BEYOND SIGHT: Quo vadis China?

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By Monsi A. Serrano

Like it or not, this COVID19 dubbed as #WuhanVirus, #ChinaVirus or #CCPVirus has disrupted the whole world in a magnitude beyond imagination. While I was not born yet when both World Wars I and II happened, from my grandparents’ and parents’ accounts, these wars brought several countries down to their knees.

No matter how much China denies it, the #CCPVirus originated from them and several studies showed that the COVID19 is a synthetic virus. What China did is they even made it appear that the virus came from bats being sold at the seafood market in Wuhan, Central China’s Hubei province.

But independent investigations conducted by various groups who are not controlled by China yielded that there were not bats being sold at the Wuhan seafood market.

Watch related video from The Epoch Times:

 

During the early outbreak of the CCP Virus in Wuhan, China, a Japanese friend who is like a father to me and has been living and doing business in the Philippines for more than 30 years, told me last February 6 that during the outbreak, there were already several Japanese companies that declared bankruptcy and closed their business in China. Mind you, that was more than two months ago.

What is interesting to note is the fact that my Japanese friend already sees an opportunity in this crisis not for him but for the Philippines! But any opportunity when not seen as such would be wasted. So since that meeting we had last February 6, there were subsequent meetings and exchanges of emails to plan to seize the opportunity for the Philippines.

Crisis in the eyes of the Japanese

Many people do not look beyond the crisis, hence, they become a victim of analysis-paralysis. But for my Japanese friend, even the cases of CCPVirus were not that much yet, he amazingly discussed with me what can we do together to prepare for the Philippines and bring the lost opportunity to China to the Philippines.

So I am asked to prepare business plans for various business concepts that he had on the top of his mind. Together with his son, who is like a brother to me, we have all been planning out and throwing ideas through emails and other available technology, do our SWOT analyses for each business model in order to come up with a well-developed business model that would draw interests from the prospective Japanese investors.

While there are opportunities in the crisis, there is also a threat and this is what I personally see. The open-door policy and preferential treatment to China of the current Duterte administration would likely be deemed as a threat by the Japanese. Unknown to many, after the post-war era, a strong anti-Japanese sentiment happened in 2012 in most Chinese major cities in China, Japanese-owned businesses were smashed. Needless to say, there were even some reports that people who were using Japanese products were attacked in the public.

For me, this inevitably posits a Cold War between Japan and China. But knowing how respectful and non-confrontational Japanese people are after World War II, the hostilities that happened to them in China, back before and with this CCP Virus pandemic would really pave way for more opportunities for the Philippines.

China against the world

While China has been denying that the COVID19 is part of their plan to seize political and economic power in the world, many country leaders believe that theory. Observers claimed that if other key cities in the world are hit with such great magnitude, why China’s Beijing and Shanghai are not that badly hit?

With many other circumstantial pieces of evidence related to the involvement of China in propagating the virus across the world, many did not take it sitting down given the fact that the CCP virus has a significant impact on the global economy.

Already, Japan Prime Minister Shinzo Abe’s gambit of taking a bold and drastic move to give incentives for Japanese companies to leave China and return to Japan. This sends a clear message to China, that these countries are not dumb not to believe in their conspiracy theory perpetuated by the China Communist Party. With Japan’s move, all other countries follow suit. Thus, the US, UK, Australia are set to abandon their trade relationship with China and pull out of all manufacturing companies from China. Given this move, it is likely that the European Union composed of 27 member states would take the same step.

China’s loss could be the Philippines’ gain

Depending on how fast our policymakers will act on this, it would be best for us to prepare for these opportunities by adding bells and whistles which our other ASEAN neighbors do not have. Realistically speaking, we can no longer brag about our excellent English communication skills given the fact that the advent of AI (Artificial Intelligence) can easily replicate this and even do more.

But perhaps to my mind, we can also boast of our recreational facilities and tourist spots which they can enjoy that would not cost them an arm and a leg, Filipino work ethic, honesty and culture of trustworthiness.

In my humble opinion, one of the many reasons why many foreign investors shun away from us despite our increase in the ranks of Ease of Doing Business is the reality happening on the ground. For instance, the SOP (Standard Operating Procedures) the term they use for grease money being given to the various signatories of a document when applying for business permits. This is still very prevalent in the local government and even in the Barangay. While Anti-Red Tape Authority is already there, they still have yet to prove their seriousness in prosecuting the complaints passed on them.

Our ASEAN neighbors are very aggressive and successful in attracting foreign investors by providing tax incentives, the government supports like a long lease and discounted rate of property for industrial sectors, some free land lease via BOT (Build Operate and Transfer), subsidy and zero labor strikes. Why did Intel leave the Philippines, and move to Vietnam its ever biggest facility in the world? Because Vietnam offered a better deal.

Now, with a new normal and a need to resuscitate our economy, it is just proper for our government officials and economic managers to review their policies and work with lawmakers to amend the economic provisions in our constitutions, especially on the amendments of the Retail Trade Liberalization Act Law 2000 which remains a big turn off to would-be foreign investors.

Realistically speaking and based on the feedback given by my Japanese friends who are also looking for Japanese investors to come to the Philippines, the capital requirement stipulated by our current Retail Trade Liberalization Act Law which is US$2.5 million paid-up capital plus a minimum investment of 830,000 US dollars per retail store is not also impractical but too risky. Unlike our ASEAN neighbors which have a much lower capital requirement and certainly attractive to other foreign investors. Having said this, perhaps right now, our ASEAN neighbors are all working in the drawing board now and thinking about how to get a big chunk of the pie to enticing those companies owned from other countries to invest in their respective countries.

Chinese contingents wave the China flags along 4th Avenue BGC in front of the World Plaza Building during the State Visit of Chinese Prime Minister Xi Jinping last November 21, 2018 (Photo file/THEPHILBIZNEWS)

What our government needs to do

Just like in the corporate world, there is what you called Corporate Planning and Evaluation. With the Social Amelioration Program and other helps extended by the government to the Filipino people in the midst of the COVID19 pandemic, if the government will not manage the crisis with a sound and balanced calibrated response, the coffer will bleed and many companies are bound to close down.

The critical issue now that needs immediate attention is how fast the government can prepare its action plan and prepare for the inevitable, which is to jumpstart our economy. It is a global economic survival that is a big issue that all the developing countries like the Philippines ought to address while China has earned the wrath of the world, this provides us a lot of opportunities to welcome those companies pulling out from China in our homeland.

But before we can successfully do that, we have to do “silo-busting” within the cabinet officials of Duterte. What makes their action plans incoherent and poorly executed is the palpable silos they painstakingly built around them. They need to consult other stakeholders, conduct a survey, deliberate, make a clear deadline and when they do this, we can easily go back on our feet, and take off the ground once again and fly high.

So the question is no longer Quo vadis China? Because in the reason for the survival of our country and compatriots, this should not matter anymore, but rather, Ubi sunt? Quo vadis Pilipinas? And the answer is, “Ubi panis, ibi Patria”. (Where there is bread, there is my country!)

As the late US President Lyndon B. Johnson said and I quote, “We must open the doors of opportunity. But we must also equip our people to walk through those doors.”

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