People’s Republic of China (P.R.C.)

Zhonghua Renmin Gongheguo

1 October 1949

Beijing

HEAD OF STATE:

His Excellency President Hu Jintao

HEAD OF GOVERNMENT:

His Excellency Wen Jiabao

Administrative Divisions: 23 Provinces (including Taiwan), 5 Autonomous Regions, 4 Municipalities directly under the Central Government (Beijing, Tianjin, Chongqing, and Shanghai), and 2 Special Administrative Regions (Hong Kong SAR and Macao SAR)

Eastern Asia, bordering the East China Sea, Korean Bay, Yellow Sea, and the South China Sea, between North Korean Bay and Vietnam

Neighbors: Afghanistan, Bhutan, Myanmar, India, Kazakstan, North Korea, Kyrgyztan, Laos, Mongolia, Nepal, Pakistan, Russia, Tajikistan, and Vietnam.

Topography: The topography of China is complex, high in the west and low lying in the east. Mountains, hills, and plateaus account for 65% of the country’s land area. China also abounds in rivers and lakes.

TOTAL AREA:

9,596,960 sq. km. (slightly larger than the U.S.)

POPULATION:

1.3 billion (as of January 2007)

CLIMATE:

Temperate

LANGUAGES:

Standard Chinese or Mandarin (Putonghua, based on the Beijing dialect), Yue (Cantonese), Wu (Shanghainese), Minbei (Fuzhou), Minnan (hokkien-Taiwanese), Xiang, Gan, Hakka dialects.

LITERACY RATES:

81.5%

Buddhism, Taoism, Islam and Christianity

GDP : $2.7 trillion (2206)

GDP Growth Rate : 10.7% (2006)

Exports : US$969 billion (up 27% - 2006)

Exports : Textiles, garments, footwear, toys, machinery and equipment, weapon systems

Export Partners : EU, Hong Kong, Japan, US, Germany, South Korea, Russia, ASEAN

Imports : US$791.6 billion (up 20% - 2006)

Imports : rolled steel, motor vehicles, textile machinery, oil products, aircraft

Import Partners : EU, Japan, Taiwan, US, Hong Kong, Germany, South Korea, ASEAN

CURRENCY:

Renminbi (RMB) or yuan (CNY)

US$1 = RMB 7.6514 (exchange rate - May 2007)

MEMBERSHIP IN INTERGOVERNMENTAL BODIES:

International: APEC, ARF, UN, ASEAN Dialogue Partner, WHO, WTO

Regional: WMO, UNHCR, UNESCO, UNITAR, UNIKOM, UNOMIL, ILO, IMF, IMO, IAEA, ESCAP, INTERPOL, IOC, ISO

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One of the main events of the dawn of the twenty-first century is the re-emergence of China as a political, military and socio-economic powerhouse in the Asia-Pacific region and in the world. Like most countries in the region, the Philippines sees this trend less as a threat and more as an opportunity. The Philippines believes that by properly managing bilateral relations, transcending the specific issues between them, it could ride on the growth of the "dragon" and reap the benefits of a healthy, comprehensive, and long term relationship with China.

The Philippine relations with China is now among the most important ties the country has with any member of the international community. President Macapagal-Arroyo has said in various fora that the Philippines desires a healthy, comprehensive, and long term relationship with China that transcends the specific issues between them. Today, China is the Philippines’ partner in peace and development, mining, infrastructure, and agriculture.

Although the Philippines’ ties with China date back many centuries ago, formal diplomatic relations were established with the People’s Republic of China on 9 June 1975. During the commemoration of the 25^th year of the establishment of diplomatic relations between the two countries on 9 June 2000, a Joint Statement on the Framework of Bilateral Cooperation in the 21^st Century was signed between the two countries. The document set the course for the future direction of Philippines-China relations by widening their areas of cooperation to encompass defense and military fields, trade and investment, science and technology, agriculture, education and culture, judicial-legal, and other areas.

The State Visit of President Arroyo to China in September 2004 brought the relationship at an "all-time high", with the President enjoying a high level of rapport with the current crop of Chinese leaders. In return, Chinese President Hu Jintao visited the Philippines on 26-28 April 2005, affirming the personal goodwill between the two Presidents. Premier Wen Jiabao further conducted an official visit to the Philippines on 15-16 January 2007.

After the celebration of the 30^th anniversary of the establishment of diplomatic relations between the two countries in 2005, relations accelerated through 2006 in the political-security, economic and socio-cultural fields of endeavor. Trade, investment and tourism and technical and economic cooperation provided the main engines of bilateral interaction, together with the increasing frequency of high-level exchange of visits, increasing number of bilateral agreements and sister-province/city arrangements.

Defense and Security Cooperation

The Philippines and China have been expanding cooperation in political/security matters in recent years. Exchange of high-level visits increased with the visit to southern China of President Arroyo in October 2006 and of Vice President Noli de Castro, Speaker Jose de Venecia and other Philippine officials to China earlier in the year. Aside from Premier Wen, several other Chinese Communist Party and National People’s Congress and provincial officials visited the Philippines in 2006, including Liu Yunshan, the Communist Party Publicity Department Chair. The number of agreements being signed between the two sides also increased.

