Groups call for de-escalation of tension with China

MANILA, Philippines — A coalition of 23 business and sectoral groups is calling for de-escalation of tensions between the Philippines and China, citing risks to deep trade and economic ties if strained relations persist.

“We respectfully appeal to Philippine and Chinese authorities to lower the temperature, restore disciplined diplomatic engagement and build a stable, respectful and productive bilateral relationship,” the groups said in a joint statement, amid heightened heated exchanges between the Chinese embassy in Manila and some Philippine officials.

The groups include the Employers Confederation of the Philippines, Foundation for Economic Freedom, Federation of Filipino-Chinese Chambers of Commerce and Industry Inc., Foreign Buyers Association of the Philippines, Philippine Chamber of Commerce and Industry, Philippine Exporters Confederation Inc., Philippine Hotel Owners Association Inc. and Semiconductor and Electronic Industries in the Philippines Foundation Inc.

With the prevailing global uncertainty and supply chain disruptions, the groups called for a careful approach in handling the two countries’ relations, while advancing national interests.

“All parties should avoid inflammatory rhetoric, public recriminations and social media exchanges that could further strain bilateral relations. Diplomacy is best pursued through established channels, coordinated institutions, informed dialogue, mutual respect and a clear understanding of national interests,” the groups said.

Given the deep trade and economic ties between the two countries, the groups cited the importance of a foreign policy that protects sovereignty, economic security and long-term development.

Citing data from the Philippine Statistics Authority, the groups said that China and Hong Kong serve as the Philippines’ largest trading partner, accounting for nearly 30 percent of the country’s total international trade in recent years. The Philippines accounts for less than one percent of China’s total global trade.

Deeply connected

The two economies are deeply connected in terms of trade, manufacturing, construction, infrastructure, agriculture, retail, energy, electric vehicles, solar panels and other sectors.

China is also a major supplier of essential goods, industrial inputs, machinery, electronics, strategic raw materials and renewable-energy technologies needed by Philippine businesses, consumers and even the country’s clean-energy transition.

“Because trade with China represents a far greater share of Philippine external trade than the Philippine market represents of China’s global trade, we must practice careful economic statecraft while pursuing strategic diversification, stronger domestic industries, local assembly and manufacturing and sound diplomacy,” the groups said.

Beyond trade, the Philippines also benefits from remittances from overseas Filipino workers in China, Hong Kong and Macau, according to the business groups.

“Whatever our political differences or maritime disputes, constructive diplomacy and stable economic relations are essential to protecting livelihoods, maintaining investor confidence, controlling costs, accelerating clean-energy adoption and sustaining development,” the groups said.

As the Philippines aims to attract regional tourism, investment and other commercial opportunities, the groups also emphasized the need for a competitive, predictable and welcoming environment.

As such, the groups urged both the Philippines and China to avoid statements that heighten tensions.

Coherent foreign policy needed

The groups also urged both parties to strengthen and pursue a centralized, coherent and consistent foreign policy by having designated authorities communicate their position through coordinated institutions and established channels.

They likewise called on the parties to uphold sovereignty, while preserving economic cooperation. This can be done by defending sovereign rights under international law, while maintaining dialogue and cooperation on trade, investment, tourism, energy security, electric mobility, solar deployment and other areas of mutual interests.

They also cited the need for both countries to prioritize trade, investment as well as the creation of decent work by expanding market access, strengthening resilience of supply chains, promoting technology transfer, encouraging local production, clean energy generation, as well as investments.

The groups said mutual respect and responsible communication should take preeminence over public exchanges that intensify tensions between the two countries.

“Constructive relations with China do not require abandoning Philippine sovereignty, overlooking legitimate concerns or compromising an independent foreign policy. Effective diplomacy means defending national interests while avoiding unnecessary escalation,” the groups said.

They also maintained that firmness and friendship, vigilance and cooperation, as well as national dignity and economic pragmatism can go hand in hand.

While protecting the country’s sovereignty is important, the groups stressed that Filipinos also need a government that works to expand prosperity to allow entrepreneurs, farmers, manufacturers, workers and consumers to benefit.

“For the Philippines, the path forward must be one of sobriety, strategic clarity, economic pragmatism and constructive engagement with China and the wider international community,” their joint statement read. “Our national interest demands nothing less.”