MANILA, Philippines — The increasingly bitter war of words between Defense Secretary Gilberto “Gibo” Teodoro Jr. and the Chinese Embassy has entered a new and potentially more explosive phase, with the defense chief accusing Beijing’s diplomatic mission of effectively acting as a “public relations firm” for businessman Tony Yang while refusing to confront allegations surrounding his business interests in the Philippines.
The confrontation centers on Philippine Sanjia-Steel Corporation, a steel facility in Tagoloan, Misamis Oriental that Philippine authorities raided in May 2026.
Authorities arrested 69 Chinese nationals and one Filipino during the operation. Philippine officials said the foreign nationals were allegedly undocumented and were working around materials that may have posed health and environmental risks. Five company incorporators were also reported to have remained at large following the raid.
Teodoro has repeatedly linked the facility to Tony Yang, also known as Yang Jianxin and Antonio Lim, the elder brother of Michael Yang, who served as an economic adviser during the Duterte administration.
But what began as a law-enforcement investigation has evolved into something much larger: a diplomatic confrontation over alleged criminal activity, immigration violations, environmental concerns, foreign interference and the treatment of Chinese nationals in the Philippines.
Teodoro: Why defend Yang instead of answering the allegations?
Teodoro’s latest attack followed repeated criticism from the Chinese Embassy over the Sanjia raid and the detention of Chinese workers.
The defense chief accused the embassy of focusing on the treatment of those arrested while avoiding what Philippine authorities say are the central questions surrounding the steel operation.
His criticism effectively portrayed the diplomatic mission as defending Tony Yang and his associates rather than dealing with allegations being investigated by Philippine authorities.
The Chinese Embassy has strongly rejected Teodoro’s accusations.
In an August 16 statement, it said Teodoro’s claims were “completely unfounded” and accused him of distorting the facts.
The embassy also questioned why the Armed Forces of the Philippines became involved in what it characterized as a law-enforcement matter and asked why Chinese workers were arrested while Filipino workers were reportedly released. It further denied allegations that Chinese diplomatic officials improperly interfered with Philippine law enforcement.
The Department of National Defense responded by accusing the embassy of evasiveness, saying its statements failed to answer the allegations being raised by Philippine authorities.
Tony Yang was already facing criminal cases before the Sanjia raid
Tony Yang’s problems with Philippine authorities did not begin with Sanjia.
The National Bureau of Investigation said its Northern Mindanao office had investigated Yang after determining that Yang Jianxin, a Chinese national, allegedly obtained and used a Philippine birth certificate under the identity “Antonio M. Lim.”
According to the NBI, investigators accused him of using Philippine identities or aliases in establishing several corporations, including OroOne Inc., Philippine Sanjia Steel Incorporated and Misamis Oriental Sand and Gravel Corporation.
The NBI filed cases involving three counts of falsification of public documents, three counts of perjury and one violation of the Anti-Alias Law.
Arrest warrants were issued in November 2024, and Yang was subsequently arrested in Pasay City in July 2025 in connection with those cases.
The Department of Justice had earlier indicated that Philippine authorities preferred pursuing criminal cases against Yang rather than immediately deporting him, arguing that prosecution could establish accountability and serve as a deterrent.
Sanjia had already attracted scrutiny over alleged POGO links
Questions surrounding Philippine Sanjia-Steel also predated the May 2026 raid.
The government-run PHIVIDEC Industrial Authority said in 2024 that it was examining the company after information emerged linking it to alleged Philippine offshore gaming operator activities.
Sanjia was identified during congressional investigations as being associated with Tony Yang, although the company previously said Yang was no longer its president and denied allegations that it employed undocumented Chinese workers or stored contraband.
A House committee report released later recommended further investigation into the extent of Tony Yang’s alleged involvement with illegal POGO hubs and networks associated with Michael Yang and other personalities.
Authorities allege hazardous materials and environmental violations
The May raid dramatically expanded the investigation beyond immigration and POGO-related concerns.
Philippine officials alleged that Sanjia operations involved potentially hazardous or contaminated materials.
