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Group condemns another Chinese ‘hit-and-run’ incident on PHL waters; calls for search and rescue for 14 missing fishers

A fishers’ group is up in arms over reports of another collision incident involving a Chinese vessel that led to the disappearance of 14 Filipino fishermen off the coast of Occidental Mindoro Sunday, June 28.

“We strongly condemn this collision incident in our territorial waters involving our Filipino fishermen and a Chinese vessel. We call on the authorities to expedite the search and rescue operations for the missing fishing crew and, as much as possible, must be returned to their families safe,” the Pambansang Lakas ng Kilusang Mamamalakaya ng Pilipinas (PAMALAKAYA) in a statement this morning said.

The group also demanded that the Hong Kong-registered cargo ship Vina Moon be held accountable for endangering the lives of the missing fisher folk.

Other reports however said the name of the Chinese ship is MV Vienna Wood.

The Philippine Coast Guard (PCG) said the 14 crew members of the local fishing boat Liberty Cinco, including two employees of the Irma Fishing Corporation, owners of the vessel, remain missing.  

The PCG also reported that the capsized Liberty Cinco, with a badly-damaged hull, was found off the coast of Cape Calavite in Mindoro Island but the crew are nowhere to be found.

It was not indicated whether the Vienna Wood/Vina Moon has reported the incident to the coast guard after it happened.

The Chinese crew professed ignorance of the incident when questioned by authorities, the PCG reportedly said in interviews by the media.

PCG however said the Chinese vessel also sustained damages on its prow, indicating it rammed the capsized local fishing boat.

In a statement, PAMALAKAYA National Chairperson Fernando Hicap likened the recent incident to the ramming and sinking of the F/B Gem-Ver1 by a Chinese vessel that endangered the lives of 22 fishermen in Recto Bank last year.

Hicap said it is the very same month last year that another Chinese vessel almost killed 22 Filipino fisher folk in a hit-and-run incident at Recto Bank, an underwater reef formation in the West Philippine Sea that is internationally-recognized as part of the exclusive economic territory of the Philippines.

Hicap lamented that the 22 fishermen who hail from San Jose, Occidental Mindoro have yet to be fully compensated by the Chinese vessel Yuemaobinyu 42212 that hit and abandoned them last year.

“One year of no justice and yet another tragic incident happened,” PAMALAKAYA said.

“We do not want a repeat of the injustice against our fisher folk. The owner and captain of the the Chinese ship must be held into account for ramming them and for their violation of the rights of our Filipino fisher folk in our own seas,” the group added. # (Raymund B. Villanueva)

Covid 19, the Neo-liberal Policies and Chinese Imperialism (Part II, Section II)

By Prof. Edberto Malvar Villegas, PhD

(This article is presented in two parts and will be given in three posts. The first part covers “Covid 19 in the Phillippines”, “The Imperialist Neo-Liberal Policies of the IMF-WB-WTO”, and the “The Neo-Liberal Policies and US Overproduction”. The second part comprises “The Emergence of Chinese Imperialism”, “China’s AIIB”, “China’s Debt Trap”, “The US-China Rivalry and Covid 19” and the “Conclusion”. While the rapid spread of Covid 19 in the Philippines is due to its poor health system because of the policies of the IMF-WB, the virus was directly caused by the easy entry of Chinese nationals into the country due to the too open accommodation of the Duterte’s administration of Chinese imperialism.)

China’s Debt Trap

The Philippines, which is an original founder of the Asian Infrastructure Investment Bank (AIIB) and is a participant in the Belt and Silk Road initiative, has borrowed from the bank the amount of $217 million for development of infrastructures in the NCR. Duterte has also borrowed from the Chinese government-owned Eximbank, which will finance 19 of his 75 projects under his vaunted Build-Build-Build (BBB) program, which includes a P4.37 billion loan for the Chico River dam and P12.2 billion for the Kaliwa dam projects. It is to be noted that out of the BBB’s 75 projects, only nine are barely starting and it is the last lap of Duterte’s term. Where are all the borrowed monies from China, with their high interest of 2% per annum, 10 times higher than Japanese loans? It may be just lying idle in the Bangko Sentral ng Pilipinas or being used elsewhere than its intended purpose.

We fear that the Philippines will just fall into another debt trap with China as it has with loans from the IMF and WB. Zambia, Djibouti, Guyana, Pakistan and Sri-Lanka are already in the deadly grip of such Chinese debt traps with Sri-Lanka having to give up its Hambantota port in its southernmost part to defray unpaid loans from Chlna. The acquisition of Hambantota was accomplished through the help of a $8 million bribe the Chinese extended to Sri-Lanka president Rajapaska to support his presidential campaign. (New York Times, April 20, 2019) Actually, China Construction Company, the parent company of Chlna Harbor which constructed the Hambantota port, using Chinese workers, was banned by the WB from participating in the biddings for the Bank’s projects for 8 years due to corrupt practices in the Philippines. (Forbes, op. cit.)

China has insidiously inserted in its loan contracts with other countries a provision which specifies that in case of a default on its loans, a country must give up its immunity of sovereign rights and forfeit property, which could include land and sea. This is found in the contract for the Philippine loan for the Kaliwa Dam in Article 8.1(Waiver of immunity). Such onerous provision has also been included in China’s loan contracts with other developing countries like Guyana, Zambia and Kyrgystan (Rappler, Made in China, 2019) Workers in Kitwi, Zambia, have protested such odious condition, rioting and battling police and attacking Chinese shops, when they found out that their government-owned timber company, ZAFFICO, will be turned over to China since their political leaders could not pay a loan to Beijing. They were afraid that they will be replaced by Chinese workers as Chinese investors are wont to do in countries where they operate. Beijing, confronted with such violent reactions to its planned acquisition of ZAFFICO, restructured the loan. (Forbes, ibid.)

