China to become 2nd largest trade partner of Philippines as recovery takes hold
After growing more than 30 percent annually for seven years since 2000, bilateral trade dropped by 6.7 percent for the year of2008 to 28.28 billion U.S. dollars, Chinese customs statistics show.
The decline widened in 2009 as in the first seven months trade income dived 43.6 percent year-on-year to 10.4 billion U.S. dollars, the steepest decline among Southeast Asian countries trading with China.
"The growth of China-Philippines trade was robust in the past. I think as the global recovery takes hold, our bilateral trade will regain its vigor," Chinese Ambassador to the Philippines Liu Jianchao told Xinhua on the eve of the establishment of the China-ASEAN (the Association of Southeast Asian Nations) free trade area on Jan. 1, 2010.
Complimentarity exists in the two countries' economies and there is room for growth, Liu said, for example, China expects more imports of agricultural, mining and aquatic products from the Philippines.
Data from the Chinese Embassy show that around 80 percent of Philippine merchandise exports to China at the moment are electronic parts. Officials expect a more diversified product mix for trade as the China-ASEAN free trade agreement (FTA) takes effect. Under the agreement, duties of more than 7,000 trading items will be reduced to zero by Jan. 1, 2010.
"In the next five years, the growth rate of bilateral trade will double or triple at the trend we are engaging with China," said Amador Pablo, senior trade specialist of the Department of Trade and Industry of the Philippines.
Pablo told Xinhua over phone that China has been the Philippines' third largest trading partner since 2005 and is expected to become the No. 2 as the Philippines has yet fully developed the Chinese market.
Separately, Philippine Central Bank Governor Amando Tetangco, a key economic manager of the Arroyo administration, said the government fully supports efforts to increase trade and investment with China, especially now when Asia is leading the world out of recession.
Since the outbreak of the economic meltdown late last year, Asian officials have pledged to expand cooperation to reduce the region's export-dependence on Western consumers.
According to the official data, China is currently the largest trading partner of Vietnam and the second largest partner of Thailand, Singapore and Myanmar.
"So you will see in the near future, China will become a bigger trading partner not only of the Philippines but also of other ASEAN countries," Tetangco said.
The popularity of Chinese products is ever more visible during the Christmas season here in the Philippines. Holiday shoppers stream in and out of Manila's Chinatown malls and crowd the narrow streets over the past two weeks.
In the 168 shopping mall, a popular destination for shoppers hunting Made-in-China goods, the number of visitors topped 120,000daily in good days and averaged 100,000 during the Christmas season, the mall operator told Xinhua.
"The quality is ok but what is important is things are definitely cheaper here. See, so many people are shopping here," a Filipino shopper said.
Zhou Zongyi, a Chinese immigrant who sells toys, light bulbs and crystal displays, said low-income Filipino families depend on Chinese imports for daily necessities, from things as simple as a broom.
Zhou said over a decade the influx of Chinese goods, helped by gradual reduction in tariffs, kept the prices of basic commodities low and made life easier for poor families.
"They are able to spend less for quality products. Booming trade does have a positive impact on the low-income families here," Zhou said, adding that because of the booming business opportunities, Chinese retailers now can be found everywhere in the Philippines, from the far north mountainous region to the restive southern Sulu archipelago.
Zhou is a beneficiary himself. When he immigrated to the Philippines in 1987 as a college graduate, Zhou said he was all alone and brought with him only four HK dollars and a watch. Over the past 20 years, by trading goods first from Taiwan, then from the Chinese mainland, Zhou has become rich and his business expands from Manila to provinces.
Now at 46, Zhou is a father of four and among the richest Chinese commodities retailers in town. But he thinks that there is still huge room for growth of retailing business.
"As long as the big environment remains good and pro-trade, we traders can always find a way to survive and make money," Zhou said.
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