China 101

ariel-nepmucenoWHEN it comes to China, the views that people have about it and the emotions they feel for it are mixed, even contradictory. It is practically inevitable that China would become a global leader and a very strong rival of the only remaining superpower in the world, the United States. It’s in our best interest to carefully define the framework of our relationship with Beijing.

The current territorial dispute between the Philippines and China, which was triggered by conflicting claims to several islands in the West Philippine Sea (South China Sea), is of utmost importance. The economic and political value of these islands is definitely significant. This dispute, however, must not hinder us from seeking a stronger relationship with China. In fact, it is even urgent that we build closer ties with our giant neighbor, so that this dispute can be resolved. This can be achieved without necessarily betraying our decades-old alliance with the US.

Washington would even appreciate it if the Philippines would not be like Cuba in the 1960s, when Russia and the US were on the verge of a nuclear war. On the contrary, a healthier relationship between the Philippines and China would even help the US in maintaining a stable balance of power in Southeast Asia.

Thus, we must first improve our understanding of the intricacies of China’s communist government and its centuries-old society. Its history—more than 4,000 years of it—testifies to the resilience and greatness of more than a billion people, who, like us and other Asians, cherish virtually the same conservative values, particularly of family and kinship. The traditional role of elders in business, politics, culture and even religion is still deeply ingrained in our societies.

Huge, but diverse

CHINA’S population of more than a billion people may be politically managed or controlled by a strong, single entity—the Chinese Communist Party—but its society is divided in terms of language, industries, geography and market segments. Outsiders often mistakenly assume that there is a homogenous group of 1 billion people who can instantly become one massive market for their products and services. While the Communist Party can efficiently communicate with their people through its existing political channels, corporations must express their messages through various strategies that would consider the differences found among the Chinese consumers.

The centers of progress are also thriving in different areas. Foremost among these is that of Beijing, the seat of the Chinese government. The population in this area, which is sometimes referred to as the Bohai Sea region, is at least 25 million. Another center is the old commercial area of Shanghai, in the famous Yangtze River region, which has a population of at least 80 million. And last, but definitely not the least, is the southern region along the Pearl River Delta, which boasts of the industrial provinces of Shenzen, Guanzhou, and Fujian, where our Chinese-Filipino taipans came from. We can include Hong Kong in this area of almost 50 million people.

At present, millions of rural Chinese are migrating to their country’s megacities for employment opportunities and to have a piece of the recent unprecedented growth of their economy. This phenomenon, in effect, divides their society into two: the distinct urban sector, to which at least 150 people belong; and the agricultural province, where hundreds of millions of Chinese still live.

Modern and international orientation

INSIDE China, the financial system has undergone a dynamic transformation in the last 20 years. This has enhanced the capability of huge and midrange Chinese corporations to become global players. Also, the Chinese government has also effectively managed its publicly owned companies in their aggressive expansion to the international market.

Chinese manufacturing firms, like Huawei Technologies Co. Ltd. and Lenovo Group Ltd., which produce computers and communication devices; BYD Co., which manufactures universal joints; Haier Group, the fourth-biggest appliance producer in the world; and mobile-phone maker China Mobile Communications Corp., have won strong international acceptance.

Chinese oil companies, such as the China National Offshore Oil Corp., Sinopec Ltd. and PetroChina Co. Ltd., are also slowly dominating regional markets in many parts of the globe. Big Chinese construction firms, including China State and Construction Engineering Corp. and China Railway Construction Corp., are building multibillion-dollar infrastructure projects around the world.

Recently, China spearheaded the launch of the Asian Infrastructure Investment Bank, to which it contributed a capital of $50 billion. We can expect this institution to be instrumental in expanding the economic, and even political, clout of Beijing.

Long-term interest

WE must examine the finer details of our short-term decisions that would influence our long-term relationship with China. We cannot avoid the reality that, in our region, Beijing will continue to exercise a different brand of leadership patterned after the modernizing leadership of Deng Xiaoping in the late 1970s to the early 1990s and Jiang Zemin in the early 1990s to the early 2000s. China has already regained full confidence in its economic prowess and influence.

President Aquino has already expressed the need to more openly pursue closer ties with Beijing during the recent Asia-Pacific Economic Cooperation summit. Let’s set aside first the issues that divide us. To move forward, let’s first capitalize on the programs that would mutually benefit our countries.

Probably, the common friends of Beijing and Manila could assist us toward this goal.


Ariel Nepomuceno is the deputy commissioner for the enforcement group of the Bureau of Customs.


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