A cargo ship docks at Qinzhou Port in China-ASEAN Free Trade Area in Qinzhou, Guangxi Zhuang autonomous region, on July 11, 2020. [Photo/Xinhua]

China's new five-year development plan which aims to advance high-quality development and improve people's quality of life promises to lift China-Philippines economic ties. Economic relations between the two countries have seen a steady growth in recent years following the forging of a comprehensive strategic cooperation in November 2018. The level of economic ties where China has become the Philippines' major trading partner and a top investor is a stable foundation for boosting the relations under Beijing's five-year development plan.

As the world's second-largest economy, China is steaming ahead in global recovery amid the COVID-19 pandemic and its array of policy initiatives in consumption, environmental protection, market reform and opening up will usher in new opportunities for businesses and products from around the world including the Philippines. The bright spot is that the development plan will plug international trade in the Asia-Pacific where China is a major player.

China's new development plan comes at the right time when the Philippines has attracted more investments, the most recent of which is the China-based DITO Telecommunity, a major telecom operator. Other investors are the APF Group Holding Corp, producer of slabs and hot rolled coils in Misamis Oriental, a province in Mindanao island, and Florida Blanca Steel Industries, an export producer of steel pipes in Pampanga, north of Metro Manila. These projects join the Liangan Power Corp, a renewable energy developer in Lanao del Norte, also in Mindanao, while Hydrocore is developing the Ibulao Hydroelectric Project in Ifugao province, northern Philippines.

In the last three years, according to China's Ministry of Commerce, project contracts signed by Chinese enterprises in the Philippines increased 28 percent annually, with turnover rising by 19 percent every year. In 2019, newly-signed contracts were worth $6.4 billion with a growth of 102 percent. In 2020, newly-signed contracts reached $ 9.59 billion, up 54 percent year-on-year.

To promote trade and investments, the Philippines has also been actively participating in China's major platforms, such as the China International Import Expo, the China-ASEAN Expo, and the China International Fair for Trade in Services. For two year, the Philippines has been the Guest Country of Honor at the China International Fair for Investments and Trade. Likewise, it has been taking an active role in the Belt & Road Initiative.

Set to convene in 2021 is the 29th Philippines-China Joint Commission on Economic and Technical Cooperation. Moreover, the country's four Philippine Trade and Investment Centers in China - Beijing, Shanghai, Guangzhou, and Hong Kong - can engage with Chinese enterprises pursuing "going-out" strategies.

Philippine Trade Secretary Ramon Lopez said that as members of the recently-signed Regional Comprehensive Economic Partnership, China can strategically partner with the Philippines with both countries having a complimentary comparative advantage to become a hub for innovation, R&D, and manufacturing, particularly in design and creativity-oriented products and services, in the region. The Philippines can also become a center for education and training. Once the agreement becomes effective, RCEP is expected to boost intra-regional investment and trade with ASEAN where the Philippines is a key founding member.

However, how the opportunities for economic growth offered by China's new development plan can be optimized depends on the principle of mutual benefit as framed by the two countries' comprehensive strategic cooperation. At the moment, the Philippines still needs to narrow down its trade deficit further with its strategic partner amounting to $3.65 billion in November last year.

After a slow economic recovery following the economic reopening a few months back the Philippines faces new lockdowns and restrictions in the wake of spikes in COVID-19 cases - recording more than 3,000 new cases per day since early March. On March 11, public health authorities reported 3,749 new virus infections - the highest daily case count after September 19.

Complicating the spike is the slow vaccination drive. A Philippine senator projects that with only a few thousands getting inoculated each day it would take 11 years before the 70 percent herd immunity can be achieved. COVID-19 vaccination kicked off more than a week ago with the arrival of 600,000 Sinovac doses donated by China with 1mln more expected anytime this month. Another 400,000 doses were bought from AztraSeneca.

Relations between the two countries face some uncertainties as the Philippines gears for hotly-contested presidential elections in May 2022 or 14 months from now. The term of President Rodrigo R. Duterte, who opened a new chapter of bilateral relations with Beijing in mid-2016, ends in June 2022 and it remains hazy whether any administration ticket that will be fielded for the next presidency will win to allow his foreign policy to continue.