Made in China

Last week, the sky seemed unusually clear in Beijing. I thought it was impressive that the Chinese government could even order the pollution to go away.

When my airconless cab pulled over the China World Summit where PwC China reserved a room for me on the 68th Floor, I was unmindful until then that I did not have enough renminbi (RMB) to pay the fare.

My cab driver didn’t speak any English. When I showed a US dollar bill, he grabbed his mobile phone. I thought that before he called anyone, I’d better call the hotel doorman to rescue me. The Chinese doorman spoke English, saying he would take care of the problem. He pulled out his mobile phone and aligned it with the driver’s mobile phone that displayed a QR payment code. Cash was transferred, and the techy taxi driver and hotel doorman just made me look like a dinosaur.

Fact is, the government in China gives much value to technology. You probably heard how the government supported online retail giant Alibaba to help it succeed and dominate. I heard a similar anecdote, this time directly from the founder of a Beijing startup called Unique Way. He created an app that tailors itineraries and activities for Chinese tourists. He said he asked the Chinese government for a three-million RMB grant, and got it.

The Chinese government is so entrepreneurial, especially under Premier Xi Jinping, but the main thing that remains communist in China is the lack of freedom of expression. In the words of a Chinese entrepreneur, “mouth should be zipped”.

Chinese nationals don’t have access to Facebook, Google, or a free press. But they say they are economically happy enough that they can’t be bothered with whatever freedoms they don’t have.

It’s easy to understand, explained a Chinese television producer who survived as a teen during the closed door era under Mao Tse Tung. He said back then, those who worked so productively could still go hungry because his produce was shared equally with those who produced nothing. He said he himself then ate only the same vegetable for a span of 11 weeks because there was no other food available.

Their family then even gave up the steel window grills of their house so they can melt it and convert it into a ship propeller for common use. (Because of poor method though, the propeller easily broke after a few rotations, so their window grills were given up for no useful purpose. But they thought that was what they had to do because that was what everybody did.)

When China opened up and embraced the merits of capitalism, rewards went to those who earned them. Personal incentives instead of equal incentive to all in the past made prosperity happen for many, and many began to buy luxury and signature goods once they could afford to celebrate economic success and freedom.

From China, the giant that suffered from starving slumber, to China, the biggest economy and biggest creditor of the US, one thing remained constant – it’s still the same China that’s hungry for so much more.

It is now such a global economic might that it ignores the international arbitral ruling in favor of the Philippines. It will continue to occupy and exploit Philippine territory, whether we protest or not. They are kinder when we don’t protest, and they can hurt us if we vigorously do. Case in point is their spat with South Korea, which militarily collaborated with the US. Korean telenovelas were banned from Chinese television, but then the Chinese tourists also stopped going to South Korea, turning the tourist island of Jeju into a ghost town.

The Philippines now exports more than $6 billion worth of goods annually to China. Chinese tourists recorded about a million arrivals. Hundreds of millions of RMB in development assistance have been given by the Chinese government to the country, and Chinese factories could potentially set up here.

They are, however, not enough compensation for our territory in the West Philippine Sea – the mineral deposits and natural gas there, the priceless marine life and environment, and a nation’s right to fish unhindered in our own waters.

What of the fact that we will not acquire the military capacity to stand up to China? This brings to light how important partnerships really are. The partnership with China is very complex and double edged. No other country is trying to take our territory. Indeed, small or not, we should still get stronger, financially and militarily. But partnerships with the US, the EU and the United Nations, if harnessed and taken care of, will prove invaluable, and in the future pivotal to a small country like us.

Rights, especially those globally recognized, should always be asserted, not only in words but also by ownership acts, no matter how incomplete. In the meantime, astute diplomacy should be persistent, constant and patient. We can continue to enjoy our Peking duck dinners in Beijing, but we should also continuously plot not to be sitting ducks. Almost all things are made in China. Philippine heritage is not.

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Alexander B. Cabrera is the chairman and senior partner of Isla Lipana & Co./PwC Philippines. He is the Chairman of the Tax Committee, and the Vice Chairman of EMERGE (Educated Marginalized Entrepreneurs Resource Generation) program, of the Management Association of the Philippines (MAP). Email your comments and questions to [email protected]. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.