Attending the China Daily Asia Leadership Roundtable at the Asian Institute of Management in Makati City last Oct. 27 was very insightful. The talk sponsored by the top English-language newspaper in China had very informative and analytical speakers.
I was impressed with the lecture of Prof. Federico Macaranas, former chairman of the AIM Department of Economics, for his observation on Philippine economy becoming complex because exports are also getting complex with scientists getting more involved in such good as hybrid rice.
Another interesting speaker was Jose Luis U. Yulo, Jr., president of the Chamber of Commerce of the Philippine Islands, the oldest business group in the country founded by Queen Maria Cristina of Spain in 1886.
Through figures, Yulo explained how China overtook the Philippines in terms of per capita income or the average income earned by a person or citizen. In the 1980s, Filipinos were six times richer than China with a PCI of $1,886 to the Chinese’s $310. After 20 years, China narrowed the gap with a PCI of $2,918 to the Philippines’ $3,390; the Filipinos were then only 1.2 times richer than the Chinese.
By 2010, China overtook the Philippines with its PCI of $9,252 to the Philippines’ $5,550. The Chinese became 1.6 times richer than Filipinos.
This year, Yulo said China double the lead at $14,600 against $7,700.
Yulo mentioned two reasons how the Chinese became richer than us. First, China joined the World Trade Organization in 2001.
The second reason was China’s switch from a purely communist-style economy to a Chinese-style capitalism and free trade, which Yulo defined as not 100 percent capitalism and not 100 percent free trade.
In a moderated tone, Yulo expressed disgust over the Philippines’ economic decline for sticking to the western-style capitalism.
“The Philippines followed the western medicine and the figures show what happened. I would like to say our government was stupid and so were we,” said Yulo.
Another interesting insight from Yulo is his espousal of a moderated relationship with China in tourism, trade and investment.
With 1 percent of the Philippine population visiting China as tourists, Yulo said the Philippines cannot expect China to reciprocate in the same number as 1 percent of its population is equivalent to 13 million Chinese. Yulo said Philippine airports cannot handle that much tourists.
Yulo also said there should be moderated tourism with China with quality Chinese tourists preferred more than the rowdy, noisy and misbehaving ones.
Yulo said the amount of investments by Chinese businessmen is $1.5 billion with only business tycoons Henry Sy and Lucio Tan as the only Filipinos with serious investments in China. But Yulo said there should be moderated Chinese investments in the Philippines.
“If the Philippines feels that the food industry is overcrowded by Filipinos, then it is foolhardy for a Chinese food company to come and take away Filipino companies and food; it will create tension,” he said.
Trade must be moderated, Yulo also said. He explained that the Philippines should not engage in free trade but in free fair trade as what China practices.
Meanwhile, Yulo said the Philippines can help China develop it’s leader’s new economic principle: a modern socialism with Chinese characteristics. This new ideology, according to Yulo, combines the best traits of capitalism, communism, socialism, nationalism and globalism.
Yulo believes that teaming up with rising China will allow the country to reduce its poverty rate. He said 21 percent of our population is living below poverty level to China’s only 4 percent.