The Philippines is likely to become the fulcrum that would help improve relations between the United States and China as the two superpowers are expected to make a major push in Asia in the post-Donald Trump era.
“I think this is going to be a ‘Philippine period’ in the next decade,” Yukon Huang, Senior Associate in the Carnegie Endowment in Washington, D. C., said during a recent “webinar” that analyzed US President-elect Joe Biden’s future in the US-China-Philippines relations.
Huang was also the World Bank’s former Country Director for China.
The political and economic analyst said Biden is coming “at a time when he wants to form a stronger alliance with Asia and Southeast Asia.”
“Biden sees the Association of Southeast Asian Nations (ASEAN) as an important coalition of countries. You also will see the Philippines has a potentially major role to play, economically speaking.”
Biden is set to be inaugurated as the 46th US President on 20 January 2021.
Invited by Ever Bilena CEO Dioceldo Sy to join the online discussion, Huang’s prognosis for the Philippines is bright, saying Vietnam’s capacity “is more or less used up, and the next logical place to build a capacity in East Asia — to diversify, is the Philippines.”
“So, I think you will find yourself politically and economically getting more attention from the Biden administration than you got from the Trump administration.”
The Philippines, he said, is also seen to become a central player in the South China Sea conundrum that has China, the ASEAN-member nations and even the US as interested parties.
“Problems cannot be resolved without the Philippines playing a major role of what I call ‘key position in a discussion,’” Huang stated.
Huang views China as keenly interested in reducing tension with the United States “(and) it has to realize (that) to do that, it has to improve relations with its neighboring countries. And I think the Philippines has a major role in that respect.”
China and the United States are also engaged in a trade war, but Huang maintains that the US must not cease trading with China.
“China is the number one trading partner of 124 countries, it is the second-largest source of trade. If the US closes its trade with China, it will not survive,” he said.
Asked about the US attempt to block China’s technology, Huang said: “If every country tries to be self-sufficient, no one will become successful. Trying to be closed is stagnation.”
He mentioned a study by the International Monetary Fund (IMF) showed that “if you decouple with China, in the short term China suffers. (But) in 10 years, the US suffers more — it’s growth, cut in half.”
“The top 10 US companies depend on China. When the US can’t sell or invest in China, US tech can’t grow. The United States can grow only on innovation,” Huang added.
Huang, author of “Cracking the China Conundrum: Why Conventional Economic Wisdom Is Wrong,” was asked whether Biden would accept China’s technological and economic rise. He replied: “It is not economic, but an existential issue that threatens their way of life.”
“Ten years ago, China did not seem to threaten them. But they see the ‘Belt and Road’ as a strategic threat. If you want to talk to the Chinese, you have to deal with this perception common in the West.”
Huang, a doctor in economics from Princeton University who has a B.A. from Yale University, said: “Biden would be a bit more realist. But you have to solve this problem of capacity at home to compete with China. How to solve that perception? You can’t unless you build goodwill to be seen as a positive force.”
George Siy, a Wharton-educated Filipino industrialist, said: “We have lots of things to learn from both China and the United States. They are still the biggest economies. They are providers of finance, market, and technology.”
A director of the Manila-based think-tank Integrated Development Studies Institute (IDSI), Siy added that the Philippines is potentially complementary with the US “and if we want to capitalize on this, we must get ideas from global experts and advisers with practical and proven track records of success.”
“China is right beside us, and ASEAN is growing. We must build our internal capacity, we have to study the financial condition here, and whether we’re doing it correctly. Study the ‘Build, Build, Build.’ Maybe the volume is not enough for the country.”
He added the US is providing the Philippines the BPO business, which employs 1.2 million Filipinos. “But we have to move up, not spend 8 to 10 hours on FB (Facebook) and social media, according to recent surveys.”
The analyst also quoted Ambassador Alberto Encomienda, a foremost expert in maritime and ocean affairs, who said that the South China Sea has always been a common area for fishermen where friendships were formed until people started putting borders.
“We have to look at how we can benefit even amid disputes, we cannot allow disputes to define our relationship entirely,” Siy stated.