The Joint Statement on the Framework of Bilateral Cooperation in the Twenty-First Century signed in 2000 provides for strengthened bilateral consultations between the military, defense, and diplomatic officials on security issues. However, it was only in 2004, that cooperation crossed the threshold of defense, a formerly inconceivable step, formalizing dialogue and stepping up defense cooperation which had set precedents for the rest of the region.

During the State Visit of H.E. President Gloria Macapagal Arroyo in September 2004 the two sides agreed to develop defense cooperation between the Philippines and China.

The two sides signed the MOU on Defense Cooperation during the meeting of Secretary of National Defense Avelino J. Cruz with his Chinese counterpart, Minister of National Defense Cao Gangchuan, in Beijing on 08-14 November 2004, during which the Chinese also agreed to give RMB10 million in gratis military assistance to the Philippines and to more exchanges in the senior, mid-level and junior levels of the Philippine and Chinese militaries.

The Philippines hosted the first ever RP-China Annual Defense and Security Dialogue on 23 May 2005 during the visit of Gen. Xiong Guangkai, Vice Minister of China’s Ministry of Defense and Deputy Chief of Staff of the People’s Liberation Army, to the Philippines. The establishment of the mechanism is called for by the MOU. It represented a major step for the two countries to further enhance the level of trust. In the past RP-China confidence-building between the two countries were in the functional areas such as in fisheries and marine environment protection until regular military-to-military exchanges (port calls, exchange of visits) began to take place since 1999.

Ever since the forging of the MOU on Defense Cooperation in 2004, defense relations between the two countries have improved dramatically. AFP has availed of 10 courses in China from 2001 to 2006 on language training, military security management and command courses and special operations command courses. China has donated a total of RMB20 million (US$2.5 million) in equipment and supplies (including 12 engineering equipment) to the AFP since 2004, and AFP and the People’s Liberation Army have been conducting intelligence exchanges.

The Philippines and China signed two agreements on cooperation in the fight against drug trafficking and production and transnational crimes in September 2001. These agreements have facilitated concrete results, among them the interception of a drug shipment worth millions of pesos in Bulacan in February 2004. Both sides are working on the operationalization of the agreement concerning transnational crimes, which expands cooperation to a list of 16 transnational crimes.

Recognizing that this area has become a prominent area of security cooperation between the two countries, the Philippines and China discussed and agreed during the September and April state visits to assign police liaison officers to each other’s embassies.

The Chinese police attaché to the Philippines arrived in the country in late August or early September 2005. On the other hand, the Philippines is still in the process of preparing for the assignment of its police attaché to China.

In December 2006, RP and China successfully conducted simultaneous special operations against drug syndicates in China and in the Philippines as a good example of the effectiveness of joint anti-crime efforts.

Search and Rescue and Disaster Relief and Management

The Chinese and Philippine sides conducted a Search and Rescue (SAR) simulation exercise. In October 2004 the Philippine Coast Guard and its counterpart, the Chinese Maritime Safety Administration conducted a table top Search and Rescue Exercise at the Philippine Coast Guard Headquarters in Manila. In the exercise the two sides simulated the rescue of the crew from a burning oil tanker located in the South China Sea. The exercise demonstrated the interoperability of the two Coast Guards in SAR operations.

The tabletop exercise was agreed by and between the Philippines and China as one of the alternatives to enhance bilateral relations and build mutual trust between the two countries during the 3^rd Philippines-China Experts Group Meeting on Confidence Building Measures in Manila on 3-4 April 2001.

Partly as a result of this exercise, the Philippines and China forged a framework agreement on maritime cooperation on 27 April 2005.

Furthermore, the Chinese government has always extended its sympathy and support during times of calamity and distress in the country. The Chinese Government extended assistance during the landslide in Southern Leyte (US$250,000 in cash and US$750,000 in materials), the oil spill in Guimaras (US$2.1 million) and the series of other typhoons that ravaged the Philippines. The Government of the People’s Republic of China made a donation of US$200,000 in cash and 1,700 units of tents approximately worth US$800,000 to the Government of the Republic of the Philippines to support efforts to rescue, relieve and rehabilitate the people and communities afflicted by the super-typhoon Reming in Bicol Region.

The South China Sea (SCS) issue, the only irritant in the Philippines-China relations has not hampered the development of relations between the two countries. The Philippines remains steadfast in its commitment to settle the dispute peacefully through consultations and negotiations. It continues to undertake diplomatic efforts at the bilateral as well as regional/international level to ensure peace and stability in the SCS.

Efforts by the Philippines and China have helped enhance the level of political understanding and mutual trust between the two countries and improve overall ties, particularly following the tensions in 1995 on the construction by the Chinese of fishermen’s facilities on Mischief Shoal in the Kalayaan Islands Group.

The exchange of visits to each other’s capitals of then Defense Secretary Angelo T. Reyes and General Chi Haotian, Chief of the Chinese People’s Liberation Army in 2003 helped forced a consensus that both sides will endeavor to expand military to military exchanges to enhance working relations and build mutual confidence between the defense establishments of both countries.

ASEAN-China Declaration on the Conduct of Parties in the South China Sea

The Philippines continues its efforts to address the South China Sea issue in the multilateral setting through the ASEAN-China Declaration on the Conduct (DoC) of Parties in the South China Sea which was adopted in Phnom Penh in November 2002. The Declaration was the result of years of negotiations between ASEAN and China, which the Philippines shepherded. It has become one of the most important arenas for political cooperation between ASEAN and China.