China’s “debt diplomacy” is a military as well as an economic strategy in its fierce competition with the US to control vital sea and land routes. China has docked its submarines at Hambatota port in Sri-Lanka since it is located in a strategic area near the Suez Canal where thousands of ships, including 4,500 oil tankers, pass by annually. Beijing has also already installed military facilities in the Spratly Group of islands in the West Philippine Sea (South China Sea to Beijing) as its route is traversed by 50% of world trade yearly. The weak Philippine Rodrigo Duterte has accommodated, in fact acceded, to China’s takeover of the Spratly islands, even though these lie within the exclusive economic zone of the Philippines, whose claim to the area was upheld by the UN arbitral tribunal at the Hague in 2016. Duterte refuses to assert the Philippines’s sovereign rights to Spratlys, claiming China will declare war on his country if he did. What a dereliction of duty! He should resign or be booted out from power if he is such s wimp of a president that he cannot even defend the integrity of the country. China consequently warned US ships from patrolling in the vicinity of the Spratly’s Group of islands, insisting they lie within its territorial jurisdiction.

US and China’s Rivalry and Covid 19

The deadlock struggle of US and China to control global world trade has even led them of accusing each other of creating Covid 19 in the other’s respective laboratory for biological warfare. US military scientists say that Covid 19 is a man-made combination of viruses obtained from bats and pangolins which accidentally leaked out from a lab in Wuhan, China, due to faulty handling. They debunked China’s claim that the virus came from bats in a wet-market in Wuhan as a cover-up since there are no bats for sale in that market. The lab concerned is only several blocks away from the market. Chinese officials fired back that the virus came from a lab in Fort Derrick, US, and was brought to China by American soldiers during a military sports competition in Wuhan in October, 2019. (Read the arguments of both sides which are replete in the internet and decide for yourself.) Be that as it may, whether Covid 19 originated from a Chinese or American lab for biological warfare, its effect on the world has been devastating with hundreds of thousands dying from it. The deadly activities of the imperialist powers to prepare for war against each other by creating dangerous viruses in their labs should be condemned by the UN and an investigation started by this body on which country is guilty behind this world pandemic after we have passed through it.

The quarrel between American and Chinese imperialists is also adversely affecting the job security of US workers caused by the raising of tariffs by the Trump government on goods coming from China, leading to the rising of production costs in American firms and the retrenchment of workers. (In the US, it is to be noted that the top 1/10 of 1% of Americans own almost as much wealth as the bottom 90%, according to erstwhile candidate for US president, Senator Bernie Sanders, based on the findings of his research team.) We do not know the effects of the US-China trade war in Chinese factories, since Xi Jinping’s government is very secretive regarding the going-on in his society.

Conclusion

We will survive this Covid pandemic, but there is still a heavy responsibility facing all of us. US monopoly capitalism (imperialism) and its rival, China, with its equally rapacious imperialism, are causing the Filipino masses and other peoples of the world to be impoverished, while their leaders subservient to the imperialists wallow in wealth and power. Indeed, imperialism with its predatory activities and its contradictions, primarily its warlike nature using the masses as cannon fodder, is the scourge of humankind. Imperialism must be finally expunged from the face of the earth in order to uphold the well-being of the exploited classes, the wretched of societies, and to prevent the destruction of our planet caused by capitalist greed. A new generation of socially-dedicated and unselfish individuals, coming from a united front led by the enlightened working classes with their allies, both national and international, must arise to finally dismantle the dominance of those whose ,main concern is to plunder for profit no matter the costs. A new world order must be built to advance first and foremost the welfare of the majority classes and zealously guard the rights of all persons. History is calling each of us to be counted in this new generation and contribute what we can to accomplish this great task for the salvation of our species and our mother earth. #

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The author is a retired Social Sciences Professor of the University of the Philippines-Manila and De La Salle University. He is also a novelist and an author of several books on many topics.

Covid 19, the Neo-liberal policies and Chinese Imperialism (Part2)

By Prof. Edberto Malvar Villegas, PhD

(This article is presented in two parts and will be given in three posts. The first part covers “Covid 19 in the Phillippines”, “The Imperialist Neo-Liberal Policies of the IMF-WB-WTO”, and the “The Neo-Liberal Policies and US Overproduction”. The second part comprises “The Emergence of Chinese Imperialism”, “China’s AIIB”, “China’s Debt Trap”, “The US-China Rivalry and Covid 19” and the “Conclusion”. While the rapid spread of Covid 19 in the Philippines is due to its poor health system because of the policies of the IMF-WB, the virus was directly caused by the easy entry of Chinese nationals into the country due to the too open accommodation of the Duterte’s administration of Chinese imperialism.)

The Emergence of Chinese Imperialism

China entered into the global trade during the period of Deng Xiaoping, after the death in 1976 of Mao Tse-tung, (founding father of the Chinese People’s Republic), the incarceration and eventual deaths of the so-called Gang of Four in 1978 and the purge and executions of around 20,000 Maoists (adherents to the ideology of Marxism-Leninism-Maoism) who were leading cadres of Mao’s cultural revolution. China’s GDP grew by leaps and bounds, reaching 11% in the late 1990’s due to very low workers’ wages in government corporations in partnerships with foreign MNCs, mostly US and Japanese, located in free trade zones. Deng restored capitalism in China and considered the establishments of free trade zones as vital part of his so-called four modernization program. Hundreds of millions Chinese workers in sweat shops in the trade zones were receiving the lowest wages in the world ($2/day) and the number of those living below the poverty line in China was growing at a fast rate. (Pao-yu Ching, 2010) Soon, an emergent Chinese bourgeoisie, based on trading activities and mostly former government bureaucrats were amassing great wealth in tandem with corrupt government officials so that by the first decade of the 21th century, China had the most number of billionaires in the world. (Forbes) The new rich were living in the cities, particularly in Shanghai and Beijing, while the vast Chinese majority (60%) of its population belonging to the lower classes, earning below $2 to $20/day were mostly inhabitants in the provinces. (Pew Research Center, 2015) Thirty-nine percent of the Chinese people are middle class and 1% occupies the upper echelons of society, which include billionaire businessmen and politicians.

President Rodrigo Roa Duterte poses for posterity with People’s Republic of China Vice President Wang Qishan who paid a courtesy call on the President at the Foshan International Sports and Cultural Center in Guangdong on August 31, 2019. (Palace photo)

Since the Chinese elite political leadership in China has grown to be a totalitarian state after the demise of Mao who called for a rule of the working masses, it began to suppress dissent from workers and students regarding its economic and political policies. In 1989, the Chinese government massacred with tanks and machine guns around 10,000 demonstrators, led by students and workers, in Tianamen Square in Beijing. The demonstrators were criticizing government corruptions and asking for democratic reforms and transparency from their political leaders. (BBC, Dec. 23, 2017) Since then, protests in China have occurred in far-off provinces mostly launched by striking workers and miners, especially in the provinces of Guangdong and Heilonging. (China Labor Bulletin) In 2018, however, millions of protesters led by students erupted in the territory of Hong Kong, demanding democratic reforms. For China to call itself still a Communist country is a misnomer since Marxist communism, to which Mao adheres, advocates the abolition of capitalism, the disappearance of the state and the prioritization of the welfare of the poor classes. The current Chinese regime has called its kind of state (bureaucrat) capitalism as actually socialism with “Chinese characteristics” as envisioned by Mao! Mao may be restlessly turning in his grave.

