Interesting how Boo Chanco in his piece “Wounded Tiger” makes him the second PhilStar columnist to write about China’s looming economic woes and use the same quote as if copying from a press release.
Nobel Prize winning economist Paul Krugman wrote in the New York Times that China “is suffering from ‘economic long COVID,’ a decline in private-sector confidence brought on by arbitrary government intervention, which began before the pandemic but has intensified since.” The tough measures imposed on its population to control infection also had serious effects on the Chinese economy.
As my friend who is a partner at private equity firm Cinven told me, there may be war in the region but China’s not going to start it. Cinven is one of the silent investment banks in Europe, but not one of the smallest. Their firm’s read of China’s situation is objective. My friend decried what he saw during his last visit; the Ayalas squeezing every square meter of available space in Makati to build condos and to hell with the increasing density leading to mounting traffic congestion. Patay-gutom oligarchs he called them, never considering when to stop for the benefit of the people.
The operative question is, will China go to war in the South China Sea? Their analysis doesn’t point to it but China isn’t going to be caught with its pants down. They’re prepared and have been preparing for the possibility. At this point, the other battle is being fought on the global economic front. American financial and economic hegemony is dependent on the dollar. The BRICS (Brazil, Russia, India, China, and South Africa) countries are looking to dismantle this system and put up their own.
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The US made its currency the global go-to through their energy deficiency by creating the petrodollar. They dumped the gold standard which they established after World War II. But as experts have pointed out, inflation in the US can’t be brought down due to massive overprinting of dollars. It’s precisely the reason why, no matter how much interest rates are raised, the economy still shows no sign of slowing. The Americans are moving manufacturing back to the US but are also looking at India and Vietnam to replace China as their overseas factory. American companies want to keep their fat profit margins. This isn’t going to happen if consumer goods are manufactured in the US.
The issue with Taiwan isn’t about democracy or wanting to take back what was theirs to begin with. It’s about the chip foundries. Chips are the essential component in smart anything and everything, including cars. Intel got beat in chip design by Qualcomm and in manufacturing by Taiwan Semiconductor.
Because the Chinese aren’t democratic, they are being made out to be the bad guy. The Americans are also exploiting the longstanding animosity between the Chinese, Japanese and Koreans. Japan and Korea also have animosity between them but the Americans are bridging this in order to box China in. We Filipinos have short memories and those of us who weren’t born yet during World War II don’t read history. We have been conditioned to believe America is all about the good. Whoever are Uncle Sam’s enemies are our enemies.
It remains to be seen how things will play out but it’s best to keep an objective eye to what is going on in the region between the US and China. The US and the North Atlantic Treaty Organisation (NATO) countries aren’t going to go to war for us if it’s not to their advantage. It’s easy to issue a statement of support but we have to remember that when the fighting begins, we stand to suffer the most. We must also remember how the US dumped former President Ferdinand Marcos Sr. when he went against the wishes of Uncle Sam. President Bongbong Marcos should be wary because he’s up against a double-edged sword. On one side there are the Americans. On the other is our economic woes brought about by our neglect of agriculture, rampant smuggling and our inability to become competitive because of rent-seeking oligarchs. These oligarchs will take what they can from the Marcos administration. The danger comes when the price of rice goes up even higher and the masa can’t afford it and we can’t import at cheaper prices simply because there’s no supply to be found.
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US good, China is also good but doing the wrong things on the South China Sea.
We feel pressure, bullying from China, our Asian neighbor. We’re being restricted on the areas we historically exercise freedom of navigation. And WE all know it.
“We have been conditioned to believe America is all about the good. Whoever are Uncle Sam’s enemies are our enemies.” – Ramon Ortoll
Not true. The Americans are not all too good because they once colonized us and did a lot of things that were not really fair to us. However, with all the bad comes, too, all the good. And her enemies are not necessarily our enemies because we have our own independent foreign policy.