The DoC states that parties to the agreement will "undertake to resolve their territorial and jurisdictional disputes by peaceful means, without resorting to the threat of use of force, through friendly consultations and negotiations." Furthermore it urges parties to exercise self-restraint in conduct of activities that would complicate or escalate disputes. It encourages the concerned states to seek ways in the spirit of cooperation and understanding to build trust and confidence in each other. Among the cooperative activities recommended by the DoC are marine environmental protection, marine scientific research, search and rescue operations, among other things. The parties to the agreement are the 10 ASEAN states and the People’s Republic of China.

While it supports and promotes confidence-building and cooperation, the Philippines views as paramount the vision of the DoC to institutionalize a code of conduct that will ensure peace and stability and enhance cooperation and understanding in the region, towards the peaceful, permanent and comprehensive settlement of territorial disputes and overlapping claims in the South China Sea.

Joint Marine Seismic Undertaking (JMSU) in the South China Sea

The Philippines National Oil Company (PNOC), China National Offshore Oil Company, Ltd. (CNOOC) and PetroVietnam signed a tripartite agreement on the Joint Marine Seismic Survey of the petroleum and resource potential of the South China Sea on 14 March 2005. The agreement turned South China Sea from an area of conflict into a zone of peace and cooperation The endeavor involves a three-phase program of data-gathering, consolidation and interpretation. Launched on 26 August 2005, it completed its initial survey on 19 November 2005 after acquiring around 11,000 kilometers of 2D seismic data. The project is now at its second phase which started in January 2007 and is expected to be completed in June 2008.

According to the PNOC, the initial results of the interpretation show the area to be very promising in terms of its petroleum potential. If analysis definitely reveals valuable resources in the South China Sea, this would have to lead to a new level of cooperation, without prejudicing Philippine claims to the area. The parties would have to decide what next steps to take, emphasizing the need to build more trust between and among claimant states to advance the JMSU process. If the Philippine Constitution, territorial and patrimony laws will allow it, a possible next step would be for the three governments to conclude an agreement on the exploration of resources in the disputed area.

The agreement is a step towards possible discussions in the future between and among the claimant states on provisional cooperative arrangements in the SCS pending the complete and final resolution of the disputes. The Philippines sees the agreement in line with the Philippine policy to pursue collective security and regional cooperation to enhance peace and stability in the SCS. This undertaking also elevates the commitment enshrined in the ASEAN-China Declaration of Parties in the South China Sea (DoC). Expanded participation in open and mutually-beneficial joint undertakings in the South China Sea will contribute further to the decrease of tensions in the area and establish a new paradigm of constructive engagement.

The Philippines entered the undertaking within the context of its policy to pursue regional alliances to energy security. This policy, which is in the five-point energy security program of the Department of Energy, is being pursued actively in multilateral channels such as the ASEAN, ASEAN Plus Three, APEC and the Asia Cooperation Dialogue.

ECONOMIC, TRADE, AND TOURISM

Trade and economic cooperation has emerged as a major pillar of Philippines-China relations.

According to the Philippine National Statistics Office, China is now the Philippines’ third largest trading partner after Japan and the US. Bilateral trade has been growing at an average annual growth rate of 41.39% since 2001. Bilateral trade between the Philippines and China amounted to US$8.29 billion in 2006 increasing by 33.6% compared to the US$6.97 billion registered in 2005. Exports to China amounted to US$4.62 billion in 2006 making China the third largest export market after Japan and the US, while imports amounted to US$3.67 billion, giving the Philippines a surplus of US$495 million.

According to the China Customs Administration Office, however, China is already supposed to be the Philippines’ No.1 trading partner.¹ According to its figures, bilateral trade amounted to US$23.4 billion in 2006, increasing 33.3% over that of the US$17.59 billion in 2005. Trade imbalance in favor of RP is growing. RP exports to China amounted to US$17.67 billion, while imports from China reached only US$5.74 billion. It represents increase of 37.3% and 22.4% respectively. RP’s surplus of US$11.9 billion may be attributed entirely to its exports of Chapter 85 products (semi-conductors, etc.), which amounted to US$12.92 billion. Such products accounted for 73% of total RP exports to China or 55% of total trade.

RP was China’s 17^th largest trading partner in 2006, accounting for 1.33 percent of China’s foreign trade. Both countries pursue as their mutual goal the expansion of total trade to US$30 billion by 2010.

RP exports of electronic and mainly semi-conductors accounted for 71% of total RP exports and 52% of total bilateral trade. RP’s top 5 exports are machinery and mechanical products (including semi-conductors and electrical equipment), optical photographic, surgical instruments and apparatus, copper products, mineral fuels and oils. They accounted for 96.38% of RP’s total exports to China. RP exports of fruit (mainly bananas) performed better with total exports amounting to US$92.45 million, increasing 9.32% over the previous year. China’s exports to RP covered a wide range of items, with the export of semi-conductors products accounting for 31.61% of total exports.

This is an area that witnessed considerable progress in the last thirty years, particularly since 2000, when China began to implement broad-based market reforms. Trade has been in the favor of the Philippines since 2000.