China accumulated tremendous surplus capital from the surplus value created by underpaid workers in the factories of the comprador and bureaucrat capitalists. China began lending this surplus capital to other nations for it to earn interest. In the late 1990’s, China’s bourgeoisie targeted Africa as the region it can mostly dump its surplus goods and capital, using its strategy of a “debt diplomacy” to aggressively penetrate the continent. Some Chinese critics of their government have accused it of turning Africa into its “second continent” to exploit the latter’s very rich natural resources. Africa supplies a third of Chinese oil and is very abundant, among other natural resources, with manganese and cobalt, the first used as ingredient for steel production and the second for electronics.(Forbes, Aug.4, 2018) Soon 10,000 Chinese companies, bringing Chinese workers with them, were set up in Africa and the continent became the foremost area for Chinese imperialism.

In order to receive favorable concessions, the Sino government, particularly that of the current president Xi Jinping, began unloading their huge surplus capital, derived from the wage slavery of Chinese workers as debts to African countries like Zambia, Nigeria, Kenya, Djibouti and others. As of 2020, total African debt to China is $200 billion, or 15% of its external debts. Beijing started to bribe corrupt African politicians and were able to impose debt contracts advantageous to China.

African critics have accused China of building infrastructures, highways, buildings, bridges, etc. using poor and overpriced materials. These critics specially mention cutting costs by Chinese contractors for the shoddy infrastructures they build in Africa. (Forbes, ibid.) It is to be noted at this point that bridges and buildings in China, for that matter, have been collapsing due to lack of government biddings and a non-transparent government. As one Chinese furniture maker says, “Who will police the police?” so that he says the Chinese people are so used to sloppy government constructions in their country. (Morning edition, Aug. 2012) For instance, from April 2011 to August 2012 alone,  eight major bridges collapsed in China, the most known of which was the $300 million Yangmingtan bridge in Harbin City which broke only after less than 2 years of operation. It is the same situation with buildings with the latest the Xinjia Express Hotel, being used to house Covid 19 patients in the city of Wenshou, collapsing in March, 2020, with 10 dead. On May, 2019, a Shanghai building collapsed with 25 dead and in October of the same year several buildings housing migrant workers stumbled to the ground in the province of Wenghou with 22 dead. (smartcities. Dive site)


President Rodrigo Roa Duterte gives a warm welcome to Communist Party of China (CPC) Chongqing Party Chief Chen Min’er who paid a courtesy call on the President at the Malacañan Palace on September 16, 2019. (Palace photo)

China’s Asian Infrastructure and the AIIB

In 2015, China established the AIIB (Asian Infrastructure and Investment Bank) for Chinese capitalists to rival US imperialist dominance in the world economy and as an alternative to the WB and its regional bank in Asia, the Asian Development Bank (ADB). Though AIIB’s capital at $100 billion is only about half of WB’s and its membership totals 84 compared to WB’s 189, the goal of this government-controlled bank is to extend China’s trade influence over other countries by funding the so-called Belt and Silk Road through Asia, Africa, Europe and eventually to the Americas. It is envisioned to achieve this ambitious project by spending from $4 to $8 trillion by the year 2049 through the expansions of infrastructures, highway complexes, railroads, ports, airports, etcetera along the Belt and Silk Road. China’s philosophy of development is supposed to be based on building mega infrastructures which it poses against the export-oriented development policy of the IMF-WB-WTO.

The Belt Road, which is actually a maritime route, would cover the South China Sea, the South Pacific Ocean, and a wide part of the Indian Ocean. Does one have to wonder why China is aggressively pushing for the control of the South China Sea, including the rich resources under it, at the expense of the Philippines under its slavishly subservient to China, President Rodrigo Duterte? The gains of countries which participate in the Belt and Silk Road project have, however, been one-sided, to say the least, in favor of China. For instance, between 2014 to 2016, the trade volume of China along the Belt and Silk Road exceeded $3 trillion, but only created $1.1 billion revenues and 180,000 new jobs for countries involved. (Wikepedia) Overproduction, the inherent contradiction of capitalism, in Chinese factories have grown since the late 1990’s and this is the reason China relies heavily on the export of goods as well as capital, the latter primarily through the AIIB, to maintain its high growth rate. Overproduction has led to hundreds of thousands of goods worth $64 billion stockpiled in factories, representing one-fifth of China’s total production. (Chicago Tribune, Feb. 4, 1997) #

(Conclusion/Section 2 of Part 2: China’s Debt Trap, US-China’s Rivalry and Covid 19)

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The author is a retired Social Sciences Professor of the University of the Philippines-Manila and De La Salle University. He is also a novelist and an author of several books on many topics.

Why do we keep on begging China for friendship?

By Rosario Guzman

In the face of the Filipino people’s growing anxieties about COVID-19 and life after the lockdown, president Duterte keeps heaping praises on China.

The Duterte government was reluctant at first to restrict travel and tourism from China and the operations of Chinese Philippine Offshore Gaming Operators (POGOs) because such moves to contain the virus would allegedly hurt China’s feelings. In the next presidential speeches, the government seemed to have flip-flopped from its cavalier attitude towards the pandemic, but it has not stopped uttering assurances to China.

That the Philippines remains to be by China’s side as China battles COVID-19. Or that China will help the Philippines overcome the health crisis and that president Duterte can directly send a personal note to Chinese president Xi Jin Ping. A you-and-me-against-the-world expression of devotion that is repeated ad nauseum.

In the most recent display, returning presidential spokesperson Harry Roque even got a little chummy – referring to the Philippines-China relationship as “BFF” (“best friends forever”), and that naturally China will prioritize the Philippines in giving COVID aid and funds.

