Doing business with China

It is good that the Aquino government has changed its tune about doing business with China. For whatever reason, it makes sense to separate the South China sea dispute from doing business especially joint ventures to exploit oil and gas resources.

This has been the Deng Xiaoping formula all along. Let’s work together and let the next generation settle ownership. In other words the ownership dispute is put on the back burner while joint ventures are worked out in commercial terms with the pending ownership claim as a trump card for the Philippines. President Aquino said “so long as our sovereignty is respected, we can partner with them” is differently worded but it is the same formula.

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Not surprising that the bold move was inspired by Philex Petroleum Chairman Manny V. Pangilinan who knows good business sense when he sees one. I hope he is not swayed by opinions of the misguided who insist that the Philippines should forego economic opportunities for the country and threaten to go to war instead. I suppose this is also what the US means when it tells our leaders to settle it peacefully instead of warmongering.

Let’s wait and see what deal can be acceptable according to business terms with CNOOC and Philex. CNOCC is China’s biggest offshore oil and gas producer.

There is no dispute about making sure that the business deal is fair to both sides. In forging deals and agreements the overarching reality is to be aware that doing business has advantages for us.

According to a report “Service contract 72, which covers an area of 8,800 square kilometers west of Palawan, is estimated to have a prospective gas potential of 8.79 trillion cubic feet and 220 million barrels of oil. It has a contingent reserve of 2.6 trillion cubic feet of gas and 65 million barrels of oil. We would have our own source of oil.

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It would be foolish for the Philippines not to do business with China while other countries with similar claims do. These other countries in the region manage their regional policy astutely. They prefer to keep their good ties with China instead of insisting on a settlement of the claims at this time. This creates a hostile atmosphere. Our wise neighbors do not support calls to take a common stand on territorial disputes either.

It was not until Philex Petroleum took up the possibility of a joint project with CNOCC that a new tack was taken. “Some countries in the region worry that the Philippines may be rolling the dice with China and pulling the United States into territorial disputes,” Bower and Poling wrote. “Asean unity on the South China Sea remains uncertain.”

Once again, it is time to acknowledge that it was the Arroyo government that prepared the ground for the joint venture between China and the Philippines. It was Gloria Arroyo, who signed an agreement on joint seismic surveys in disputed waters between the Philippines, China and Vietnam. We must recognize that each government contributes building blocks that make up the Philippine house despite our style of acrimonious politics.

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Consider this. Just days ago both Denmark and the US signed investment contracts with China. The US-China contracts was said to be worth $3.4 billion.

Eighty-five companies from 21 Chinese cities and 20 US cities took part in the second US-China Cities Forum on Economic Cooperation and Investment. The forum was held in eastern China’s Jiangsu province.

To the skeptics who are against doing business with China pending the settlement of ownership in South China sea, here’s a good tip from Finance Minister Xie Xuren. “China and the US share different resource advantages, and strongly complement each other in economic development.”

 Xinhua reported in an interview with Xie that other areas of cooperation will be explored among them energy, environmental protection, biomedicine and infrastructure. China and the US’s bilateral trade currently stands at $446.6 billion.

Do you think that the US will jeopardize that bilateral trade by going to war with China to protect the Philippine claim? Ridiculous.

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After the visit of Chinese President Hu Jintao in Copenhagen the two countries signed deals worth billions of euros. The two countries will cooperate in the oil-rich Arctic.

This is the first time that a Chinese head of state has visited Denmark. They signed agreements on tariffs, environmental protection, cultural exchanges and agriculture.

”These are partnerships that have formed the basis for Danish companies to reach agreements with Chinese companies into the two-figure billions,” Danish Prime Minister Thorning-Schmidt said. Hu’s visit generated some 18 billion kroner (2.4 billion euros, $3.1 billion) in agreements.

Hu also took the opportunity to discuss with Thorning-Schmidt China’s bid for permanent observer status on the Arctic Council, an intergovernmental forum promoting cooperation among eight states, including Denmark, that border the mineral-rich region._

Once again, Filipino leaders can learn from the Danes. While concluding business deals, the talks also took up human rights.

Thorning-Schmidt said concerns about human rights in China remains. “No doubt we in Denmark and the European Union are concerned about human rights in China. This is something we discussed,” she said.

The Chinese leader also touched on Europe’s economic crisis. He will attend a meeting of G20 nations in Los Cabos, Mexico.

The debt crisis in Europe impacts heavily on China since it is its largest export market.

The recent economic deals forged by China with the US and Denmark are examples of what the Philippines should be about and do regardless of the South China sea dispute.

We should adopt a more mature approach to geopolitics and its problems. We can do business with China just as the Americans and the Danish did.

But when we prepare for “war” and say nasty things in our newspapers about the Chinese, we accomplish nothing except to sound like brats. Chinese businessmen read newspapers, you know, and have said that they do not feel comfortable doing business in a place where they are not wanted. Why should China want to do business with the Philippines when it doesn’t want to. Why is selling newspapers compared to the country’s economic needs?