The Philippines and China are looking at a US$30 billion trade volume by 2010.

Investments

Based on statistics of the Board of Investments, total approved Chinese investments in the Philippines amounted to US$370 million from January to September of 2006, contributing 11.7% to the total approved commitment investments to the Philippines from around the world. This is a far cry from the mere US$3.8 million Chinese investments registered for the whole of 2005 which accounted for a meager 0.14% of total foreign investments to the Philippines for the period.

On the other hand, based on Chinese Ministry of Commerce statistics, Philippine investments in China amounted to US$542.69 million.

Chinese investments were directed mainly to manufacturing of garments and packaging materials and very minimal record on semiconductors. For the first time, it climbed to third place after Korea and the US and followed closely by Japan.

New Areas of Cooperation

To consolidate the expanding areas of economic cooperation between the Philippines and China, both sides have agreed to streamline the mandate of the existing Joint Trade Committee (JTC). This was the essence of the MOU on the Promotion of Trade Investment and Economic Cooperation between the Governments of the Republic of the Philippines and the People’s Republic of China, which was signed during the April state visit.

Under the JTC are newly-created joint working groups focusing on developing cooperation further in two of the most important growth areas in RP-China economic ties, i.e., mining and infrastructure construction. These two JWGs had their inaugural meetings in Beijing on 27 March 2006 and reported to the 25^th JTC Meeting that was also held in Beijing on 28 March.

With the signing on 15 January 2007 of the Framework Agreement on Expanding and Deepening Bilateral Economic and Trade Cooperation, bilateral economic cooperation will further deepen in the next ten years to cover agriculture, fisheries, public works and infrastructure, housing, mining, energy, manufacturing, textiles and garments, industrial parks and economic development zones, tourism, information and communications technology, container inspection machines, and trade promotion.

With the creation of the Economic Cooperation Working Group (ECWG) under the Framework Agreement on Expanding and Deepening Bilateral Economic and Trade Cooperation between the Philippine Government and the Chinese Government, the responsibilities of these two JWGs will be transferred to the ECWG.

Agricultural Cooperation

In agriculture, the Chinese government has supported the Philippines’ agricultural modernization program through various means. Hybrid rice seeds donated by China during the state visit of H.E. President Gloria Macapagal Arroyo in 2004 were used by Filipino farmers and have helped increase productivity. These specimens are currently being field-tested in various parts of the country in accordance with the National Seed Testing Center protocols.

In March 2003, the Chinese funded the US$8.75 million Philippine-Sino Center for Agricultural Technology in Nueva Ecija. This center is the brainchild and gift of then Chinese Premier Zhu Rongji. It serves as the hub for scientific exchanges and technology transfer in agriculture between the two countries. According to Chinese authorities, it is their model arrangement for China’s agricultural cooperation with other ASEAN neighbors. Another center was set up in Cavite for hybrid corn, the Philippine-Fuhua Sterling Agricultural Technology Development Corporation. The project would help efforts at rice and corn self-sufficiency of the Philippines.

The PRC government also made available in 2000 a US$100 million credit facility. Portions of this facility financed the construction of an irrigation network in Banaoang, Ilocos Sur and the expansion of fishing port facilities in General Santos. Other agricultural support facilities are being considered for financing under this facility.

The visit to China of Agriculture Secretary Arthur Yap in November 2006 brought home a large number of agricultural cooperation agreements including the following:

Agreement Between the Department of Agriculture and the Jiangnan Fruit and Vegetable Wholesale Market Company for the Grant of a 1,000-Square-Meter Space for Philippine Tropical Fruits in China

Agreement Between the Department of Agriculture and the Guangzhou Academy of Agricultural Sciences for a Demonstration Farm of 35 Hectares and Commercial-Sized Agri-Business Land of 2,000 Hectares for Sweet Corn

Agreement Between the Department of Agriculture and Guangzhou Tianhe Yi Xin Fiber Products Co. Ltd. for the Supply of 100,000 Metric Tons of Coco Coir Fiber in 2007

Agreement Between the Department of Agriculture and the Agricultural Department of Guangxi Zhuang Autonomous Region for the Provision by the Philippines of 40,000 Hectares of Agri-Business Lands for Cassava and Sugarcane Plantation

Agreement for the Establishment of an Ethanol Plant in Palawan

The two countries are also looking into cooperation in the area of fisheries after the MOU between the Philippines and China on Fisheries Cooperation was signed during the state visit of the President in September 2004. The agreement established a fisheries commission that will discuss cooperation in fisheries and promote Chinese investments in the Philippine fisheries sector. The First Meeting of the China-Philippines Fisheries Cooperation Joint Commission (FCJC) was held in Manila on 30 March 2005.

The visit to China of Agriculture Secretary Arthur Yap in November 2006 brought home a large number of fisheries cooperation agreements including the following:

Agreement Between the Bureau of Fisheries and Aquatic Resources and Guandong Guangyuan Fishery Group Co., Ltd. For the Setting Up of Mariculture Fish Cages in Tacloban, Leyte

Fishery Agreement Between the Bureau of Fisheries and Aquatic Resources and an Investor from Shandong Province

Agreement Between the Philippine Fisheries Development Authority and the China National Constructional Agriculture Import and Export Corporation (CAMCE) on the Navotas Shipyard Modernization Packages 1-3

Cooperation in Mining

The Supreme Court in its decision of December 2004 upheld the constitutionality of the Philippine Mining Act of 1995 which allows 100% foreign ownership of companies engaged in large-scale exploration, development, and utilization of mineral resources. H.E. President Gloria Macapagal Arroyo has also identified mining as a priority agenda under the Philippine development plan.