It leaves a nasty taste in the mouth as the country continues to grapple with economic uncertainties and government’s lack of direction six weeks into the lockdown.

But is it even valid to cling on to China, or to any other country for that matter, for our survival as a nation post-COVID? Even without COVID-19, it is already insane as it is for the Philippine government to obsessively hold on to failed neoliberal policies and to rely on foreign capital for development. It would take some sobriety to tackle the question, but looking at the global economy and the seismic changes that have been happening is the sensible way to begin.

The world is coming down

China indeed remains the world’s leading merchandise trader and second to the United States (US) in trade of goods and services in the overall. But the slowdown in global trade that has been quite evident since 2016 on the back of a protracted global economic recession is weighing down on the world’s economies and leading traders. This has only been aggravated by the US-China trade war escalating at the end of 2018, which is hurting aggregate import demand, as well as the outbreak of the COVID-19 pandemic emanating from Wuhan, China at the end of 2019 whose impact on world trade is still unfolding.

World merchandise trade volume had a significantly lower growth of 2.9% in 2018 than the 4.6% growth registered in 2017 that raised false hopes of a return to better days. The slowdown in trade was accompanied by weaker output growth – the world gross domestic product (GDP) grew at exactly the same rate as trade (2.9%) compared to a minimally higher growth of 3.0% the year before.

The numbers turned uglier in 2019 – with the combined effects of the trade tensions in the first half clearly felt and the jitters in the second half over the possible lethal spread of COVID-19 across geographic and economic regions. The slowing world merchandise trade finally declined by 0.1% in volume in 2019. Likewise, in dollar values it fell by 3% to US$18.89 trillion, whereas it registered a 10% increase due to higher energy prices just the year before. The global GDP got even weaker with a preliminary growth figure of only 2.6% for 2019.

Projecting the full impact of COVID-19 on trade, the World Trade Organization (WTO) is looking at a further decline in 2020 by 12.9% in an optimistic scenario or by 31.9% in a pessimistic scenario. The International Monetary Fund (IMF) projects the global GDP growth in 2020 to fall to -3%, which is a major revision over a very short period. This crisis is going to be far worse than the global financial crisis, the IMF has said, and the worst since the Great Depression.

Palace photo.

China is symptomatic

The world is watching China with apprehension. The country has high demand for raw materials and intermediate goods and serves as a final-stage export platform for global production chains. But even before the number of COVID cases started climbing at the start of 2020, China’s GDP growth of 6.1% in 2019 was already slower than the 6.7% rate in 2018. It was in fact the country’s slowest growth in 29 years.

The National Bureau of Statistics of China reported a 6.8% year-on-year decline in the first quarter of 2020. It is the first contraction at least since 1992.

China experienced a deceleration in merchandise trade volume, from 8.0% in 2017 to its moderate growth of 5.2% in 2018. The value of exports slowed sharply at 0.5% growth in 2019 from a 10% rise in 2018, while the value of imports fell by 2.7%, the first decline in three years. In the first two months of 2020, exports plunged by 17.2% year-on-year, while imports shrank by 4%, amid factory shutdowns and travel restrictions to contain the virus.

China’s trade surplus and capital formation are its sources of economic strength to rise as an outward investor. In 2018, China ranked 2nd globally, next to Japan, in terms of foreign direct investment (FDI) outflows, and 3rd, next to the US and Netherlands in terms of FDI outward stock. But like global trade and the global economy, global FDI flows were in three consecutive years of decline, falling by another 13% in 2018. China’s FDI outflows slid further by 18%, the second year for China, based on UNCTAD data.

China’s Ministry of Commerce (MOFCOM) reported a lower figure of 9.6% decline in 2018, pointing out that China’s FDI fall was still significantly lower than the world figure of 29% according to MOFCOM. It does not change the general picture, however, no matter how Beijing paints stability. Outward FDI is falling anywhere else in the world, and it is 40% smaller today than its post-global financial crisis peak in 2015.

The China Global Investment Tracker of the American Enterprise Institute, an alternative to MOFCOM data, which tracks Chinese investment and construction around the world with a threshold of US$100 million, is seeing a dramatic fall in China’s outbound FDI of about 40% for 2019 that will be similar to 2011, with Chinese investment returning to a domestic rather than global phenomenon.

The problem is China cannot simply work from home. It has been infected with the unbounded, reckless desire of expansionism – it has to continue going global.

Palace photo.

BFF?

The Philippines is not even among the top 15 trading partners of China. It is also not a significant destination of Chinese investment.

Hong Kong (PRC) receives about 60% (US$86.9 billion) of China’s net FDI, followed by the US (US$7.5 billion), Virgin Islands (US$7.1 billion), Singapore (US$6.4 billion), and Cayman Islands (US$5.5 billion). It is obvious how China uses Hong Kong as an intermediary to take advantage of Hong Kong’s liberalized agreements and competitive currency before investing somewhere else, or of “double dipping” wherein Chinese investors return to the mainland as “foreign investors” and take advantage of additional fiscal incentives.

It also appears that Chinese investors, like many global investors, have sought safe havens such as the Virgin Islands and Cayman Islands as times get rough. Removing these and Hong Kong for the meantime would show that the top 10 recipients of China FDI in 2018 were the US, Singapore, Australia, Indonesia, Canada, Germany, Vietnam, South Korea, United Kingdom, and Thailand. The Philippines does not figure anywhere in the line-up.

On the other hand, some 56 countries along the Belt and Road Initiative (BRI), of which the Philippines is part, captured 12.5% of China’s total outward FDI in 2018. BRI investment has been particularly pronounced in the Middle East and North Africa (MENA) region. Meanwhile in Southeast Asia where China’s state-owned enterprises have particular interest, Cambodia is the favorite.

Narrowing our map now to the Association of Southeast Asian Nations (ASEAN), the Philippines captured 11% of China’s investment in the ASEAN in 2019, which is practically a fair share if China’s investment would be divided equally among the 10 member-countries.

In short, we may be among China’s friends, but we are not the best, and forever has not even started.

On the other hand, among the Philippines’ trading partners, China ranks 4th in terms of contribution to exports value, next only to US, Japan and Hong Kong (which is a trading port of many other countries apart from the mainland). Indeed, China is the country’s biggest supplier of imported goods, accounting for about one-fourth of Philippine import value, which shows a one-sided trading relationship. Exports to China in the first month of 2020 had a tepid 7% increase, while imports from China continued to increase at double-digit rate (16.4%), a trend that started in 2016.

