Two Chinese companies are reportedly interested in buying the Philippines’ largest shipyard, once an important US naval base in the Pacific region. Some Philippine politicians have expressed concern over a possible Chinese takeover, saying it will be a very significant national security issue.
An unexpected choice is brewing in the Philippines. Since the start of the presidency of Rodrigo Duterte, marked warming of bilateral ties has stoked Chinese firms’ enthusiasm for investing in the Southeast Asian country. In 2018, China’s outbound investment in the Philippines rose by more than 8,000 percent from a year earlier.
According to Globaltimes, the Belt and Road Initiative of China hopes to shore up economic cooperation and let countries and regions along the routes share the prosperity of China’s growth. Most countries don’t want to avoid the opportunity, the Philippines being no exception. If the Philippine government bans Chinese companies from buying the shipyard from its current South Korean owner, it will hit Chinese people’s enthusiasm for investing in the country.
It is easy to feel the influence of the US when dealing with regional affairs in Southeast Asia. Although Duterte’s strategies differ in some ways from those of his predecessors, the US still has a strong influence on the Philippines. It is expected that the Philippines may worry that the takeover of strategic facilities by Chinese companies could affect its relationship with the US.
As for the Philippines, the country needs to get out itself of US influence with a new understanding of the Chinese investment. We hope the Philippines can provide fair treatment to Chinese enterprises and abandon its old idea that it has to take sides between China and the US, the report added.
Hanjin Philippines was established in 2006 as a subsidiary of South Korean shipbuilder Hanjin Heavy Industries and Construction Co. Ltd. Since 2008, the company has delivered a total of 123 vessels to clients across the globe, putting the Philippines on the map as the world’s fifth largest shipbuilder.
The port has been operated by Hanjin Heavy Industries and Construction Philippines, a shipbuilding unit of South Korean firm Hanjin Heavy Industries and Construction. The company declared bankruptcy in January after defaulting on loans of over $400 million or almost 21 billions pesos Philippine currency from Philippine banks. The company also has $900 million or almost 41 billion pesos in loans from South Korean banks.