Following these developments, the DTI held a mining road show in Beijing from 17-19 January 2005. The Philippine delegation was headed by then Trade Secretary Purisima and DENR Secretary Defensor and they presented opportunities for mining companies in the Philippines, specifically US$7 billion worth of investment opportunities involving 23 projects in the country. Another result of this visit was the signing of the MOU on Mining Cooperation between the DTI and China’s Ministry of Commerce (MOFCOM) by DTI Undersecretary Elmer C. Hernandez and MOFCOM Assistant Minister Chen Jian on 18 January 2005.

The delegation of Secretary Purisima and Secretary Defensor managed to invite several Chinese mining firms to the International Mining Conference in Manila which was held in early February 2005. China sent one of the biggest number of delegates to this conference. A direct result of this conference was the signing of 11 letters of intent by Chinese companies. Furthermore the DTI and the MOFCOM also signed a MOA creating a technical working group to push for these projects.

Three of the agreements signed during the two state visits were mining-related. These are the business contract worth US$ 312 million on an integrated manufacturing facility in Subic, a US$ 30 million investment for an iron ore facility in Panganiban, Camarines Sur. Chinese companies are also in various stages discussions with Philippine mining firms on investments in mining projects in Benguet and Zambales.

The Philippines won the country award for best mining investment destination during the Mines and Money World Congress in London, which was attended by 1,200 industry leaders from 120 countries involved in mining. Secretary Michael Defensor accepted the award for the Philippines.

The Philippines is trying to attract more tourists from China. On 11 September 2002 the Philippines signed a Memorandum of Agreement on Tourism Cooperation with China to enable the country to take advantage of the vast potentials of the Chinese market. The Philippines was among the first few countries granted "Approved Destination Status" for Chinese tourists in 1993.

During the State Visit of H.E. President Gloria Macapagal Arroyo in September 2004, the "Implementation Program of the MOU on Tourism Cooperation between the Department of Tourism and the China National Tourism Administration" was signed. The DOT also assigned a tourism attaché in China in the latter half of the year, during which 36,203 Chinese tourists that visited the Philippines, representing 1.8% of the total tourist arrivals to the Philippines.

Due to the government’s campaigns in China, opening of new air service links and facilitation measures, tourism arrivals from China have picked up significantly. According to the Department of Tourism, 133,585 Mainland Chinese tourists entered the Philippines in 2006, increasing by 24% compared to the 107, 456 tourists in 2005. The 2005 figure was itself a dramatic increase of 171.5% increase compared to that the same period in 2004. However, while these figures make China the fastest growing source of tourism arrivals in the Philippines, they are but small portion of the 34 million outbound Chinese tourists in 2006, a figure further projected by the World Tourism Organization to swell to 100 million by 2020. The Philippines hopes to target 175,000 Chinese tourists in 2007 increasing current figures by 31%.

Air Services

Following years of air services discussions between Philippine and Chinese aviation authorities, the Philippine Air Lines (PAL) is preparing to commence Manila-Beijing non-stop flights on a thrice-weekly schedule beginning 11 November 2005. The national carrier last flew its Beijing service in 1989.

The resumption of Manila-Beijing non-stop flights is a major breakthrough in efforts of the Philippines to expand aviation links with China. Currently, there are regular flight connections between the Philippines and the cities of Xiamen, Beijing (via Xiamen), Shanghai and Guangzhou (charter service). Air Philippines is preparing to operate regular charter flights between Manila and Chongqing City in central China via Guangzhou beginning October 2005.

Northrail and Southrail

During the official visit of NPC Standing Committee Chairman Wu Bangguo to the Philippines on 30 August to 2 September 2003, Chairman Wu announced China’s commitment to provide a preferential buyers’ credit to the Philippine government to finance the construction of the NorthRail Project - Phase I Section 1 which would run from Caloocan up to Malolos, Bulacan. The Export-Import Bank of China provided a loan in the amount of $400 million to the Department of Finance (DOF) for this project, and an MOU was signed on 30 August 2003 on the sidelines of Chairman Wu’s visit. On 20 October 2006, construction of the Phase I, Section 1 of the Northrail Project started.

The PNR entered into an MOU with the China National Technical Import Export Corporation (CNTIC) and China National Machinery and Import and Export Corporation (CMC) on 15 November 2002. Under the MOU, CNTIC and CMC offered to conduct a feasibility study of a project upgrading the Main Line South from Calamba, Laguna, and its extension to Matnog, Sorsogon, and to implement the project if found feasible. The MOA on the construction of the SouthRail Project was signed on 27 April 2005 between PNR and CNTIC.

On June 5, 2006, the Ministry of Commerce of the People’s Republic of China, NEDA and the Department of Commerce and Industry signed an MOU to cooperate on the rehabilitation and upgrading of the Main Line South Rail Project. The Government of China agreed to identify financing institutions to provide the Philippine Government with a concessional buyer’s loan which shall be utilized to implement Phase I, Section I of the project which will run from Calamba to Lucena. The Chinese Government has committed US$200 million to the project.