The Philippine News Agency reported that investigators said scrap material allegedly imported from China contained radioactive elements including uranium-238, thorium-228 and thorium-232.
Authorities also said the Chinese nationals arrested could face possible cases involving nuclear safety regulations, consumer protection laws, labor rules and immigration laws.
Those allegations remain subject to investigation and judicial proceedings.
Teodoro has maintained that the enforcement campaign is not directed at Chinese people as a nationality.
He has framed the issue instead as a crackdown on unlawful activities that, in his view, damage Philippine institutions and public safety.
Beijing questions why Chinese workers were targeted
China, however, is presenting a sharply different narrative.
The Chinese Embassy has asked why ordinary Chinese employees were arrested instead of focusing solely on company executives and people directly responsible for management.
It also questioned the AFP’s role in the operation and why some detainees were reportedly transported to Manila using a military aircraft.
Those questions have become central to Beijing’s claim that Chinese nationals may have been treated unfairly.
Philippine authorities, meanwhile, say the operation was conducted under legal authority and as part of a broader inter-agency investigation.
The dispute therefore now involves two competing narratives: Manila says it is enforcing Philippine law against alleged wrongdoing, while Beijing says its nationals deserve protection against discriminatory or improper enforcement.
Another controversy hangs over the Chinese Embassy: alleged Philippine influence operations
Teodoro’s latest reference to the embassy as a “PR firm” carries additional political weight because Beijing’s diplomatic mission has already been caught in another controversy involving public relations activities in the Philippines.
In April 2025, then-Senate Majority Leader Francis Tolentino presented documents that he said showed the Chinese Embassy had contracted Philippine-based InfinitUs Marketing Solutions Inc. to conduct online influence activities.
Tolentino alleged that the arrangement involved so-called “keyboard warriors” and fake social-media identities designed to promote Beijing-friendly narratives and influence Filipino public opinion.
He also presented a ₱930,000 Bank of China check paid to InfinitUs.
The PR company disputed the accusation that it operated troll farms. It said the alleged service agreement presented during the Senate investigation was unauthenticated and unfamiliar to the company.
However, InfinitUs acknowledged that the ₱930,000 payment was genuine, saying it represented lawful professional services provided to a diplomatic institution.
That controversy is separate from the Sanjia investigation, but it gives Teodoro’s description of the embassy as a “PR firm” an unmistakably sharper political edge.
China sanctions Teodoro as tensions escalate
The confrontation has also become personal.
In June 2026, Beijing imposed sanctions on Teodoro, his wife and child, prohibiting them from entering mainland China, Hong Kong and Macau and restricting Chinese organizations from doing business with them.
China said the sanctions were connected to statements and actions that harmed Chinese interests.
Teodoro responded that the measures would not stop him from raising issues involving the West Philippine Sea or what he described as illegal activities associated with Chinese interests in the Philippines.
He has also alleged that senior Chinese Embassy officials attempted to intervene in matters connected with Sanjia.
The embassy has denied accusations of improper intervention.
The bigger question is no longer just about one steel plant
What started as a raid on an industrial facility in Misamis Oriental has now exposed a much broader confrontation.
There are questions about how foreign nationals allegedly obtained Philippine identities.
There are questions about corporations allegedly established using those identities.
There are ongoing investigations involving former POGO networks.
There are allegations involving unsafe industrial operations and environmental violations.
And now there is an increasingly hostile diplomatic dispute over whether China is merely protecting the legitimate rights of its citizens — or shielding individuals accused by Philippine authorities of breaking Philippine law.
That distinction matters.
Diplomatic missions have an obligation to assist and protect their nationals abroad. But Philippine authorities also have the sovereign right to investigate and prosecute foreigners accused of violating Philippine laws, provided due process is observed.
Ultimately, the most important answers will not come from increasingly heated statements issued by either side.
They will come from evidence presented before Philippine courts and investigative bodies.
And as investigators dig deeper into Tony Yang’s businesses, corporate identities and alleged connections, the Sanjia controversy may prove to be only one piece of a much larger network authorities are still trying to understand.
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