The Philippines intends to offer the most favorable conditions to 15 China-based Japanese companies in a bid to invite them to move to the Philippines, says an article in Beijing News Daily. Excerpts:

It is natural for enterprises to seek lower production costs. Chinese people should not overplay the tensions between China and Japan in this incident.

The rising costs of labor, environment, resources and intellectual property rights protection in China do force some manufacturing industries to relocate to other countries.

Yet, China's strength with its comprehensive manufacturing industrial system, from raw material supplies to marketing, is still superior to the other competitors. No company can afford to lose China as one of the largest markets in the world.

Since China is trying its best to upgrade its industrial structure, Chinese enterprises should take this opportunity to increase their input in research and development and move to higher links along the global production chains. Or they will be eliminated.

So foreign companies' relocation is the necessary result of China's development. Lower-end manufacturing industries will certainly leave China if the country can successfully transform its economic structure.

The biggest challenge for China is not to compete with the Philippines in terms of labor costs, but to promote its enterprises to learn from their advanced counterparts from the industrial countries to create more technology breakthroughs and patents.