CAPITALIST CHINA

Jonathan Woetzel, author of Capitalist China: Strategies for a Revolutionized Economy, believes there is plenty of room for Philippine investors in China. The Chinese export machine creates a supply chain opportunity that the Philippines needs to find a way to fit into.

In the Philippines to launch his book, Mr Woetzel, a director of McKinsey in China, addressed prominent members of the Philippine business community. In the meeting he told them that despite the cheap labor and the fact that most companies are relocating plants to China, not all components of China-made products are from there.

Mr Woetzel argued that China's export growth comes at the expense of Japan, not Southeast Asia. And he warned that the only real threat from China would come if the Philippines continued to adopt a vertically integrated model and didn't participate in the region's supply chain. He said the Philippine business community and government have to realize that it can't be good at everything and start to focus on developing the sectors where the Philippines has a competitive edge.

He also noted that the proposed China-ASEAN free trade area will boost the notion of a regional supply chain and create trade and investment opportunities for the Philippines.

Mr Woetzel pointed out that further opportunity exists in growth areas in China - that entering the Chinese market was 'easy' as long you come in prepared. He claimed most problems are due to strategy and implementation. And that it was important to remember that China is still a developing country.