Chinese mogul to invest up to $4B in RP

China’s second richest man has decided to invest between $2 billion to $4 billion in the Philippines, primarily to develop high-end hotels and residential properties.

Trade Secretary Peter Favila said an agreement between the Shimao Group of China and the Bases Conversion Development Authority (BCDA) would be signed today to pave the way for the multi-billion dollar investment.

Shimao Group chairman Xu Rongmao, who is listed by Forbes Magazine as the second richest man in China for 2006, personally met with President Arroyo last Tuesday night during which he announced his decision to invest in the country.

Favila revealed that the investment would go into the BCDA properties in Fort Bonifacio in Taguig, including the 35.5-hectare Jusmag property.

The group is also in the process of exploring sites in Palawan for an investment into the tourism sector.

He pointed out that a team of the Shimao Group came over to the country last February to look at the possibility of making an investment.

"We met with them. We suggested that now that they have seen what the country has to offer, maybe they should go around and ask the private sector for them to have a good feel of what is in store in the Philippines," Favila said.

During Tuesday’s night meeting, Xu informed the President and Favila that he sees a huge market in the Philippines in terms of hotels.

In the Association of Southeast Asian Nations where Chinese tourist arrivals registered at around 10 million, the Philippines hosted only 300,000 of the figure so Favila argued that there is still a huge potential to develop the market.

For Palawan, Mr. Xu said that he is looking at San Vicente where he intends to develop an airstrip.

Malacanang assured Mr. Xu that he has the go signal to develop whatever infrastructure he thinks is needed for his investment.

Under the agreement, the BCDA will be a  lessor and according to Favila, the government is willing to provide the Shimao Group the longest term possible.

Mr. Xu also asked about the foreign ownership issue in the country to which Favila pointed out that it is one of the proposed amendments as far as the economic provisions in constitution are concerned.

The Shimao Group is one of the biggest real estate developers in China, whose stock is listed in Hongkong.

Favila noted that the Shimao Group owns three listed companies namely the Shimao Property  Hongkong, Shimao Stock, Shanghai and the Shimao International Off-shore in Hongkong.

The firm is involved in the development of high-end residiental and commercial properties and five-star hotels.

It owns hotels in Australia, Russia, China and other countries in Southeast Asia.

Mr. Xu told Favila that the floor area of its development in the country would be around 10 million square meters.

Meanwhile, the RockCheck Steel Group Co. Ltd. of China has also expressed its intention to  invest an initial $200-million for the construction of a ferro nickel plant in Eastern Samar.

The company’s chairman Zhang Xiangqing informed the President of his company’s plan to set up the modern nickel plant at the Hinatuan Mining Corporation (HMC) plant site in Manicani, Guiuan, Eastern Samar.

"I am determined to bring more investments here in the Philippines. Filipinos are very hardworking, kind and good. I am impressed with your very good government, with your great leadership, it’s very democratic and very hospitable," Zhang told the President during his courtesy call in Malacañang yesterday.

Rockcheck Steel Group, one of China’s top 100 corporations, has a combined steel production of 3.5 million tons with annual sales last year reaching more than 22 billion yuan or $300 billion.

The firm has a total property worth 5.5 billion yuan or $ 700 million and more than 7,000 employees.

Rockcheck Steel has signed an agreement with Fulim Mining and Export Corporation, the exclusive marketing arm of HMC in China, to set up the modern ferro nickel plant at the HMC mining site in Manicani.

Construction will commence on the third quarter of this year and when fully operational, the new plant will employ at least 5,000 local residents.