Singapore, US, Japan and South Korea have remained the country’s top investors, with their combined net FDI of US$963.49 million in 2019. Inflow from China was US$106.16 million. Even if we add US$28.69 million (assuming 60% of what is coming from Hong Kong, since not all Hong Kong FDI is from the mainland), China would still come fifth. Surely there has been a dramatic rise in Chinese investments of 1,751%, from only about US$10.77 million in 2016 to its peak of US$199.38 billion in 2018, but net FDI from China has started to taper off and declined by 47% in 2019.

There has also been a phenomenal increase in Chinese official development assistance (ODA) loans from US$1.5 million in 2016 to US$364.9 million as of 2018. But Chinese ODA still pales in comparison with Japan ODA of US$6.2 billion or even USAID of US886.4 million.

In other words, even in un-reciprocated relationships that our liberalized and subservient economy has become so dependent on, China is not even the best master.

What then is the fixation on China all about?

There can only be one reason for China – it is unstoppable. Since building its internal strength and setting its sights on the endless possibilities in the global economy, China itself has been fixated on itself.

Its expansionist momentum has surged in the last two decades, perfecting its “go global” strategy and embarking on its biggest and most ambitious ever BRI as well as Made in China 2025, moving away from being the world’s factory to producing high-technology products and services. Beijing has been aggressive and at the same time cautious in its policy approach, which gives it confidence that it won’t crash as hard as its economic rivals.

It may be recalled that China held up well during the 2008 global financial crisis, compared to the slow recovery of the European Union and the US. Although today is different – China being the epicenter of the pandemic – China does its best to sustain the image of stability.

International observers have also pointed out that Westerners are finding it much more difficult than Asians to overcome the hardships arising from the health crisis. The observation could just be China’s own messaging echoed through its own propaganda machinery. In any case, China is sustaining the narrative.

This narrative has been copy-pasted in the language of lauding China’s ability to deal with the crisis, official restraint on China bashing and discrimination especially on social media (even setting up laws to penalize “fake news and rumors” about China and COVID-19), and loyalty to China to the point of endangering lives, as The Diplomat has observed across Southeast Asian governments. The Duterte administration has submitted to this propaganda line and has been most explicit about the fear of retaliation from China as expressed by none other than the health secretary.

For the Duterte government, there are two apparent reasons. One could simply be self-serving – that the Duterte administration, the most traveled to China, be able to maintain the business deals and transactions with Chinese firms. No matter how loose and small, these are big enough gains for its entourage of businessmen and cronies.

But the second reason is more on economic survival. The Duterte administration has yet to really jump-start its Build, Build, Build (BBB) infrastructure program and to capture the promise of China’s overflowing construction capital. Of the 100 flagship projects worth Php4.3 trillion, China accounts for only 17% of the number of projects and 16.3% of the cost, while only one of these projects is in the implementation stage. The economic managers are torn between revamping BBB and reallocating its budget for COVID-19 and leaving BBB unscathed. The fact remains, BBB is untenable now more than ever.

On endlessly praising China, the Duterte administration may not have really internalized China’s rhetoric, but it is clearly desperate. The Philippine economy is on its fourth year of slowdown, and the economic managers are still relying on foreign capital for pump-priming instead of building our industrial and agricultural core. The Philippine economy is down with the lingering illness of backwardness that has only been aggravated by neoliberal policies, yet government cannot think of a cure other than to be on its knees. #

Covid 19, the Neo-liberal policies and Chinese Imperialism (Part I)

By Prof. Edberto Malvar Villegas, PhD

(This article is presented in two parts and will be given in three posts. The first part covers “Covid 19 in the Phillippines”, “The Imperialist Neo-Liberal Policies of the IMF-WB-WTO”, and the “The Neo-Liberal Policies and US Overproduction”. The second part comprises “The Emergence of Chinese Imperialism”, “China’s AIIB”, “China’s Debt Trap”, “The US-China Rivalry and Covid 19” and the “Conclusion”. While the rapid spread of Covid 19 in the Philippines is due to its poor health system because of the policies of the IMF-WB, the virus was directly caused by the easy entry of Chinese nationals into the country due to the too open accommodation of the Duterte’s administration of Chinese imperialism.)

Covid 19 in the Philippines

The Covid 19 pandemic has put into full light the long neglect of the Philippine government of its health system because of its strict adherence to the neo-liberal policies of deregulation and privatization initiated by the Group of 7 capitalist nations, led by the United States, in the developing countries, starting in the latter 1970’s. Private hospitals in the Philippines, which purchase their drugs and other medical supplies from the foreign multinational companies (MNCs) have continuously increased their prices, as the government has abided by the deregulation policy. Hospitalization for an ordinary Filipino worker costs three months or more of his monthly wages. Even government hospitals like the Philippine General Hospital ], because of government low priority for health, have hiked their fees and reduced the number of their free patients to still remain viable. Further, the Duterte government is planning to privatize 33 out of 72 government hospitals like the National Orthopedic Center, the National Center for Mental Health, the Eastern Visayas Regional Medical Center, Dr. Jesus Fabella Maternity Hospital and others. (InquirerNet) These policies of deregulation of prices and eventual privatization of public hospitals have compromised the quality of health services extended to the general public so that when Covid 19 came roaring into our shores, brought by Chinese tourists, there was a dire lack of PPE (personal protective equipment) like face masks and shields, long sleeve gowns, gloves and respirators for health workers. Ventilators and hospital beds for Covid 19 patients were inadequate. Testing for the virus was also very limited so that people may not even be aware that their neighbor is already Covid positive.

The Philippines due to its unprepared health system, coupled with the gross incompetence of Duterte has become No. 1 by April 15, 2020 with Covid positive people in Southeast Asia with 5,222 cases and 335 deaths followed by Malaysia with 4,917 cases and 77 deaths. (Statista) The martial-law like implementation of the enhanced community quarantine (ECQ), only in the Philippines, has added more sufferings to the inhabitants of Luzon apart from the high costs of hospitalization if they catch the virus.

