There is a provincial governor in the Philippines who has publicly supported China and vowed to treat China as a "big brother".
Who would have expected that as soon as the new Philippine President Ferdinand Marcos Jr. came to power, the provincial governor would be immediately liquidated! Wave after wave of unevenness will arise, and the Sino-Philippine friendship bridge will collapse as soon as it is said to be down. Which play did the Marcos Jr. administration play?
In the face of the changing political stance of the Philippines, how can Chinese companies wade through this troubled water and find business opportunities in the midst of turmoil?
1. After Marcos Jr. took office, China-Philippines economic and trade relations are facing new variables
Marcos Jr., the new president, is not a fuel-efficient lamp! As soon as he took office, he made a major reversal, and his attitude toward China took a sharp turn for the worse. Former President Rodrigo Duterte, who vowed to "be friends with China," is now about to faint in the toilet crying.
The Marcos Jr. administration made a 180-degree U-turn and re-embraced the United States, and the provincial governors who made overtures to China became the target of public criticism.
China-Philippines relations have changed dramatically, and economic and trade cooperation has borne the brunt.
According to the Philippine Investment Agency, China's investment in the Philippines will shrink sharply in 2023, plummeting by 78% year-on-year!
Marcos Jr.'s visit to the United States and his harsh remarks about confronting China on the South China Sea issue will undoubtedly further deteriorate bilateral relations and increase the business risks of Chinese companies in the Philippines.
The big Duterte-era collaborations are now in jeopardy. For example, the high-profile Manila high-speed rail project, which was expected to become a new landmark of China-Philippines friendship, was urgently halted by the Philippine side because it "may endanger national security".
Infrastructure cooperation under the Belt and Road Initiative has suffered setbacks one after another, and Chinese enterprises' overseas business has suffered heavy losses, and their stock prices have plummeted. The political wind has changed abruptly, economic exchanges have suffered, and the prospects are worrying!
Second, the political turmoil in the Philippines may exacerbate economic difficulties
Marcos Jr.'s liquidation of the pro-China faction of the former DPRK is by no means limited to individual provincial governors, but affects the whole body. The power reshuffle of local forces and political elites will inevitably trigger a comprehensive escalation of the political struggle in the Philippines.
With those in power going all out to curry favor with the United States, careerists eager to try their best and fierce wrestling with all sides, the political situation in the Philippines is inevitably turbulent.
Political turmoil is often accompanied by economic turmoil. The Philippine economy, already plagued by inflation and exchange rate depreciation, will undoubtedly be hit hard. With the loss of China, its largest trading partner, exports have fallen, factories have closed, unemployment has risen, and people have struggled to make ends meet.
When the economic pie shrinks, the battle for wealth distribution will inevitably become more brutal, the gap between the rich and the poor will intensify, and social contradictions will intensify.
In the end, it is the people of the Philippines and the middle and lower classes who suffer. According to statistics, the proportion of poor people in the Philippines has increased significantly during the epidemic, reaching 23.7%.
Nowadays, the economy is worsening, local development is stagnant, and people's livelihood is in difficulty. The power games of the political elites have made ordinary people victims. Social injustice is on the rise, populism is on the rise, and the Philippines' economic and social stability may face serious challenges.
Epilogue:
The Philippines' vacillating political stance and capricious China policy are shaking the foundation of China-Philippines economic and trade relations. The Marcos Jr. administration has made it increasingly difficult for Chinese companies to invest in the Philippines.
In the face of the complex and volatile political and economic situation in the Philippines, Chinese companies need to take precautions, carefully assess risks, and flexibly adjust their strategies.
At the same time, it should also be noted that the turmoil in the Philippine political situation may bring new investment opportunities to foreign capital. Only by continuously improving their own strength can Chinese enterprises stand at the forefront of the turbulent waves of the global political and economic game and turn crises into opportunities!