Western and Chinese business in Hong Kong

15

May

A Brief History of China – Philippine Investments

Foreign investments in the Philippines can help the country reach its economic goals and overall economic potential. With the assistance of foreign capital in the country, the Philippines can invest in upgrading infrastructure and provide more opportunities for its people. Chinese investment in the Philippines is one of the most popular foreign investments in the country. This article will provide a rundown of the rich history of Chinese trade and how they aided in the development of the country and its citizens. Then we’ll talk about the types of investments that can help you earn a profit in the Philippines.

History of Chinese Trade in the Philippines

The Philippines and China trade relations go all the way back to the 10th century. During the Sung Dynasty (860 – 1127), some Chinese colonies have established towns and homes on the Philippine coast. Arab traders would bring Philippine goods to the southwest coast of China through the port of Canton. Dozens of Chinese coastal posts were formed in order to ensure smooth import of goods. The common goods that the Chinese would trade to Filipinos were silk, glass, porcelain, beads, and iron; in return, Filipinos would trade hemp cloth, pearls, wax, and tortoise shells.

A few centuries later, in the Ming Dynasty (1368 – 1644), Chinese colonies moved closer and began building larger towns away from the ports of the coast. During these early periods of Chinese settling in the Philippines, trade began between the two countries. A form of cultural exchange would happen between Chinese and Filipino traders. In 1571, when the Spanish set foot in Manila, the population of Chinese people in the Philippines increased.

The majority of Chinese people found in Manila were traders. Conducting trade business in the country and the recent settlement of Spanish colonies allowed the Chinese to capitalizePhilippines increased on the good of the Spaniards in the Philippines. A few years later, many Chinese people in the Philippines would situate themselves near Spanish communities and highly populated towns.

They would set up various businesses and take on important roles in cities and towns; many of them were in the business of food, retail trade, and specialty goods. As time passes, Spaniards in the Philippines would economically depend on the Chinese. Many of their good would come from Chinese sources. The Manila Galleon trade would allow Chinese products and materials to be shipped to Spain and Europe.

Around the late 1570s, the population of Chinese settlers in the Philippines rapidly grew. This became a concern to the Spanish colonies as their own population in the Philippines was slowly being outnumbered. This is due to the vast business investments of China in the Philippines. While the Spanish were still in power, they required Chinese settlers to live in a compound called the Parian. The Parian would become the center of commerce in Manila.

Hundreds of Chinese merchants and businesses arose in the Parian. The first known location of the Parian was along the banks of the Pasig River. This burned down and a new Parian was built in 1583, and as usual, Chinese business flourished.

This business center held hundreds of Chinese businesses and new locations for other Parians had to be established. Chinese communities would move to other places in Manila and began expanding their businesses in Binondo, Santa Cruz, and Tondo. Manila was a major location for Chinese trade. Skilled Chinese craftsmen were known to reside in these areas, providing crafts such as shipbuilding, tailoring, sculpting, and carpentry. As cultural differences between the Spanish and Chinese tensed, the Spaniards burned and destroyed the Parian.

With the Parian in ruin and Chinese merchants with no place to sell their goods, Governor Dasmariñas took charge of resettling the Chinese merchants by buying a piece of land across the river from the walled city of Intramuros. There, he developed a new settlement for Chinese merchants to vend and conduct their business. The governor knew that the Spanish communities highly depended on Chinese services, that was his reason for establishing the new business center of Chinese trade in the Philippines, this piece of land is now known as Binondo. With the kindness of Governor Dasmariñas, the land was tax-free. In the beginning of Binondo’s development as the new Chinese trade district, no Spanish religious or cultural influences took place. But when Dominican friars were assigned to Binondo, the community adopted Christianity and many Catholic Chinese populated the area.

China-Philippine Relationship in Modern Times

China has always been an integral part of the Philippine economy. With access to hundreds of goods, the country still benefits from Chinese businesses and services. China-Philippine investments continue to grow and introduce the country to worldwide access to thousands of different products. Allowing this relationship presents a win-win situation for both the nation and Chinese investors.

Foreign investment in the Philippines can provide our nation with a handful of benefits. In fact, foreign investment is an integral part of the Philippine economy. Foreign investments aid the Philippines’ economic growth by filling the gap between the Philippines’ savings and investments, year by year. It helps in providing opportunities for people and increases the Gross Domestic Productivity (GDP) of the country. The involvement of Chinese investments and businesses in the Philippines has remained constant since its beginning. Today, the majority of businesses are run by Chinese or Chinese-Filipino citizens. This has led to a number of infrastructural developments and has helped the nation become more globally competitive. If you want to invest in the Philippines, here are a few things you need to know.

