Made in China

God created the world; everything else is made in China.

This joke became popular amid a reality in the global economy: even products supposedly made in other countries are likely to have some components made in China, or by Chinese companies based for example in Taiwan or elsewhere.

This complicates any effort to ban Chinese products, parts or services in the interest of national security or fair trade practices.

Last week, Montana became the first state in the US to completely ban TikTok, a subsidiary of wholly Chinese-owned company ByteDance. Elsewhere in the US, accessing TikTok is banned only in government offices.

So far I haven’t heard of similar initiatives in our country where TikTok is hugely popular and was widely used in the 2022 election campaign by the winning team.

Those concerned about national security may in fact want to ban the use of Zoom for government meetings. California-based Zoom’s largest shareholder and founder is a Chinese immigrant who has obtained US citizenship. The app is said to widely use Chinese technology.

During the Duterte administration, Francisco Ashley Acedillo had urged a ranking official to stop using Zoom at least for critical discussions in government, warning about “Zoom bombing.”

Acedillo, a former Magdalo party-list congressman, is the national president of the Philippine Institute of Cybersecurity Professionals.

Under its intelligence laws, Beijing requires all its citizens and Chinese-owned companies including those operating overseas to assist the state in intelligence gathering.

Acedillo says that in these matters, a dose of paranoia can be healthy for the Philippines.

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There were no concerns about China when the government decided to privatize power transmission. The National Grid Corp. of the Philippines accepted the State Grid Corp. of China as the technical partner in a foreign consortium that obtained a 40 percent stake in NGCP – the maximum allowed by the Constitution for foreign ownership in public utilities.

Lawyer Cynthia Alabanza, NGCP spokesperson, said the company’s management team is “100 percent Filipino, from top to bottom,” exercising day-to-day control over NGCP operations.

She recalls that the government “was very eager to privatize” national power transmission. Four rounds of competitive biddings were conducted, during which there were always foreign companies participating.

“It just so happens,” Alabanza said, that the best bid came from the group that included the Chinese. “Were we warned that this was going to be unacceptable? No... We had no inkling at that point that this would be a sore point.”

“This was a business decision. It wasn’t political. It wasn’t negotiated,” she stressed.

NGCP cleared the bidding process and participants with the government, and Congress granted the franchise.

She said transmission services have improved and rates have gone down following privatization, based on performance metrics set by the Energy Regulatory Commission.

Addressing criticisms about “unconscionable” corporate dividends paid out to shareholders amounting to P187.8 billion over 10 years, she pointed out that NGCP rates are “highly regulated by the government.”

“When you’re investing in the billions and you earn, say, in the thousands, maybe that’s something people should be concerned with because then it means you’re not a very good businessman,” she told “The Chiefs” on One News last week. “Really, the idea of privatization was to make it profitable enough so that it wouldn’t have to rely on subsidies from the public coffers.”

She added: “I don’t know why earning money has become so demonized.”

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Alabanza does not completely rule out the NGCP system being undermined technically, but she stresses that the company employs international best practices to mitigate such risks.

Acedillo told The Chiefs that “by and large, NGCP knows its stuff... they have the right mindset and attitude about how to secure their system.”

To undermine the NGCP system, he said, “it would have to be a very persistent, a very sophisticated and very technologically advanced attacker, and that can only be a country. It cannot be a small group. It cannot be a lone wolf hacker.”

Communist China became an economic powerhouse when it embraced capitalism, proving better at it than even the original capitalist states.

The world was so eager to do business with China (Massive market! Cheap labor! Cheap everything!) that the West readily ignored China’s human rights record – and generally still does.

A common explanation is that engagement with China – especially on the economic front – produces better results all around than isolating it or confronting Beijing on thorny issues.

With China rapidly developing into the second largest economy, however, it was inevitable that it would also want commensurate military power. And thanks to all that economic engagement, it had the resources for building up its military.

Under Hu Jintao, China reassured the world of its “peaceful rise,” that its military buildup should be no cause for concern. I swallowed the line – until the Chinese took over Scarborough Shoal.

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Today, with Chinese-made artificial islands dotting the South China Sea, Xi Jinping no longer bothers mouthing platitudes about peaceful development. And he is challenging US military and economic dominance.

The US and some of its key allies are also openly regarding the Chinese as a threat on multiple fronts, with even business and economic activities deemed weaponized.

Rules are being passed, banning US companies from using Chinese-made components in vulnerable and mission-critical systems such as telcos, transport and energy. The US is bringing back microchip manufacturing to America.

In the Philippines, the NGCP is a focus of anti-Chinese sentiment.

“Is there an incentive for China to undermine us? Absolutely!” Acedillo told us. “They are perfectly capable of doing this.”

The question is whether the Chinese will do it.

Except for the ownership limits set in the Constitution, there’s no prohibition or even limitation in doing business specifically with the Chinese. Every administration including the current one in fact invites the Chinese to invest in the Philippines, and encourages stronger bilateral trade ties.

Malacañang said President Marcos is open to the government retaking  the NGCP “if necessary,” but he quickly shifted gears as he asked about the possible replacement. Bad service made the government get out of the business. Does the country want to return to that?

Acedillo calls for a pragmatic approach, given “the current reality.” The government, he says, can take its cue from what other countries are doing.

“We should have a healthy sense and amount of paranoia,” he said, while stressing the need to distinguish this from “paranoia bordering on hysteria.”