Himfr.com Reports China to become 2nd largest trade partner of Philippines as recovery takes hold

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Despite the slump during the global economic crisis, trade between China and the Philippines will takeoff again and China is even expected to overtake Japan as the Philippines' second largest trading partner in the near future, officials said.

After growing more than 30 percent annually for seven years since 2000, bilateral trade dropped by 6.7 percent for the year of2008 to 28.28 billion U.S. dollars, Chinese customs statistics show.

The decline widened in 2009 as in the first seven months trade income dived 43.6 percent year-on-year to 10.4 billion U.S. dollars, the steepest decline among Southeast Asian countries trading with China.

"The growth of China-Philippines trade was robust in the past. I think as the global recovery takes hold, our bilateral trade will regain its vigor," Chinese Ambassador to the Philippines Liu Jianchao told Xinhua on the eve of the establishment of the China-ASEAN (the Association of Southeast Asian Nations) free trade area on Jan. 1, 2010.

Complimentarity exists in the two countries' economies and there is room for growth, Liu said, for example, China expects more imports of
agricultural, mining and aquatic products from the Philippines.

Data from the Chinese Embassy show that around 80 percent of Philippine merchandise exports to China at the moment are electronic parts. Officials expect a more diversified product mix for trade as the China-ASEAN free trade agreement (FTA) takes effect. Under the agreement, duties of more than 7,000 trading items will be reduced to zero by Jan. 1, 2010.

"In the next five years, the growth rate of bilateral trade will double or triple at the trend we are engaging with China," said Amador Pablo, senior trade specialist of the Department of Trade and Industry of the Philippines.

Pablo told Xinhua over phone that China has been the Philippines' third largest trading partner since 2005 and is expected to become the No. 2 as the Philippines has yet fully developed the Chinese market.

Separately, Philippine Central Bank Governor Amando Tetangco, a key economic manager of the Arroyo administration, said the government fully supports efforts to increase trade and investment with China, especially now when Asia is leading the world out of recession.

Since the outbreak of the economic meltdown late last year, Asian officials have pledged to expand cooperation to reduce the region's export-dependence on Western consumers.

According to the official data, China is currently the largest trading partner of Vietnam and the second largest partner of Thailand, Singapore and Myanmar.

"So you will see in the near future, China will become a bigger trading partner not only of the Philippines but also of other ASEAN countries," Tetangco said.

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