You are here

Xi's Manila visit expected to yield deals worth billions

BT_20181121_CHVISIT21_3623116.jpg
Dozens of agreements will be signed on everything from infrastructure to trade to security, say Philippine officials.

Manila

XI JINPING is expected to seal billions of dollars worth of deals during a trip to Manila that started on Tuesday as Philippine President Rodrigo Duterte's administration shrugs off US warnings about accepting Chinese cash.

Mr Xi's two-day trip marks the first state visit to the Philippines by a Chinese president in 13 years. Philippine officials say dozens of agreements will be signed on everything from infrastructure to trade to security, building on US$24 billion in investment pledges made two years ago when Mr Duterte visited Beijing.

The visit reflects warmer ties that began when Mr Duterte took office and pivoted towards China and away from the US, a long-standing defence ally.

sentifi.com

Market voices on:

Since then, the Asian nations have made progress on reaching an agreement to jointly explore for energy in a disputed part of the South China Sea, an issue that roiled ties between Beijing and Mr Duterte's predecessor.

"Given the profound and complex changes in the world, good-neighbourliness and friendship is the only right choice for China and the Philippines," Mr Xi said in his statement upon arrival in Manila shortly before noon.

Mr Xi's trip is taking on even greater significance given it comes shortly after the Asia-Pacific Economic Cooperation summit ended without a joint statement for the first time due to simmering US-China trade tensions. Vice-President Mike Pence attacked China at Apec, calling on member states to avoid loans that will leave them indebted to Beijing.

"We must take his statement with a grain of salt - of course the US would not want the whole world to be dependent on China," Philippine Budget Secretary Benjamin Diokno said at a forum in Manila on Monday. Mr Pence's statements don't apply to Mr Duterte's government, which has a "rigorous process" to evaluate funding from Beijing, he said.

Much of the money that China has previously pledged has yet to come through. Few projects in the first batch of US$24 billion have gotten off the ground, including a previous US$780 million proposal to raise three islands from a water-logged area of Mr Duterte's hometown, which was cancelled last year after being found not commercially viable.

Chinese bureaucracy is having difficulty complying with requirements for projects in the island nation, Mr Diokno said. "I think with this visit, the projects will speed up," he said. "We're very optimistic that this will put pressure on their bureaucracy to speed up the process."

The slow pace has been criticised by Mr Duterte's political opponents. Senate Minority Leader Franklin Drilon said the Philippine leader had adopted "a policy of appeasement" towards China and he hoped the loan deals wouldn't be a case of "broken promises." BLOOMBERG