Posted on July 27, 2007

Paradox For Philippines As Chinese Set Up Shop

Roel Landingin, Financial Times, July 24, 2007

She hardly speaks any English or Tagalog but that does not stop the white-haired grandmother from China’s southern Fujian province from running her clothes store in Divisoria, Manila’s bargain shopping centre. She has three Filipina assistants and she haggles with customers via a calculator.

Like many of the shop- owners in the “168” mall—which, in Cantonese, sounds like “prosperity all the way”—the grandmother is a recent arrival from China and part of a new wave of immigrants who have arrived in the Philippines.

The woman refuses to give her name but says she landed in Manila in 2002 from the southern city of Shishi with her son and his wife, who were escaping China’s one-child policy. The couple had a second child in the Philippines and plan to eventually return to Fujian, where the husband runs a clothing factory. Another son and his wife followed for the same reason and are awaiting the birth of their second child. The clothes store was set up to generate an income while they prepare their return to China.

The family are part of a wave of immigrants leaving China even as rapid economic growth is transforming the world’s most populous nation. Most head to the US, Canada and other rich western countries, often as illegal aliens. But each year thousands also seek to make their fortunes in a middle—income country growing only half as fast as China.

The trend has created an immigration paradox. The Philippines, perhaps best-known in recent years for its outgoing migrants, has become a destination for immigrants in its own right.

The new Chinese arrivals are drawn by a combination of weak law enforcement and huge fortunes to be made selling cheap Chinese goods to a swelling Filipino middle class. Feeding the growth of that middle class is the one in 10 of the country’s 86m people who are working abroad and their remittances, which reached $12.8bn (€9.25bn, £6.2bn) last year and have helped to drive consumer spending and economic growth.

According to Teresita Ang-See, an expert on Chinese in the Philippines, there are 80,000-100,000 illegal or overstaying Chinese nationals in the country, roughly a tenth of the million or so ethnic Chinese living in the Philippines. The latest influx has come in part because of Manila’s move in 2005 to liberalise entry procedures for Chinese tourists and investors, a move that helped triple the number of Chinese visitors to 133,000 last year.

But their growing presence in the Philippines is resented by many Chinese-Filipinos who have worked hard to assimilate. Many local Chinese consider the recent arrivals unfair competitors in business and fret that they could stir up resentment of the existing Chinese minority.

The Chinese-language press in Manila is full of bitter exchanges between the new and old immigrants. “Although the new immigrants appear to be better educated, they are considered more uncivilised, uncouth and ill-mannered,” says Go Bon Juan, director for research at Kaisa (Unity), a group promoting links between the local Chinese and Filipinos. “Even young students in Chinese-language schools tend to dissociate themselves from classmates who are newcomers.”

The resentment is even more pronounced among businessmen, in part because the new arrivals have a “tendency to be brash and pushy in their business transactions”, says Mr Go.

Many are drawn to illicit activities such as smuggling and drugs, he says. But they also stand accused of violating the law in more benign ways. Filipino law prohibits non-citizens from retailing but the rules are openly violated by new Chinese immigrants, whereas previous generations would often simply register businesses in the name of Filipino spouses or associates.

There are also questions about how long the new migrants want to stay. Immigration officials say some recent arrivals from China are using the Philippines as a transit point for entry to western countries using fake documents. According to the Bureau of Immigration, eight in 10 of the foreign nationals now caught attempting to enter the US illegally on flights from Manila are mainland Chinese.

“The Chinese come here as legitimate tourists or investors but try to leave for the US or Canada using forged passports or visas,” says Danilo Almeda, an immigration spokesman. But “the illegal scheme hurts the Philippines’ image and makes life harder for overseas Filipinos who have to face extra scrutiny from immigration officials all over the world”, he adds.