The low regard of the Philippine government for the health of its people compared to its payment of foreign debts is shown by the constant decrease of its health budget through the years. For example, from 2016 to 2020, the health budget declined by 11% from P113 billion to P101 billion. (Department of Health [DOH] website) The DOH’s measly P101 billion budget in the 2020 General Appropriations Act is far below that of the payment for interest alone for foreign and local debts of P451 billion and the budget for the Armed Forces at P192 billion in the same year.(2020 national budget) In the Philippines there is only one doctor to every 33,000 Filipinos when the required ratio should be 1 to 1000 and it is worse for the number of nurses at 1 to 50,000. Thousands of Filipino nurses and doctors go abroad to work since there is a lack of job opportunities in the country and salaries are very low. This is why six out of 10 Filipinos die without seeing a doctor. (IBON) Philhealth, which seeks to lower the costs of hospitalization, has been mired in corruption and some have even called for its abolition.

Private hospitals cannot be relied upon to meet the growing health needs of Fillpinos because their expertise are concentrated on the sickness of the rich like cancer and heart diseases and give less priority to contagious diseases like the Covid 19 pandemic which hit the poor the most. Infectious diseases fall under the category of public health concerns which government hospitals are supposed to be more expected to address. Private hospitals exist primarily to profit from the sick after all and not for public service. The inequity of Philippine society has come to the fore because of the Covid pandemic with more poor dying from it than the rich. This is further exacerbated because the costs of medicines in the Philippines are also the highest in Southeast Asia, benefiting the foreign pharmaceutical MNCs like Pfizer, Wyeth, Sanofi Aventis and Abbot that dominate the drug industry in the country.

Photo by Joseph Cuevas/Kodao

The Neo-Liberal Policies of the IMF-WB-WTO

The reason why the International Monetary Fund and the World Bank, the implementers of neo-liberal policies in the Philippines, have demanded privatization and deregulation in the country’s health system is that these financial institutions, both dominated by US capital, want the government to prioritize the payments of foreign debts obtained from the Group of 7 nations. The priority for the defrayment of debts has been made legal by PD 1177, an obsolete law passed during the martial law regime of Marcos which should have long been abolished after EDSA I. This law allows the automatic appropriation for debts in the national budget so that if our debts grow so huge, there may be zero budget left for health and other social services like education and social welfare. This is why the government, in order to meet its debt obligations, has also squeezed more taxes like Train 1 and 2 (VATs required by the IMF-WB) from the masses since the rich has preferential treatment for decrease in taxes from the Duterte regime.

Among all nations, the Philippines has been the most obedient client of the International Monetary Fund (IMF) with 34 stand-by agreements with this institution (completed in 2002). The debts of the Philippines from the IMF-World Bank (WB)consortium has resulted in the high foreign debts of the country, reaching $83.7 billion at present (2020), which still includes the debts absconded by Marcos and his family and new loans from Chinese banks (to be discussed later). The Duterte government has borrowed the greatest percentage of our foreign debts during only its four years in office. (IBON)

Accompanying the stand-by agreements with the IMF are the structural adjustment programs (SAPs) dictated by the WB as conditions for new loans from it and the Fund and from their bank clubs, called the London club and the Paris club. Capitalist banks need to acquire profits from their surplus capital and those of their big depositors, the industrial and commercial capitalists, and they do this by lending this capital to other nations, particularly in the Third World for it to earn interests instead of just lying idle. Loans of surplus capital, particularly to other sovereign nations, also aid the capitalist countries to offset the falling rate of profit due to overproduction in the firms of the industrial capitalists. (To be discussed below) And the IMF-WB, their protector, make sure that those who borrow this surplus capital from capitalist banks and their investors will pay their debts on time. Thus, the stand-by agreements of the Fund and the SAPs of the Bank. The tie-up between the financial capitalists who own banks and other financial institutions with the industrial capitalists(commercial capitalists sell the goods of the industrial capitalists) is what constitutes the “financial oligarchy” or monopoly capitalism(imperialism).

The WB, various SAPs-covered industry, the energy sector, the financial sector and agriculture

The main thrust of these SAPs is trade liberalization in developing countries, aside from its policies of privatization and deregulation. Trade liberalization of goods was more fervidly pushed after the long-delayed founding of the World Trade Organization (WTO) in 1995. WTO became the third member of the capitalist triad, apart from the Fund and the Bank. The Philippine Agreement on Agriculture (AoA) in 1996 with the WTO has become the most oppressive of all the country’s trade agreements with the capitalist nations, killing local agriculture particularly the planting of staple crops of rice and corn, and pauperizing millions of Filipino peasants and farm workers. The capitalist nations, particularly the US, were dumping their surplus agricultural products on the Philippines to avoid overproduction. The increasing importation of rice by the country demanded by AoA eventually made the Philippines to become the no. 1 importer of this crop in the world by early 2000 in spite of its very fertile soil. There were extensive land conversions accompanying the AoA, favoring the comprador bourgeoisie in the real-estate business, like the Villars and the Ayalas, because agricultural lands were being turned into subdivisions and leisure places for the rich like golf courses and high-class resorts.

Photo by Joseph Cuevas/Kodao

The Neo-liberal Policies and US Overproduction

The neo-liberal policies, particularly trade liberalization, were adopted by the capitalist triad due to the growing crisis of overproduction of goods of US monopoly capitalism or imperialism, which started to manifest itself again in the middle of the 1970’s after a lull of 25 years.(Brenner, 1998) After the war periods which ended in 1976, comprising World War II, the Korean and the Vietnam wars, the rate of profits of US corporations were falling by a worrying 40% caused by overproduction of goods as production for wars has ceased. It is always profitable for the US military industrial complex (MIC) or the American monopoly capitalists to have wars in the world so that they can sell their war materiel to the US government which cost so high. It is to be noted that during the US war with Iraq in 2003, the American economy grew by 4.3%, the highest after the lull and never attained since then. After hot war periods (the US MIC’s profit from the cold war with the USSR was less compared to the hot wars), in order to offset the continuing decline in their rates of profits, more and more US corporations and even other foreign corporations were turning to the financial market, particularly the stock market to sell and buy stocks and other financial papers, for their surplus capital to earn profits through credits. This is the reason why after hot wars, bubble economies grow and burst, victimizing ordinary people who also buy the stocks of the capitalists. The worst of such bursting after the 1929 Great Depression in the US caused by a plunge of stock values in Wall St. was the financial crisis of 2008, which also originated in Wall St., the center of world capitalist activities.

