Globalization is at its peak, and mega-projects in collaboration with
many countries despite geographical barriers are underway. With this in
mind, a delegation of social scientists from the Ateneo de Manila
University in the Philippines visited China to understand the Belt and
Road Initiative. Coming from the recent BRI summit held on May 15 and 16
in Beijing and attended by President Rodrigo Duterte, this trip was
expected to deliver academics a deeper perspective of how the
Philippines stands to benefit. The delegation also took an opportunity
to listen and exchange views with academics from the Sun Yat-Sen
University on the BRI.
The prime goal of China in pursuing BRI
is to improve ties and stimulate growth and development along its
geographic domain. It will link Asia to Europe and Africa by tracing the
historical Silk Road and providing a maritime counterpart. This
initiative will shelter about 60 developing economies with representing
almost 4 billion people, 65 percent of land trade and 30 percent of
water trade with a total value of $21 trillion. Early gainers from this
include Kenya, which just opened its first fast-train service from the
capital Nairobi to its Mombasa port. China funded its construction cost
of $3.8 billion through a loan with China Export-Import Bank, which will
ultimately attach to other countries in East Africa. The project was
completed six months ahead of schedule, with construction completed in
two-and-a-half years and covering 610 kilometers of track. Within China,
BRI has now developed the central economic growth strategy, as
strategies to promote it across the country have been released.
According to our Chinese colleagues, in terms of scope and significance
BRI is now similar to the 1978 economic reforms which opened China to
By the sheer scope and span of this initiative, it appears rational
for the Philippines to take part. According to our SYSU counterparts,
China has an excess of capital and is undergoing industrial
overcapacity. It also has rich experiences in infrastructure
construction. This means it has engineering and financial resources to
contribute to countries’ infrastructure development. With the Philippine
Development Plan fixated on infrastructure development, these resources
are invaluable. Furthermore, with US foreign policy shifting toward
protectionism, there seems to be a rebalancing of economic power toward
the East. BRI seems to provide a practicable trade alternative against
the emerging protectionism of the US.
Despite these positives, exchanges with SYSU counterparts show BRI is
not without its challenges. In particular, it is unclear how much China
will be able to afford, considering a number of developing countries
across the BRI’s path may be willing to tap its expertise and finances.
It is also unclear what kind of institutional arrangements will form the
basis of the BRI and its relationship with other trade arrangements,
such as the Asia Pacific Economic Cooperation, the Regional
Comprehensive Economic Partnership with the ASEAN and its various
free-trade agreements with different countries.
With these observations and developments in the Philippines,
participants in the BRI need both pragmatism and far-sightedness.
Pragmatism because the global economic order is shifting, and
far-sightedness because we need to be open to other trading partners in
finding new markets and new value chain linkages for our economy.
The expected rise in property values tied to projects under the Belt
and Road Initiative makes it a significant driver in the Philippine real
estate market over the coming periods, according to real estate
consultancy firm Santos Knight Frank. The initiative is a global policy
on infrastructure development and economic cooperation advanced by
Chinese cross-border capital investments to the Philippines under the
Belt and Road Initiative will be instrumental to expand trade, build
critical infrastructure and provide greater employment to sustain the
country’s growth momentum.
China is already the Philippines’ biggest trade partner under the
BRI. With the $1 trillion worth of investments expected under the whole
initiative, the Philippines will gain greater access to cross-border
capital and sustain its robust economic growth.
Janine M. Altares is a graduate student in international trade from Cebu University in Cebu, Philippines.
The opinions expressed here are those of the writer and do not represent the views of China Daily and China Daily website.