Typhoon Yolanda: Cheapskate China Wins No Friends in Philippines

As hundreds of thousands of Filipinos struggled to find food, water, shelter and the bodies of loved ones in the wake of Typhoon Haiyan, China quickly dipped into its world-leading $3.7 trillion of currency reserves and came up with … all of $100,000.

That was Beijing’s first miserly offer of aid to the storm-tossed Philippines. By Thursday, an international outcry over China’s stinginess shamed it into upping its pledge to a modest $1.6 million worth of relief materials such as tents and blankets. But the damage was already done.

“It’s very hard to call for de-Americanization and then leave your wallet at home when there’s a human disaster the scale of the typhoon in the Philippines,” says Ian Bremmer, president of Eurasia Group in New York. “Yes, China is a poor country. Yes, they have troubled relations with the Philippines. But this sits badly with anyone thinking about China’s rise in the region.” If he were advising President Xi Jinping, Bremmer says, “I’d push for major humanitarian aid to the Philippines.”

Instead the bulk of that aid is coming from elsewhere: more than $28 million from Australia, $20 million from the U.S., $17 million from the European Union, $16 million from the U.K., $10 million from Japan, $5 million from South Korea, $4 million from the Vatican, $2 million from Indonesia, and huge amounts from official agencies -- the United Nations alone started a $300 million aid appeal.

China was clearly stung by the critical news coverage. South Korean figure skater Kim Yu-na herself gave $100,000 -- about enough to buy nine bottles of a 2006 Romanee-Conti. Even the new Chinese offer is rather paltry. New Zealand’s $167 billion economy is a rounding error compared with China’s $8.4 trillion one. Yet officials in Wellington have coughed up $1.7 million, even more than the People’s Republic.

Insulting Sum

Why the insultingly small sum for a geopolitically vital nation of 106 million people that by many measures is much poorer than China? Manila’s close ties with Washington have always worried China. But this is personal. Philippine President Benigno Aquino refuses to bow to China’s territorial claims in the South China Sea, and enraged Beijing by daring to challenge its maritime claims before a UN-endorsed tribunal. Aquino also demands that China treat the Philippines, one of Asia’s oldest democracies, as an equal, not a subordinate.

Nations hold grudges, of course. But China’s actions this week dramatically undercut what had been a very deliberate and strenuous -- and supposedly successful -- recent charm offensive. After President Barack Obama skipped out on a summit of Asia-Pacific leaders last month, Xi and Premier Li Keqiang gleefully toured Southeast Asian capitals, handing out investment deals to show how generous China could be with its neighbors, how eager it was for friendly relations.

The Philippines crisis offered an opportunity for China to show it had developed into a mature, cooperative nation and to win goodwill across the region. As a matter of fact, on Friday, Chinese and U.S. troops will even train together for the first time in Hawaii, as part of a drill in which the two nations cooperate in a humanitarian relief operation in a third country. Why not jump in and seek to cooperate in the enormous international rescue effort in the Philippines?

Instead, officials in Beijing find themselves evading awkward questions about their miserliness. Perhaps trying to save a smidgen of face, Beijing first upped its offering to $200,000 through the Red Cross. That was still less than half of the $450,000 the Philippines gave China after the 2008 Sichuan earthquake. Even now, China’s total offer is far less than the $4.88 million donated to Pakistan after an earthquake there two months ago.

China’s normally quiescent state-run media worried about the fallout. “China’s international image is of vital importance to its interests,” the usually gung-ho Global Times said in an editorial Tuesday. “If it snubs Manila this time, China will suffer great losses.”

Soft Power

One reason China’s efforts to develop its soft power have failed is the utilitarian way Beijing approaches the rest of the world. Instead of using culture, adept diplomacy and trashy movies to seduce other countries, China hands out cold, hard cash. All the investment poured into railways in Indonesia, tunnels in Brazil, power grids in Cambodia, hydroelectric projects in Laos, bridges in Vietnam, roads in Zambia, factories in Malaysia, airports in Myanmar, and mining rigs in Uzbekistan comes with a high cost. In return, China demands complete docility. That’s the message being sent to the Philippines now.

Arvind Subramanian, author of the 2011 book “Eclipse: Living in the Shadow of China’s Economic Dominance,” says China is going to be a “peculiar kind of superpower,” one whose attraction is more materialistic than heartfelt. “It won’t have the soft power the U.S. has -- people wanting to come, people wanting to live, people wanting to emulate it,” he told me in Hong Kong last week. “That soft power is lacking, but it will not impede China.”

I’m not so sure. If I were Aquino, I’d tell China to keep its money; maybe Xi could use it to hire a public-relations firm. As badly as the Philippines needs the help, so does China’s image.
(William Pesek is a Bloomberg View columnist.)

To contact the writer of this article: William Pesek in Tokyo at wpesek@bloomberg.net.
To contact the editor responsible for this article: Nisid Hajari at nhajari@bloomberg.net

source:  Bloomberg Column by William Pesek»

William Pesek is based in Tokyo and writes on economics, markets and politics throughout the Asia-Pacific region.