Manila, Hanoi, and the South China Sea: The Political Economy of Chinese Capitalism

• In Event: 066 - Section on Political Sociology Roundtables (one-hour)
  In Refereed Roundtable: Table 08. Political Economy

Abstract

Numerous observers, researchers, and political analysts, as well as from actual treaties and political pronouncements from heads of states, point to the divergent responses of the Philippines and Vietnam, two countries in open diplomatic and territorial dispute with the People’s Republic of China (PRC), over the suzerainty of South China Sea. A belligerent Philippines and a diplomatic Vietnam, Chinese investments in both countries are however similar but concentrated in two different sectors—natural resource production in the Philippines and manufacturing in Vietnam. If the involvement of China is considerable in the economic life of both countries, what accounts for the divergent responses of Philippine and Vietnamese elites to Chinese aggression in the South China Sea?
Deriving from Nicos Poulantzas’ internationalization of the state, I argue that the concentration of Chinese capital in Philippine primary resource sector and Vietnamese manufacturing explain the variation of their foreign policy approach towards the South China Sea. Vietnamese manufacturing, creating 33% of the country’s GDP, generates the highest employment rates, sustainable taxes, and a predictable political order. Conversely, Chinese capital has largely been in the primary resource sector in the Philippines. The place of primary resource production in Philippine national economic life, creating a measly 7-8% of GDP annually from 2000-2008, is not significant because the economy has been dependent on manufacturing and services where there is a heavy concentration of American, Japanese, and Korean capitals.

Author

• Alvin Almendrala Camba, Johns Hopkins University