Cooperation on Mass Housing

As a result of the RP-China Economic Forum held in the Philippines in June 2006 initiated by Speaker Jose de Venecia, one-million low and middle-cost houses are to be built in three to four years in various parts of the Philippines. Under the Philippine-China Housing Development Program with the financing of the Development Bank of China and other Chinese financing institutions as requested by the NEDA, involving the participation of several Chinese construction companies.

Sunshine 100 Corporation and Anhui International Construction Corporation have been designated by the Chinese government as the implementation agencies for the Philippine-China cooperation on mass housing. The National Housing Authority shall be the Philippine principal for the low-cost housing, while the Philippine Government Housing agencies (HUDCC), local government units and private companies will be the Philippine principals for middle-cost units.

SCIENCE AND TECHNOLOGY

The Scientific and Technical Cooperation Agreement between the Philippines and China was signed on 14 March 1978. Since 1978, thirteen (13) protocols have been signed to implement the agreement. The last was signed only in April 2004. The 13^th Protocol covered 20 projects, 10 for each side, for the period 2004-2006. Among the projects included are those on soil erosion, tropical cyclone tracking, ecosystem reconstruction, robotics, herbal medicines, remote sensing applications, volcanic hazards, among others.

CULTURAL EXCHANGES

Cultural exchanges between the Philippines and China continue to flourish under the aegis of the Philippines-China Cultural Agreement signed on 8 July 1979. To date a total of 12 Executive Programs have been concluded to implement the agreement. The latest Executive Program was signed in December 2002 and covered cultural exchange projects for the years 2002 to 2004. The projects include reciprocal exchanges in culture and arts, education and research, books and publications, and film. The 2005-2007 Executive Program was signed in Foshan City, Guangdong Province in November 2005 at the sidelines of the Asia Cultural Ministers’ Forum.

REGIONAL COOPERATION

ASEAN-China Cooperation

Closer and expanded political and economic ties between ASEAN and China are important dynamics in the steady growth of bilateral ties between the Philippines and China.

The relationship between ASEAN and China can be traced to 19 July 1991 when the Chinese Foreign Minister H.E. Mr. Qian Qichen expressed China's interest in strengthening cooperation with ASEAN at the opening session of the 24th AMM in Kuala Lumpur. In July 1996, China was accorded full Dialogue Partner status at the 29th AMM in Jakarta, Indonesia.

China is actively engaging the ASEAN member countries in both the ASEAN +1 and the ASEAN +3 processes. The major cooperation point between ASEAN and China is the Early Harvest Program (EHP). The Philippines and China have negotiated and agreed on the product lists for the Philippine participation in the EHP. This is expected to support the sustained development of trade cooperation between the two countries.

BIMP-EAGA

The BIMP-EAGA (Brunei, Indonesia, Malaysia, Philippines – East Asia Growth Area) has also become an important platform for cooperation between the Philippines and China. China has given its commitment to support the projects of the grouping, particularly in the fields of agriculture, fisheries, energy and infrastructure development. China sent a high-level trade and investment delegation to the region on 16-28 April 2004, and visited Davao, General Santos, and Saranggani from 26 to 28 April 2004. With the support of the Philippines, China was accorded "development partner" status in BIMP-EAGA.

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He was an alternate member, member of the 12^th CPC Central Committee, member of the 13^th, 14^th and 15^th CPC Central Committees and is a member of the 16^th CPC Central Committee. He was a member of the Political Bureau and its Standing Committee, and member of the Secretariat of the 14^th and 15^th CPC Central Committees and is a member of the Political Bureau and of its Standing Committees, and general secretary of the 16^th CPC Central Committee. He was made an additional vice-chairman of the CPC Central Military Commission at the fourth plenary session of the 15^th CPC Central Committee. He was a member of the Standing Committee of the Sixth National Committee of the Chinese People’s Political Consultative Conference (CPPCC).

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ESTIMATED OVERSEAS IN FILIPINOS IN CHINA
As of 12 October 2005
Submitted by Philippine Embassy, Beijing

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The world's largest democracy and second most populous country has emerged as a major power after a period of foreign rule and several decades during which its economy was virtually closed.

A nuclear weapons state, it carried out a programme of tests in the late 1990s in defiance of world opinion. However, India is still struggling with huge social, economic and environmental problems.

OVERVIEW

The vast and diverse Indian sub-continent - stretching from the mountainous Afghan frontier across to the jungles of Burma - was subject to foreign rule from the early 1800s until the demise of the British Raj in 1947.

But the subsequent partition of the sub-continent sowed the seeds for future conflict. There have been three wars between India and its arch-rival Pakistan since 1947, two of them over the disputed territory of Kashmir. A peace process, which started in 2004, has achieved a fragile rapprochement.

Communal, caste and regional tensions continue to haunt Indian politics, sometimes threatening its long-standing democratic and secular ethos.

In 1984, Prime Minister Indira Gandhi was gunned down by her Sikh bodyguards after ordering troops to flush out Sikh militants from the Golden Temple in Amritsar.

And in 1992, widespread Hindu-Muslim violence erupted after Hindu extremists demolished the Babri mosque at Ayodhya.

