We are pleased to share this month’s Occasional Paper entitled “Contentious Capital: the Political Economy of Chinese Investments in the Philippines.” Written by contributing expert Mr. Alvin Camba, the paper examines the relationship between China’s investment pathway into the Philippines relative to the strength of Philippine domestic institutions and to competing domestic political demands.
Over the course of the paper, Mr. Camba probes the claim that countries with weak institutions tend to attract higher levels of Chinese outward investment. His puzzle is Chinese investments in the Philippines, which has some of the lowest levels of Chinese investment in Southeast Asia despite seemingly favorable conditions. The answer, he argues, lies in the pattern of contentious politics in the Philippines, or the presence of elite competition and class tensions.
Mr. Camba concludes by recommending that the Philippine government pay attention to the type of Chinese actor that it engages, as this can determine the effectiveness and the impact of investments. Second, he observes that China’s rise as an alternative investment source has created more favorable conditions for developing states. Nevertheless, in his view, governments should acknowledge that China has geopolitical and territorial ambitions that color its investment decisions. He further recommends that governments empower their ministries to screen out unprofitable and exploitative investments.
The paper can be accessed through this link: Contentious Capital