With the passage of laws and pressure from both Democratic and Republican parties forcing a review of Hongkong’s special economic status with the US, confrontational pressure is put on the Central government of the Peoples Republic of China to adhere to particular conditions America wants to set.
This often involves the way China will govern Hongkong. It is political pressure, plain and simple, using american legislation and a global media offensive.
While some may be supportive of these moves, the problem is that this may derail current talks to end the so called Trade War between the US and China which has posed challenges to asian economies and lowered growth forecasts across the region.
That said, Resolving this war will be good for the world and asia as a whole. Early gains in these talks last month are already reflected in asian markets, as the hope of resolving it will put global, and asian growth back on track.
Likewise, now that Chinese investments are spreading across asia, expect this transfer of capacities to spread and boost growth further once the trade war is resolved. Vietnam and Singapore are leading beneficiaries followed by the Thailand and the Philippines.
Vietnam, and Thailand enjoy proximity and easy land logistics from China. The Philippines benefits from maritime proximity and a strategic location to trade with several countries. This is perhaps why a major US cargo airline will soon start using the Clark International Airport as its hub. It probably foresees an uptick in trade, for which its aircrafts capacity will be utilized.
A wider production platform has thus been created across ASEAN economies, including the Philippines, which will host several manufacturing facilities that transferred to avoid the tarriffs. These are not only Chinese firms, but third country companies that once had facilities in China, like a Japanese printer manufacturer.
As these newly established engines of growth start churning, expect our growth to pick up even more next year.
Thankfully, we as a country are still maintaining a 6% growth trajectory despite the global slowdown caused by the “war”. This puts us among good economic performers in the region snd retains confidence in the economy and local business.
Various economists from both private and government sectors all predict this sustained number as public spending picks up and consumption improved in the last two quarters.
At the same time, this confidence manifests in the decision of manor Philippine companies to invest in Asia, like the Ayala group in Myanmar, and Jolibee with its global acquisitions, and even the Aboitiz groups foray into power generation in a few countries in ASEAN.
The challenge now is improving our export capability with more high value products. Its time to look at innovation and network with foreign suppliers and buyers.
Hopefully, the various visits this week from various companies from Malaysia, India and Russia will bolster our trade capabilities. Likewise, the trade missions of the Davao Chamber to Japan early this month will boost interest in the Philippine and Mindanao economy.
Ironically though, this new legislation on Hobgkong comes as the US, a country vocal about Human Rights abroad, grapples with its own Human Rights issues concerning its immigrants, many of whom are undocumented Filipinos, who have lived in the US for decades who will be denied citizenship or at least a legitimization of their stay.
Perhaps it is good for us to remind them that values at home reflect values outside the home. How you value your own people should mirror the way you do unto others.