What Is An Investment?

The term investment has become muddled throughout the years, with various applications and terms, and it may be difficult to truly define what it means. But in simple terms, when you talk about investments, you’re referring to a commitment of funds, time, and effort to a source of potential profit. Other terms for investment companies in the Philippines may refer to increasing your brand’s marketability.

Any form that involves shelling out resources for potential growth can be called an investment. In the Philippines, investments from China commonly revolve around three major groups that expect to produce high income: ownership investments, lending investments, and cash equivalent investments.

Ownership Investments

Under ownership investments, there are 4 types of profitable investments that fall under this group: These are the stocks, businesses, real estate, and precious collectibles.

Stocks

Stocks are one of the major investments that has drawn Chinese investors to the Philippines. Stocks have basically certified that state that you own a portion of a company. Many Chinese investors choose to purchase Philippine stocks due to their high potential growth, which means that a company’s value will dictate the price tag of your share. Additionally, when you buy these investments, you are entitled to a portion of the company’s worth, this may allow investors to carry out certain actions.

How do people make money out of this? Typically, profit is realized by how the market dictates the value of the assets you own. If you own shares of a company and they post a record profit, many other investors would want a slice of this form of investment too. The demand for stocks also drives the price of shares. If you choose to sell your shares at the right time, you may draw in some large profit. This form of investment involves high-risk high reward situations. One must always be up to date with the stock market and constantly monitor the market trends.

Business

This form of investment is without a doubt, the most popular form of investment that the Chinese choose to put their money in when they want to invest in the Philippines. This may be one of the most difficult investments as it requires dynamic involvement, shelling out of resources, and active participation in every aspect of sales, operations, and management. Though tough and difficult to manage, depending on your success, business investments reap extremely large profits and returns. Experts in the field of business are called entrepreneurs. Many Chinese entrepreneurs in the Philippines have found success in providing exceptional products and services in the country.

Real Estate

It is a fact that land or real estate will always be a growing investment. Its value will never drop due to the rising demand for land. Choosing to buy, rent, or sell a house, apartment, or a lot is a form of investment. Though a house you live in may be a different matter, yes, it is potentially an investment but it’s a space you live in to fill your basic daily needs. If you plan on investing and making a profit out of real estate, you have to be careful with the location and type of land you plan to acquire. Though it is true that the value of real estate will only be appreciated, there may be risks involved such as the mortgage meltdown in 2008.

Precious Collectibles

From rare paintings to precious metals, any product that certain communities desire with the intention of reselling them is a form of investment. Though this form of investment is volatile in terms of profit and resell value, many people still make a living out of precious collectibles. It may not be the best choice for many due to its high risk of depreciation and market price flux. It may require an individual to put exhaustive amounts of effort into keeping a signed celebrity sports jersey in top condition to resell for a high price in around 5 years or so.

Lending Investments

Lending investments tend to be of lower risk compared to ownership investments, as these types of investments don’t require too many resources to be shelled out. As a result, the return may not be as high as ownership investments. Many China-Philippine investments in the market revolve around lending investments. The two types of lending investments are savings accounts and bonds.

Savings Account

It may not seem like much, but your savings account is actually a form of investment. By depositing money in a savings account, you are generally lending money to a bank. Savings accounts have interest rates that promise a percentage growth depending on how much is deposited in the account. Returns are generally low, but the risk may be completely nonexistent. Savings accounts can be a safe place to slowly grow your money and keep them safe.

Bonds

Bonds generally work that same way as stocks, the difference between the two is that stocks are an equity certification that carries out one’s ownership interest while a bond is a debt instrument with a promise to pay the owner back with interest. While the return guarantee for stocks is unsure, bonds will guarantee that you will be provided with returns, it may only take time. The risk and returns of bonds may depend on the type of bonds but acquiring a bond that poses a low risk will provide a lower profit.

Cash Equivalents

Cash equivalents are forms of investment that are just as good as cash. This means that this form of investment can easily be converted to readily available cash when you need them. What are these cash equivalents? These can be in the form of treasury bills, government bonds, money market holdings, and commercial paper. Due to the high liquidity of these assets, you can expect any of them to appreciate and convert them into cash whenever you want to grab hold of money. Many China-Philippine Investments in the country are in the form of cash equivalents. Most people use these as fallback cash assets.

Finding Growth in the Philippines for Chinese Citizens

China-Philippines investment companies involve plenty of benefits for the country. All of them help the country’s economic growth and GDP. The Philippines is in dire need of extra capital to fill the gap of the country’s expenses, investments, and savings. If you’re a Chinese foreigner who is looking where to invest in the Philippines, you can click on this link to access the services of CPU to help your future investments in the Philippines.

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