Here’s a quiz. How often in these past weeks have you read about the duplicitous Chinese tricking other governments with false investment promises? Quite a lot, probably, given the volume of reportage on the supposed pullback of Chinese cash in the Philippines. These reports argue that China’s US$24 billion commitment to the Philippines, comprising US$15 billion in foreign direct investment (FDI) and US$9 billion in aid, has barely materialised since an agreement in October 2016 in which the funds were committed.

These reports also allude to the Philippines’ decision to “give up” its South China Sea claims in exchange for investments, suggesting it was then left high and dry as China turned off the tap. To be sure, the Duterte administration did abandon the Philippines’ previous position on The Hague tribunal verdict that rejected Chinese claims based on its “nine-dash line”.

The Chinese have since been heavily militarising some of the islands, Filipino fisherfolk have faced harassment and China has gradually increased its presence in the area. But linking these political manoeuvrings to delays and cancellations of Chinese FDI and aid projects as part of Beijing’s “plan” to elicit geopolitical concessions overlook the real factors that impact investment.

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Investment cancellation and delays occur mostly due to factors in the host state. For example, a hydropower project by Power China Guizhou and Philippines Greenergy Development Corp encountered trouble acquiring funds from shareholders because of the uncertainty regarding the recently signed Bangsamoro Basic Law (BBL) that allows a high level of autonomy, including some aspects of sharia law, to the Muslim areas of the southern Philippines. All major investment projects in Mindanao province have been delayed as a result of the new arrangement, as investors are still figuring out the implications for them.

A US$780 million proposal to raise four islands in Davao was found unviable after a year-long feasibility study that revealed the project’s enormous social, environmental and economic cost. In this particular case, the local government decided to cancel the deal.

A deal between Global Ferronickel, the third-largest nickel ore producer in the Philippines, with Baiyin Nonferrous Group, a Chinese copper supplier, was put on hold due to a moratorium on new mining operations that would make any extractive investment fruitless. This six-year ban on new large-scale mining projects has hindered new mining investments from all companies and countries.

Delays or cancellations do also occur on the side of the investor but unless one can furnish proof China has deliberately withheld funding, treating these delays as Chinese betrayal is simply spiteful speculation without empirical proof.

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Similarly, a careful study of many of the aid projects that did not materialise shows a similar pattern of procedural factors rather than wilful withholding. The total number of aid projects were cut down to three priority projects in January 2017. Some projects in the US$9 billion pledge were cancelled, some were delayed, and others were placed in a queue. Philippine government data shows Chinese aid projects are making some progress, with two signed, four approved, and 14 in the pipeline.

The media reportage of stalled Chinese projects ignore that FDI and aid memorandum of understandings (MOUs) are often likely to be cancelled, modified, or delayed after the initial signing process – and this is not unique to China. The Duterte administration signed a US$6 billion MOU for FDI from Japan, a US$1.2 billion MOU with India, and a US$650 million MOU with Saudi Arabia and Qatar.

Data from the Philippines central bank, BSP, shows a huge discrepancy between the committed and actual amount. Signed in January 2018, the MOU with India has resulted in just US$600,000 so far. The MOUs with Saudi Arabia and Qatar, which pledged US$465 and US$175 million in April 2017, have resulted in just US$3.5 million in total. And Japan’s October 2017 commitment has translated into only US$48.3 million.

While it is difficult to tell whether these actual investments comprise deals negotiated in the MOUs, these low numbers typify the low commitment-actualisation ratio when it comes to FDI, Chinese or otherwise.

There is also a fundamental accounting error when it comes to supposed Chinese commitments in the Philippines. The US$24 billion pledge of investment is misidentified as FDI solely from the People’s Republic of China (PRC). Much of the Chinese FDI coming to the Philippines is actually from Hong Kong. Many Chinese state-oriented enterprises relocate to or create subsidiaries in Hong Kong to take advantage of the liberal currency environment, so when they invest abroad, their investments are recorded under “Hong Kong” rather than PRC.

Between June 2016 and April 2018, deals between China and the Philippines resulted in US$1.02 billion of FDI in the Philippines, reaching nearly 85 per cent of the total amount registered during the previous Philippine administration. This indicates that even if most of the deals in the US$15 billion of promised FDI were delayed or cancelled, Chinese SOEs and private companies continue to invest heavily in the Philippines.

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In sum, it’s wrong to fault China and the Duterte government for investment delays and cancellations. Rather, they should be criticised for falsely equating investment commitments and actualisation, and then marketing the deal to generate political capital. In states struggling to develop capacity, such as the Philippines, delays or cancellations of foreign investment or aid deals are common. Indeed, the more complicated and technical the foreign investment and aid projects, the more likely are delays and cancellations.

Alvin A. Camba is a non-resident fellow at the Alberto Del Rosario Institute and a research affiliate at the Middle Eastern Institute in the National University of Singapore