The growing poverty in the developing countries, which includes the Philippines, manifested, among other social factors, by the inaccessibility of the poor to affordable health care is due to the imperialist neo-liberal policies implemented by the IMF-WB. (From Adjustments Effects on Child Welfare, Cornia, 1990) In truth, there has long been a pandemic of poverty among the lower echelons of society in the developing countries as shown by the fact that in the Philippines alone, 85 children on the average die every day due to malnourishment, 31,000 per year, higher than from any contagious disease that has visited the country.(Save the Children. org) This is a foregone conclusion since the SAPs affecting the health systems and other aspects of society and the payments of their foreign debts cause the client state of the Group of 7 to suffer budget deficits and they are made to raise more taxes to continue paying their debts and to balance their budgets. The IMF stand-by agreements are euphemistically called by the IMF-WB as “stabilization programs” to attain supposedly stable economic fundamentals, meaning for governments to balance their budgets with savings to boot, the latter of course adding to the defrayment of foreign debts. #

(Part II: Covid 19, the Neo-liberal policies and Chinese Imperialism)

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The author is a retired Social Sciences Professor of the University of the Philippines-Manila and De La Salle University. He is also a novelist and an author of several books on many topics.

Bayan: Problems are Duterte’s real legacy

Bagong Alyansang Makabayan (Bayan) contradicted attempts by the Palace communications team to picture Rodrigo Duterte to be a succesful president, painting his administration to be very problematic for the Filipino people instead.

Reacting to the ongoing #DuterteLegacy campaign launched by the Presidential Communications Operations Office (PCOO), Bayan secretary general Renato Reyes Jr. said 12 major problems may already be listed as the president’s real legacy halfway through Duterte’s government.

Reyes wrote, “We are past the halfway mark of the Duterte regime and Palace propagandists are now trumpeting the president’s so called ‘legacy’. This early on, we can safely say what the legacy of this regime is.”

Duterte’s real legacy, according to Reyes, are the following:

  1. Mass murder. Thousands have been killed in the so-called war on drugs, yet the drug problem persists, the police exposed as corrupt, thus rendering the drug war an abject failure;
  2. Destruction of agriculture. Philippine agriculture has been ruined because of the liberalization of rice importation. The Philippines, an agricultural country, is now the world’s biggest importer or rice;
  3. Surrender of sovereignty. Our sovereign rights in the West Philippine Sea continue to be violated by China with the failure of the regime to uphold the ruling of the Permanent Court of Arbitration in the West Philippine Sea to counter China’s illegal activities;
  4. Normalization of Martial Law. For more than two years, Martial Law was imposed in the entire Mindanao, resulting in widespread human rights violations especially in rural communities. Despite Martial Law, Marawi remains in ruins since no real rehabilitation has taken place;
  5. Militarized bureaucracy. The civilian bureaucracy has been militarized and geared towards counter-insurgency, again resulting in massive human rights violations. Duterte’s Executive Order 70 (ordering heightened counter-insurgency operations nationwide) has given way to de facto Martial Law;
  6. Weaponization of the law. The law has been weaponized to target critics of the administration. Trumped-up charges against activists, media, church leaders, the Opposition, lawyers, and other critics have become so rampant. Mass arrests have recently taken place.
  7. ENDO pa rin. Contractualization remains rampant despite the promise of the President to end it. He also vetoed a watered-down version of a security of tenure law. Labor export remains the principal safety valve of the economy;
  8. More taxes. The TRAIN (Tax Reform for Acceleration and Inclusion) law and its regime of new taxes that burden the poor is part of Duterte’s anti-people legacy;
  9. Economic slowdown. The slowest GDP (Gross Domestic Product) growth rate in eight years was registered under the Duterte regime. The much-touted “Build Build Build” program proved to be a dud. The slowdown of domestic agriculture proved to be the disastrous result of neoliberal policies;
  10. Worsening corruption. Bureaucratic corruption remains and even State security forces have been exposed as being the most corrupt. Transparency International gave the Philippines its lowest rating since 2012, ranking the Philippines as 113th out of 180 countries. Duterte cronies like Dennis Uy have been favored to get strategic industries and utilities;
  11. Marcos restoration. A hero’s burial for the dictator Marcos and a clear pathway for their return to Malacañang; and
  12. Tyranny. Undermining checks and balance in government. Like a true dictator, Duterte controlled Congress, removed a sitting Chief Justice, and concentrated power with the Executive. Things can take a turn for the worse if Charter change pushes through.

Aside from an agressive social media campaign, PCOO spokespersons have appeared in television and radio programs popularizing the #DuterteLegacy campaign.

It hit a snag however when PCOO undersecretary Lorraine Badoy was reprimanded by hosts of the TV5 program “The Chiefs” for taking the occassion to Red-bait an economic analyst instead, unleashing a flood of criticisms online. # (Raymund B. Villanueva)

Facebook apologizes for translating Chinese leader Xi Jinping’s name as ‘Mr. Shithole’

By Mong Palatino

Facebook issued an apology after a technical error translated Chinese leader Xi Jinping’s name as ‘Mr. Shithole’.

The error was noticed when the official Facebook page of Myanmar’s state counsellor posted updates regarding the official visit of Xi in Myanmar on 17-18 January 2020. The post, which was written in Burmese, cited several important trade and other bilateral agreements signed by Xi and the Myanmar government.

Xi’s visit highlighted China’s increasing economic and political influence in Myanmar. Its investments are both welcomed and criticized because of their social impact.

Journalists were the first to highlight the wrong translation of Xi’s name. They also noted that this was only on Facebook because Google Translate yielded a correct translation.

It took more than 24 hours before the error was corrected. Facebook also offered its apology:

We have fixed an issue regarding Burmese (Myanmar) to English translations on Facebook and are working to identify the cause to ensure that it doesn’t happen again…This issue is not a reflection of the way our products should work and we sincerely apologise for the offence this has caused.

Poppy McPherson, the Myanmar bureau chief of Reuters, posted screenshots of the translation errors:

Facebook has temporarily disabled the translation of Burmese to English posts. As of this writing, the translation option has not been restored.

Aside from the error in translating Xi’s name, a Facebook bug also prevented Kachin users from posting updates in their native language. There was initial speculation that this was related to Xi’s visit in Myanmar but it was reported as a purely technical problem. Many Kachin residents are opposing a China-funded dam project in their region.

