BY JED JALECO DEL ROSARIO
A LOT OF financial analysts are wary of 2025, and many think that a recession may be coming very soon.
China, in particular, is a source of much anxiety. The Chinese stock index, the CNY, and Chinese bonds are both causing concerns, along with the deflation that is reportedly happening there.
And though the People’s Republic of China (PRC) tries to conceal the bad news, analysts and traders remain concerned. For example, a report by the International Energy Agency’s showed that China dwarfed every other country and region in terms of Global Oil Demand from 2013 to 2023.
Last year, however, BofA analysts expressed concerns about oil consumption. Less oil consumption means less economic activity which means China is losing its role as a key driver for growth.
There are hopes that India and other developing regions can pick up the slack but, even assuming they can, it will take time.
Personally, I tend to be pessimistic. As I’ve written in previous articles, the rise of Globalism is what allowed China and many emerging markets to flourish. That period is now over, and China’s easier days with it.
This affects us as Filipinos, at least on an economic level. Our export and assembly industries will likely be affected by China’s economic weakness and the resulting slump will have knock on effects.
On the plus side, the reduced price of oil will benefit our consumers and the rising dollar may benefit our overseas Filipino workers.
Also, China’s economic weakness is an ongoing trend but it does not mean that China is doomed. It’s more likely that the Chinese will experience a prolonged stagnation, assuming they don’t invade Taiwan or do anything to their neighbors.
For the rest of the world though, the ongoing economic problem is the price of not relying on China for manufacturing, and achieving that will require a lot of painful change./PN
