China in our future
In a recent visit to our public market in Los Baños, Laguna, I decided to explore the shops surrounding the market itself. I found myself in a store surprisingly much larger inside than its unassuming facade would suggest, selling various kinds of cheap China-made goods including foodstuffs, clothes, personal articles and household fixtures. There seem to be numerous such stores in various parts of the country now, selling almost exclusively those cheap, everyday China-made goods. Some of them are rather large establishments that appear to be part of a chain of large variety stores. I’ve seen a few of these in different cities around the country, and have shopped in at least a couple of them. There are actually good buys to find in these places, especially items for which quality is not critical.
What struck me about that inconspicuous store in our town’s marketplace was how practically everyone in the store sounded like recent immigrants who spoke little Filipino or English. Recalling the recent news on the apprehension of hundreds of illegal Chinese workers in a Clark Freeport zone casino, I’ve been led to wonder if these shop workers were likewise undocumented aliens—and to what extent we may have been “invaded” by many other such workers elsewhere in the country. What it all suggests to me is that China is in fact already all over us, perhaps more than most of us realize. With or without our territorial issues with this giant of a neighbor, how we manage our political and economic relationship with it is certainly a critical element of our foreign policy, and the tack President Duterte has taken on this could well reflect this inescapable reality.
Whether we like it or not, China’s presence will be prominent in our future—as a nation, as an economy, or as individuals. It already is—as these observations show—but promises to be even more so. Neither are we unique in this, and it’s far from surprising. The sheer size of China and the sheer number of its people (making up nearly one-fifth of humanity), the added mobility that cheap air travel brings, and China’s rapid economic growth over recent decades make their prominence worldwide quite natural.
More significantly, the outlook for the major economies of the world, and indeed the global economy, is now inextricably tied to the fate of the Chinese economy. On this, most analysts are projecting increased difficulties, if not outright crisis. After averaging annual growth at a spectacular 10.4 percent in 1990-2010, the erstwhile juggernaut has lately slowed down to just above 6 percent. Its recent challenges are well-known. On the supply side, its cost competitiveness has been seriously impaired by substantial wage increases. On the demand side, world exports have shrunk, drastically reducing the export giant’s markets, and leading to substantial oversupply and overcapacity in its manufacturing industries. This is a problem not just for China, but for many other economies linked to it as well, big and small. For one thing, so-called “resource economies”—large ones like Australia, Canada and Brazil and smaller ones like the Philippines and Indonesia—which have been thriving on feeding China’s burgeoning manufacturing sector, now face dampened growth. The International Monetary Fund projects global economic growth to lose 1.5 percentage points in the event of a China standstill.
But others remain bullish on China’s economic prospects, especially in light of its new initiatives, including the aggressive One Belt, One Road and the Asian Infrastructure Investment Bank. Both will bolster physical links with, hence wider access to, Europe and Africa, not only for China itself but also for the rest of Asia. Meanwhile, China is strategically moving on to higher-level, knowledge-based industries, aiming to take over technological supremacy from the West. Whether it succeeds in this or not, it’s a matter of time that China will become the world’s largest economy. How well we are linked to it and use it to our advantage will spell our own economic future, and the welfare of Filipinos of the coming generation.
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