The past 15 years of cooperative relations between ASEAN and China have helped build mutual trust and confidence between the Philippines and China. The 2002 Declaration of Conduct of Parties in the South China Sea between ASEAN and China encouraged the national oil companies of Viet Nam, China and the Philippines to launch a “joint marine seismic undertaking” that could provide a formula for other cooperative activities in the South China Sea, pending the conclusion of a regional code of conduct and the resolution of conflicting claims in the area. As can be seen, because of the constructive role of China in the ASEAN+1 relationship, the Philippines and China have taken concrete steps to turn the South China Sea from a potential flashpoint in the region into an area of cooperation and development.

On the economic front, both sides are building the blocks of an ASEAN-China Free Trade Area. Tariffs on goods are being reduced or eliminated. Both sides hope to conclude soon negotiations on services and investments. Because both ASEAN members and China have their own respective economic strengths, the free trade area will bring greater economic rewards to the individual countries under it and the entire region. With the region as their market, we also hope that businesses and investments outside the region will be drawn to the free trade area.

Economic development is a win-win equation for all. Both ASEAN and China benefit from this relationship. Philippines-China bilateral trade has increased from $3.1 billion in 2000 to $17.6 billion in 2005. We hope to see more investments from China in the region and in the Philippines as well.

What are the key areas of cooperation between the two countries?

Since the two countries signed the joint communique establishing diplomatic relations in 1975, agreements in the areas of trade, investments, finance, agriculture, mining, air services, postal parcels, tourism, culture, sports, youth exchanges, media and information, judicial cooperation, defense, maritime cooperation and combating transnational crime have been concluded. Cooperation in these fields over the past three decades mutually benefited the development of both countries and the well-being of our peoples. This is of course boosted by the excellent relationship between our leaders.

On specific fields of cooperation, I am extremely pleased at the increasing bilateral trade between our two countries. In the first eight months of 2006, bilateral trade amounted to $14.2 billion, increasing 30.9 percent over the same period in the previous year. Based on this trend, we are optimistic that the target of increasing bilateral trade to $30 billion by 2010 will be achieved earlier.

Tourism is also another promising area of cooperation. While tourist travel to the Philippines is currently less than to some of our ASEAN partners, China is our fastest growing market. The number of Chinese tourists who visited the Philippines was 107,456 in 2005, a 300 percent increase from the number of arrivals in 2004. In the first eight months of 2006, tourist arrivals from China numbered 86,543, a 35 percent increase over the same period in the previous year.

In the past five years, China’s economic growth has enabled it to become an active development partner of the Philippines. It has extended valuable assistance in the development of Philippine agriculture through the establishment of the Philippine-Sino Center for Agricultural Technology in 2003, continued exchanges in hybrid rice and corn technology and a farm mechanization program. China is also helping the Philippines establish a railroad that will connect Kalookan in metropolitan Manila to Clark. The project will help develop the Clark Special Economic Zone as a regional service and logistics hub.

On the other side of the coin, the favorable investment climate in China has attracted Filipino entrepreneurs to invest in China. Philippine companies are engaged in food processing, banking, real estate and mall development in various areas of China. Last year, Philippine investment in China amounted to $189 million, which is currently more than Chinese investments in the Philippines. However, business people are currently forging long-term partnerships in mining, infrastructure, housing construction, fishery, energy and health, among other sectors.

China and the Philippines are both developing countries. As they seek development, what opportunities will they offer each other?

As developing countries, both can benefit from each other’s development by investing in each other’s development projects, and in sharing expertise and experience. Both countries want their people to benefit the most from development.

For the Philippines, President Arroyo is pursuing a “10-point agenda” to achieve sustainable economic growth for the Philippines and Filipinos, which involves fiscal discipline, job creation and empowerment of the regions. This is the same as China’s goal of building a well-off and harmonious society.

There are many areas of complementarity that both sides can explore. For example, China may be interested in the Philippine Government’s program to spread progress to all areas of the country through the so-called mega-region economic development strategy. Tremendous business opportunities will accrue following the development of the North Luzon Agribusiness Quadrangle, the upgrading and construction of airports, seaports and infrastructure and irrigation projects.