Independent India's first prime minister, Jawaharlal Nehru, dreamed of a socialist society and created a vast public infrastructure, much of which became a burden on the state.

From the late 1980s India began to open up to the outside world, encouraging economic reform and foreign investment. It is now courted by the world's leading economic and political powers, including its one-time foe China.

The country has a burgeoning urban middle class and has made great strides in fields such as information technology. Its large, skilled workforce makes it a popular choice for international companies seeking to outsource work.

India launches its own satellites and plans to send a spacecraft to the moon. It also boasts a massive cinema industry; the films that it produces are among the most widely-watched in the world.

But the vast mass of the rural population remains illiterate and impoverished.

Their lives continue to be dominated by the ancient Hindu caste system, which assigns each person a fixed place in the social hierarchy.

FACTS

• Population: 1.1 billion (UN, 2005)
• Capital: New Delhi
• Area: 3.1 million sq km (1.2 million sq miles), excluding Indian-administered Kashmir (100,569 sq km/38,830 sq miles)
• Major languages: Hindi, English and 17 other official languages
• Major religions: Hinduism, Islam, Christianity, Sikhism, Buddhism, Jainism
• Life expectancy: 62 years (men), 65 years (women) (UN)
• Monetary unit: 1 Indian Rupee = 100 paise
• Main exports: Agricultural products, textile goods, gems and jewellery, software services and technology, engineering goods, chemicals, leather products
• GNI per capita: US $620 (World Bank, 2005)
• Internet domain: .in
• International dialling code: +91

LEADERS

President: APJ Abdul Kalam

APJ Abdul Kalam, a scientist and the architect of the country's missile programme, was sworn in as India's third Muslim head of state in 2002.

Indian presidents have few actual powers, but they can decide which party or individual should form the central government after general elections.

Prime minister: Manmohan Singh

Manmohan Singh became prime minister in May 2004 after the Congress Party's unexpected success in general elections.

The party's president, Sonia Gandhi, the widow of former prime minister Rajiv Gandhi, shocked her supporters by declining the top post, apparently to protect the party from damaging attacks over her Italian birth.

Mr Singh said his priorities were to reduce poverty and to plough on with economic reforms. He stated a desire for friendly relations with India's neighbours, especially Pakistan.

During his first year in office the prime minister held together a coalition which included communist allies and ministers accused of corruption. He continued to pursue market-friendly economic policies and oversaw the introduction of nuclear non-proliferation legislation.

But his promised "New Deal" for rural India - an attempt to raise the poorest citizens out of poverty - has still to bear fruit.

Mr Singh made his reputation as a finance minister in the early 1990s, under the Narasimha Rao government, when he was the driving force behind economic liberalisation.

When the Congress Party was voted out of office, Mr Singh became opposition leader in the upper house.

A Sikh born in West Punjab, Mr Singh is a former International Monetary Fund official and governor of India's Central Bank. He was educated at Oxford and Cambridge.

• Finance minister: Palaniappan Chidambaram

• Defence minister: Pranab Mukherjee

Government:

According to the Constitution of India, India shall be a Sovereign, Socialist, Secular, Democratic Republic. India is a republic, with a quasi-federal form of Government and a bicameral parliament operating under a Westminster-style parliamentary system. It has a three-branch system of governance consisting of the Legislature, Executive and Judiciary.

The President, who is the head of state, has a largely ceremonial role. His roles include interpreting the constitution, signing laws into action and issuing pardons. He is also the Commander-in-Chief of India's armed forces. The President and the Vice President are elected indirectly by an electoral college for five-year terms. The Prime Minister is the head of government, and most executive powers are vested in this office. He (or she) is elected by legislators of the political party or coalition commanding a parliamentary majority, and serves a five-year term, incumbent upon enjoying this majority. The constitution does not explicitly provide for a post of Deputy Prime Minister, but this option has been exercised from time to time.

The legislature of India is the bicameral Parliament, which consists of the upper house known as the Rajya Sabha (Council of States), and the lower house known as the Lok Sabha (House of the People). The 245 member Rajya Sabha is chosen indirectly through an electoral college, and has a staggered six year term. The 545 member Lok Sabha is directly elected by a popular vote for a five year term, and is the determinative constituent of political power and government formation. All Indian citizens above the age of eighteen are eligible to vote.

The executive arm consists of the President, Vice-President and the Council of Ministers (the Cabinet), headed by the Prime Minister. Any minister holding a portfolio must be a member of either house of parliament. In India's parliamentary system, the executive is subordinate to the legislature.

India's independent judiciary consists of the Supreme Court, headed by the Chief Justice of India. The Supreme Court has both original jurisdiction over disputes between states and the Centre, and appellate jurisdiction over the High Courts of India. There are eighteen appellate High Courts, having jurisdiction over a large state, or a group of smaller states. Each of these states has a tiered system of lower courts. A conflict between the legislature and the judiciary is referred to the President.

