Early history of Philippines-China economic relations has shown that there have been many instances when good political relations often led to good economic relations. Conducted in a friendly manner, under the aegis of what the Chinese imperial court called “Vassal tributary missions,” it has benefited the Filipino traders on the whole. Recent history has revealed that President Marcos has followed good political relations with the PRC. However, bad political relations have characterized Philippine colonial history from17th-19th century. Spanish colonial policy has been discriminatory against the Chinese but regardless of all kinds of impediments placed on Chinese traders, these have not necessarily impede business relations. Vigorous commercial relations have continued since they have served the needs of the rival parties. Spanish colonial administrators have learned to co-exist and cooperate with the Chinese who have been indispensable economic instruments in preserving and sustaining the colonial economy. Economic relations with China have been suspended during WW II and have continued until 1970. Trade with China has become more vigorous after diplomatic relations in 1975. During the Aquino administration, when it has focused its attention on Taiwan, trade volume with China has plummeted extensively. The 1995-1998 China-Philippine trade and investment incentives can bring about good economic relations despite political tensions brought about by conflicting claims over the Mischief Reef.
