China, the Philippine’s current biggest trading partner is facing economic and political woes. Perhaps it is high time President Rodrigo Duterte rethinks the Philippines’ alliances and strategies with its neighbors and allies. While China is still the second biggest economy in the world, it could not downplay the economic and political pressure it faces. Trouble is brewing. A few days ago, China lost its trade dispute with the European Union. European Union, one of the biggest trading partner of China will not anymore treat China as a free market economy, which means higher tariffs will be imposed on Chinese goods entering the EU.
The World Trade Organization has ruled in favor of the EU on its trade dispute with China. The member countries of the EU have sanctioned China and made a strong stand that EU can not anymore treat China as a trading partner on equal footing because Chinese exporters are being subsidized by the China government. This practice of China according to the EU tends to undercut foreign prices thereby ensuring Chinese products enter the EU market much cheaper than other foreign products.
China has not appealed to the World Trade Organization on the ruling and is not likely to do so.
Meanwhile China is pushing its southern province of Hainan to be another global business hub comparable to the Shanghai Free Trade port reportedly having 35,000 new foreign locators in five years time when it opened.
However, analysts say Hainan won’t be another Shanghai, at least from the way things are going on. China has to balance its economic and political fulcrum. Because of China’s military presence in the South China Sea, the west now considers China not only an economic threat but a political bully. They say China does not share the ideals of the West. The west puts importance on an individual’s high degree of autonomy, human rights, political freedom and fair play.
Fair play was the bone of contention when U.S. President Donald Trump accused China of not playing fair. Trump accused China of espionage, intellectual property theft and unfair trade which runs into trillions of dollars through the years.
Even before the coronavirus global pandemic, a number of international companies have been divesting and removing their supply chain away from China.
Meanwhile, Beijing’s new policy on Hong Kong, the former colony of Great Britain/ United Kingdom has been under attack from all fronts. Britain’s Prime Minister Boris Johnson said his government is willing to give visas to the estimated 2.9 million Hong Kong citizens/residents if necessary. Hong Kong may lose its status as a financial and trading hub in Southeast Asia if Beijing continues to treat Hong Kong just as it treats the whole of China, no political and economic autonomy.