Philippines: Marcos Administration To Work With Chinese Infrastructure Firm Blacklisted By US


By Camille Elemia

The Philippine president is willing to cooperate on infrastructure projects with a Chinese state-owned giant, his office said, although the U.S. has blacklisted the firm over its links to the militarization of Beijing’s outposts in the South China Sea.

In 2020, the United States put China Communications Construction Co. Ltd (CCCC) on a list of companies involved in projects that were part of Beijing’s “expansionist agenda” in the contested waterway. 

On Monday, President Ferdinand Marcos Jr. met with CCCC officials during their courtesy call at Malacañang Palace, the palace said in a statement.

CCCC “has committed more investments to the Philippines particularly through public-private partnership (PPP),” the statement said.

“The president said the central part of his government’s economic policy is the establishment, endorsement, and promotion of PPPs, in which the CCCC could participate,” the statement added.

Marcos said such partnerships “can be of any nature” whether through a commercial venture or a joint venture with a local partner. 

“Of course, the PPP, where you have partnership with government, even G2G – government-to-government arrangements – are also something that we have been doing for a long time and again that we wish to further,” Marcos said.

Marcos added that the government had also relaxed the rules to allow foreign contractors to bring in their own professionals to encourage technology transfer.

In 2020, the United States Department of Commerce under the Trump administration blacklisted CCCC and 23 other Chinese state-owned companies for their role in helping China militarize outposts in disputed waters of the South China Sea. 

The U.S. State Department barred them from receiving American-made components.

“The PRC must not be allowed to use CCCC and other state-owned enterprises as weapons to impose an expansionist agenda. The United States will act until we see Beijing discontinue its coercive behavior in the South China Sea, and we will continue to stand with allies and partners in resisting this destabilizing activity,” then-Secretary of State Michael Pompeo said at the time.

Meanwhile, militarization of South China Sea outposts by Beijing continues untrammeled.

A recently released satellite image shows a Chinese air defense facility on the disputed Paracel Islands. Analysts said this indicates that the People’s Liberation Army (PLA) now has surface-to-air missiles at the ready.

The Paracels, or Xisha islands in Chinese, are claimed by China, Vietnam and Taiwan but occupied entirely by Beijing since 1974. 

China also occupies some of the Spratly Islands (Nansha Islands in Chinese), which are claimed by other neighboring countries including Malaysia, the Philippines, and Vietnam.

Beijing has continued to ignore an international arbitration court’s 2016 ruling that favored the Philippines and invalidated China’s expansive claims in the sea region.

Marcos brought up the issue when meeting with Chinese President Xi Jinping during his state visit to Beijing in early January.

More infrastructure projects

At Monday’s meeting, CCCC officials pitched to Marcos the construction of a 270-kilometer highway linking Laoag City, in Marcos’ home province of Ilocos Norte, to Rosario City in La Union province. 

They also proposed the construction and introduction of China’s Juncao technology to the Philippines. 

The United Nations describes the technology as the “cultivation of a grass that can be used as a substrate for mushroom production, feed for animals, windbreaks, and to minimize soil erosion.”

CCCC, including its 60 subsidiaries, is a key player in Beijing’s Belt and Road Initiative, a massive network of trade and transport infrastructure linking China with the rest of Asia, Europe, the Middle East, Latin America and Africa.

As part of this initiative, Beijing is bankrolling roads, rail, ports, and energy pipelines in developing countries, which could lead to a debt trap, critics have warned.

One of CCCC’s subsidiaries, China Road and Bridge Corporation (CRBC), built the two bridges in Metro Manila that were donated by Beijing during the administration of President Rodrigo Duterte (2016-2022), who was known for being an ally of Beijing. 

In 2020, CCCC and a local partner initially won a deal to modernize an airport south of Manila, but that project fell through after the firms failed to comply with requirements. 

Since 2009, the World Bank has debarred CRBC from participating in all its funded or executed projects after the international institution found that the Chinese company had colluded with several local and international companies on the bidding for the first phase of the Philippine National Roads Improvement and Management Program (NRIMP 1). 

This ban later applied to CCCC in 2011 after it became the successor firm of CRBC.


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