastructure, building closer ties with China may be the most sensible thing to do. China has made serious and vast commitments to investment in public infrastructure, both at home and overseas.
While the United States is still considered as a “superpower,” China has spent more for infrastructure than the US and Western Europe combined. Reports said China is looking to spend $724 billion in the next three years. China’s boldest move in public infrastructure in the global arena is the “One Belt, One Road” (OBOR) initiative. China is connecting major countries along the ancient Silk Road route across Europe and Asia with modern railways, highways and ports.

The ancient Silk Road was an important land route established 2,500 years ago that facilitated trade between the Roman Empire and East Asian empires until the 15th century. Its modern incarnation will provide a faster and cheaper way to move goods. Already, taking the full sea and land routes of OBOR, some $3 trillion of China trade since June 2013 has flowed over the route, more than a quarter of China’s total trade volume.

Currently, goods between Europe and Asia are moved through the so-called Eurasia Land Bridge, which traverses through the current Russian Trans-Siberian Railway. While three weeks faster than maritime shipping, it is also 25-percent more expensive.

Once completed, travel will be via high-speed rail between Xi’an, China and Germany with other side routes. Power plants, electricity-transmission facilities and oil-and-gas pipelines, covering 19 countries along the “Belt and Road” in 40 energy projects have begun. To date, China has also invested more than $51 billion in the countries along the OBOR route through the “Silk Road Fund” and the Asian Infrastructure Investment Bank. As of this writing, China has signed memoranda of understanding with 56 countries and regional organizations regarding OBOR.

While the Philippines cannot be a direct part, our goods might someday flow to the rest of Asia and Europe using OBOR. Like it our not, China cannot be ignored. To be short-sighted and narrow minded about the “Red Dragon” will be a mistake.

Image Credits: Jimbo Albano

Source: Business Mirror

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