Facebook has been previously criticized for its slow response in addressing the spread of hate speech targeting ethnic minorities in Myanmar. It has since then adopted measures aimed at combating disinformation perpetrated by state-backed accounts. #

(This article was first published by Global Voices, an international and multilingual community of bloggers, journalists, translators, academics, and human rights activists. It is republished by Kodao as part of a content sharing agreement.)


Cagayanos want blacksand mining ‘disguised as dredging’ stopped

By ACE ALEGRE
www.nordis.net

BAGUIO CITY — Cagayanos asked President Rodrigo Duterte’s help in stopping dredging activities at the mouth of Cagayan River they said is “disguised” magnetite mining.

The Cagayan Province Provincial Board approved last August 7 a resolution asking the president to suspend the dredging operations at the mouth of the Cagayan River in Aparri town.

This came after the Department of Public Works and Highways (DPWH) confirmed that it did not issue any dredging permit to the private firm involved in the dredging.

Pacific Offshore Exploration Inc.  (POEI), a firm owned by a former Isabela town mayor, has been dredging the country’s biggest river system for months.

The company reportedly ships the dredged materials to a reclamation project in Hong Kong and may earn about $50 million monthly if it sells the sand at current local prices, according to the resolution.

A cubic meter of sand in Cagayan is being sold at P160 to P180.

The exportation of black sand to Hong Kong was met with protests from locals.

Provincial Board member and resolution author Mila Lauigan said the deal with the dredgers has to be investigated.

“That is why we are appealing to the President to immediately suspend the dredging operations and inquire whether the company has complied with all the requirements before it proceeds,” Lauigan said.

According to the provincial legislator, “the contractor is only extracting black sand and leaves waste (non-mineral sand) material back into the river.”

It is reason why environmentalists and locals are raising heaven and hell [while] Gov. Manuel Mamba had been defending POEI’s operations amidst the environmental mess it has been causing, she said.

Mamba’s camp had been defending the dredging operation they said is meant to prepare for the reopening the Port of Aparri.

Mamba said the port’s reopening would improve economic and trade relations between Cagayan province and China as well as neighboring Asian countries.

Mamba, who entered into a Memorandum of Agreement (MOA) with Pacific Offshore Exploration Inc. (POEI) under the authority of a resolution passed by the Cagayan Provincial Board last January, insists there is only dredging activities in the area and not magnetite (black sand) mining.

The provincial board has yet to be shown a copy of the memorandum of agreement between Mamba and POEI.

Mamba’s camp said there is no economic value to the exportation and the dredging activities help clear the river of heavy silt for free.

Engr. Mario Ancheta of the Department of Environment and Natural Resources’ Mines and Geosciences Bureau agreed with the governor that there is no mining but dredging operations that should be sanctioned by the DPWH.

“There is sand extraction, but it is not mining but dredging,” Ancheta said.

The Cagayan Export Zone Authority (CEZA), meanwhile, had been silent on the controversial dredging and “exporting” of the dredged sand to HK.

Immigration officials and the maritime police in Cagayan are also silent on the presence of foreign workers on the sand barges regularly approaching the shores of Aparri town. # (With additional reports from Raymund B. Villanueva) nordis.net / Photo from Gising Cagayan Facebook Page

It is offending China, not war, that Pres. Duterte is avoiding – IBON

by IBON Media

Research group IBON said that Pres. Rodrigo Duterte’s stance on the West Philippine Sea (WPS) issue, as expressed in his fourth State of the Nation Address (SONA), is not about avoiding war with China, but is about avoiding offending the Chinese government and losing all its promised funds.

Last July 22, Pres. Duterte highlighted the possibility of China attacking the country if the government took a strong stance on its claims in the disputed WPS.

According to the president, “more and better results can be reached in the privacy of a conference room than in a squabble in public”.

IBON, however, said that the administration is only using the possibility of war to conceal the agreements reached “in the privacy of a conference room” between the Philippine and Chinese governments which seem to be at the expense of the Filipino people’s interests.

IBON noted that while other claimants to the disputed area, like Vietnam and Indonesia, are taking a more aggressive stance to defend their claims, China has yet to declare war against these two countries.

The group said that the administration should see this as an opportunity to foster unity between the Philippines and its other neighbors to defend their respective claims against China.

But the government is not doing this, nor is it asserting the July 2016 ruling of the international tribunal, the Permanent Court of Arbitration, that was in favor of the Philippines.

The decision upheld the country’s  rights over the 200-nautical miles exclusive economic zone (EEZ) under the United Nations Convention on the Law of the Sea (UNCLOS).

The President instead has claimed to be proud of his friendship with China, IBON said.

Rather than defend his fellowmen, he has insulted Filipino fishermen by implying that they should be thankful that Chinese Pres. Xi Jin Ping allowed them to fish in the WPS.

He also reduced the ramming and sinking of the Filipino fishing boat Gem-Ver 1 by a Chinese ship in June to “a mere incident”.

IBON said that the reason for the Duterte administration being overly accommodating is most likely due to its desire for Chinese financing.

IBON estimates that the government is seeking as much as Php673.2 billion from China for its 75 flagship projects aside from Php204.7 billion more for infrastructure and other projects – for a total of Php877.9 billion.

According to the group, the terms of the loan agreements that the administration enters into with China for its infrastructure drive are onerous.

These include only using China’s goods and services, including for payment of Chinese contractors and even hiring of Chinese workers; stringent loan payment schedules; contracts being explicitly governed and construed in accordance with the laws of China and disputes having to be settled in the courts of China; and the Philippines waiving its sovereign rights over its patrimonial assets in connection with any arbitration proceeding.

The last is synonymous with the collateralization of  the country’s assets, like natural and strategic resources.

IBON said that instead of being concerned with stepping on China’s toes and losing financing, the Duterte administration should implement a truly independent foreign policy.

Such a policy should defend and uphold Philippine sovereignty, ensure  domestic development, and prioritize the welfare of all Filipinos, said the group. #

Some more United People’s SONA 2019 shots

These are additional shots of the United People’s SONA last Monday, July 22, on Commonwealth Avenue, Quezon City.

They show the burning of President Rodrigo Duterte’s effigy as a merman (siyokoy) while members of the Concerned Artists of the Philippines perform their song “Atin ang ‘Pinas”.