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22 January 2010

China-Philippines trade declines 30% in 2009

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Bilateral trade between the Philippines and China suffered a decline for the second-straight year, plunging by 30 percent to about $20 billion in 2009, Philippine daily the Business Mirror reported, citing preliminary data from the Chinese Embassy in Manila.

But with the expected improvement in China’s overall trade and global economic recovery this year, combined with the implementation of the China-Asean Free-Trade Area beginning January, Beijing is optimistic that the exchange of goods between the two countries will increase in 2010.

Liu Jianchao, Chinese ambassador to Manila, said growth is expected in the value of
Philippine exports to China, particularly key products such as semiconductors and electronics, food and minerals.

“Compared to last year, certainly there will be positive growth,” Liu told the BusinessMirror at a luncheon he hosted on Thursday at his Makati residence.

In 2007, China-Philippines trade reached $30.6 billion. This plummeted to $28.6 billion in 2008 and is estimated to further drop to $20 billion in 2009.

Wu Di, Chinese economic attaché to Manila, said the Philippines has been enjoying a $10-billion trade surplus with China, although this is expected to have also gone down last year.

Wu said the drop in the bilateral trade is expected since China’s overall trade suffered a 20-percent decline in 2009 to $2.2 trillion.

However, 2010 will be a different story, he said, since China is projecting higher exports. This means that the Philippines will be benefiting also because China is importing a sizeable volume of intermediate materials from the country.

For instance, electronics—which makes up about 80 percent of Chinese imports from the Philippines—will certainly register an increase because China-based manufacturers are using Philippine-made electronic parts and components as inputs.

But while the trade volume dropped in 2009, Liu reported that the number of Chinese tourists who visited the Philippines last year increased by 37 percent to 220,000 individuals.

“I know that the number of tourists in the country is not really increasing that much. But as far as Chinese tourists are concerned, we had a 37-percent growth rate, so this is very encouraging,” he said.

Liu narrated that even he and his friends are having difficulty getting hotel reservations in Boracay and Bohol because many Chinese tourists have already booked rooms ahead of time for the Chinese New Year holidays in February.


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