As China is transformed into an innovation and technology powered economy, there will be many new opportunities for Philippine companies, according to Philippine scholar Federico M Macaranas.
At the same time, Macaranas, former chairman of the department of economics at the Asian Institute of Management in Manila, believes the rise of the digital economy will act as a crucial growth engine for the Philippines and other fast-growing countries in Southeast Asia.
“Southeast Asia and Northeast Asia are the most dynamic parts of the electronic and information and communications technology (ICT) world, and we need to travel across the South China Sea in a peaceful manner because if that is closed to world trade, the whole global system will collapse,” said Macaranas.
Hence, in the long term, China’s investment in infrastructure projects in the region, in addition to a stable political situation, will prove imperative to the exchange of information and goods under a booming e-commerce and technology scene, he said.
Philippine President Rodrigo Duterte plans to spend over 8.4 trillion pesos ($163 billion) on infrastructure projects under his Build Build Build initiative — a six-year strategy spanning 2017 to 2022. China, during Duterte’s state visit in October last year, pledged $15 billion of investment into sectors including infrastructure and telecommunications.
“China has a long-term thinking that is not true of the Western businessmen,” Macaranas told China Daily Asia Weekly, stressing that investment in infrastructure will change the foundation of trade and many other industries in a new economic situation in the Philippines.
As China upgrades its manufacturing capacity and relocates some industries to countries in the Association of Southeast Asian Nations, he noted that the Philippines’ strong talent pool will play a bigger role in China’s innovation-led economy.
China will become more focused on high-level industries, and Philippine engineers, technicians and scientists will help in that transformation, Macaranas said.
“The Philippines is at the verge of a technical revolution as young people are getting more into science and technology,” he said.
He noted that while the Philippines is a major supplier of electronic components to big global companies, the country is also upgrading its contribution to the new economy by focusing on science and technology education.
For instance, in October, the nation’s Department of Science and Technology set up new scholarship programs to encourage research and innovation in data science.
Universities are also offering entrepreneurship courses to young people, Macaranas said, and industries including agriculture are benefiting from a wave of entrepreneurs using innovative technology to solve problems.
He believes that when the Philippines can nurture and retain its talent within the country, the economy will go through a “game-changing” transformation to a more modern one.
With the Philippines and China sharing a similar vision for an innovative economy, Macaranas sees huge room for innovation and technology collaboration between the two countries, especially in solving problems that are common to both.
He urged closer communication and exchange opportunities among young people of China and the Philippines, to work together in creative thinking, and toward finding solutions.
“It’s clear that humanity has a lot of problems in food, physical security, production, climate change, traffic congestion — whether in the Philippines or in China,” he said.