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Chinese Premier Ends Philippine Visit, After Signing Billions of Dollars in Projects

The Chinese premier is wrapping up a 24-hour visit to the Manila during which his country signed agreements to fund billions of dollars in development projects for the Philippines. Douglas Bakshian reports from Manila that the visit underscores the growing Chinese influence in the Philippines and the region.

Premier Wen Jiabao's visit to Manila was relatively low key, but during the trip he witnessed the signing of several development and trade deals worth billions of dollars.

Mr. Wen stopped in Manila for an overnight stay after attending the East Asia Summit in the Philippine city of Cebu on Monday.

Among the agreements between Beijing and Manila signed late Monday and on Tuesday was a $3.8 billion project to develop one million hectares of land in the Philippines to grow corn, rice and sorghum, some of which could be exported to China.

Food security is a concern in China as farmland comes under pressure from expanding cities and grain output is threatened. The country already is a big market for Philippine fruit.

Other agreements include financing for construction of a train line running north of Manila, and rehabilitation of an existing line to the south. In addition, the governments agreed on a $500 million loan for the Philippines from the Export and Import Bank of China.

Experts say China imposes few of the conditions required by traditional international lending agencies such as the World Bank and the Asian Development Bank, or ADB.

"China is quite free with regard to its money and it's definitely placing this money everywhere in the world where it can get political and economic advantages, particularly here in Southeast Asia," said Ramon Casiple, who is with Manila's Institute for Political and Electoral Reforms. "The advantage of course is that it is not as restricted as the usual money coming from Western and other sources."

In another sign of Beijing's growing influence, China recently took over a water financing deal in Manila from the ADB. The Philippine water agency withdrew its application for a $70 million loan from the ADB to repair an aqueduct that supplies most of Manila's water, after deciding to borrow from China. President Gloria Arroyo last month said the ADB should ease conditions on its assistance, arguing this would allow developing countries better enjoy its aid.

As Chinese economic power and influence grow, Casiple says, it could affect the Philippines' relations with other nations.

"The Philippines has a history of good relationships with Western countries, particularly the U.S. And the U.S. and other Western countries are quite competitive with China and this may affect the trade relationship with the Philippines. Other than that, the political situation would tend to create more tensions in the region because the relationship of China with the rest of the world is not that good," said Casiple.

Local news reports say the Philippines, over the past year or so, has presented China with a list of $32 billion in projects for possible funding.