Politics:

Map of India.[2]For most of its independent history, India has been ruled by the Indian National Congress Party (INC). Following its position as the largest political organisation in pre-independence India, the INC, usually led by a member of the Nehru-Gandhi family, dominated national politics for over four decades. In 1975, the government led by Indira Gandhi imposed Emergency Rule across the nation. After emergency was lifted in 1977, and fresh elections were called, a united opposition, under the banner of the Janata Party won the elections and formed a non-Congress government for a short period of time. In 1996, the Bharatiya Janata Party (BJP), a political party with a right wing nationalist ideology, became the largest single party, and established, for the first time, a serious opposition to the largely centre-left Congress. But power was de facto held by two successive coalition governments, with the active support of the Congress. In 1998, the BJP formed the National Democratic Alliance (NDA) along with smaller regional parties, and became the first non-Congress government to sustain a full five year tenure (1999–2004). The decade prior to 1999 was marked by a state of political flux, with seven separate governments formed within that period.

In the 2004 Indian elections the INC returned to power after winning the largest number of seats. The Congress Party formed a government in alliance with several regional parties, known as the United Progressive Alliance (UPA), with the outside support of the Communist Party of India (Marxist) (CPI(M)). The NDA, led by the BJP, currently forms the main opposition. All governments formed since 1996 have required party coalitions, with no single party claiming a majority, due to the steady rise of regional parties at the national level.

India's northern and northeastern states are partially situated in the Himalayan Range. The rest of northern, central and eastern India consists of the fertile Indo-Gangetic plain. Towards western India, bordering southeast Pakistan, lies the Thar Desert. The southern Indian peninsula is almost entirely composed of the Deccan plateau. The plateau is flanked by two hilly coastal ranges, the Western Ghats and Eastern Ghats.

India is home to several major rivers, including the Ganga, Brahmaputra, Yamuna, Godavari, Kaveri, and Krishna. India has three archipelagos – Lakshadweep, off the south west coast of India, a volcanic island chain called the Andaman and Nicobar Islands to the south east, and the Sunderbans in the Gangetic Delta in the state of West Bengal.

The Indian climate varies from tropical in the south to more temperate in the north. Parts of India which lie in the Himalayas have a tundra climate. India gets most of its rains through the monsoons.

India has an economy ranked tenth in the world in terms of currency conversion (GNP), and fourth largest in terms of PPP. It recorded one of the fastest growth rate (8.1%) for the fourth quarter of 2005. India's per-capita income (by purchasing power parity) is US$ 3,200, ranked 125th according to the World Bank. India's foreign exchange reserves amount to over US$ 145 billion. Mumbai is the nation's financial capital, and is also home to the headquarters of both the Reserve Bank of India and the pre-eminent Bombay Stock Exchange. While a quarter of Indians still live below the poverty line, a large middle class has now emerged along with the rapid growth of the IT and service industries.

The Indian economy has shed much of its historical dependence on agriculture, which now contributes about 21% to the GDP. Other important industries are mining, petroleum, diamond polishing, films, textiles, IT and business process outsourcing (BPO) services, pharmaceuticals and chemicals and handicrafts. Most of India's industrial regions are centred around major cities. In recent years, India has emerged as one of the largest players in the software and BPO service industries, with revenues of US$ 17.2 billion in 2004 to 2005. Many small-scale industries provide steady employment to workers in small towns and villages.

While India receives only around three million foreign visitors a year, tourism is still an important but under-developed source of national income. Tourism contributes 5.3% of India's GDP. The actual employment generation, both direct and indirect, is estimated to be 42 million, or about 10% of India's work force. In monetary terms, it contributes about US$4 billion in foreign exchange. India's major trading partners are the United States, Japan, China and the United Arab Emirates.

India's main exports include agricultural products, textile goods, gems and jewelry, software services, engineering goods, chemicals and leather products, while its main imports are crude oil, machinery, gems, fertiliser, and chemicals. For the year 2004, India's total exports stood at US$ 69.18 billion, while the imports were worth at US $89.33 billion.

Demographics:

India is the second most populous country in the world, with only China having a larger population. By 2030, India is expected to surpass China as the world's most populous nation, estimated at 1.6 billion. Language, religion, and caste are major determinants of social and political organisation within the highly diverse Indian population today. Its biggest metropolitan agglomerations are Mumbai (formerly Bombay), Delhi, Kolkata (formerly Calcutta) and Chennai (formerly Madras).

India's literacy rate is 64.8%, with 53.7% of females and 75.3% of males being literate. The sex ratio is 933 females for every 1000 males. Work Participation Rate (WPR) (the percentage of workers to total population) stands at 39.1%, with male WPR at 51.7% and female WPR at 25.6% India's median age is 24.66, and has a growth rate of 22.32 births per 1,000.

India has no state religion. Although 80.5% of the people are Hindus, India is also home to the third largest population of Muslims in the world (13.4% see Islam in India), after Indonesia and Pakistan. Other religious groups include Christians (2.3%), Sikhs (1.84%), Buddhists (0.76%), Jains (0.40%), Jews, Zoroastrians, Ahmadi-muslimss, and Bahá'ís.

India is home to two major linguistic families, the Indo-Aryan (spoken by about 74% of the Indian population) and Dravidian (spoken by about 24% of the Indian population). Other languages spoken in India come from the Austro-Asiatic and Tibeto-Burman linguistic families. The Indian constitution recognises 23 official languages[1]. Hindi, along with English are the languages used by the Central Government for official purposes. Two classical languages native to the land are Sanskrit and Tamil. The number of mother tongues in India is as high as 1,652.

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