THE PHILIPPINES IN 2050

THE PHILIPPINES IN 2050

Fernando Fajardo

The Inquirer, February 29, 2012

From number 43 in 2010, the Philippine economy will become the 16th biggest in the world in 2050. This forecast is from HSBC’s report on “The World in 2050” released last January this year. Is this possible? Can we make it? What does it mean being in number 16? The HSBC itself has some answer if it is possible or not: “We openly admit that behind these projections we assume governments build on their recent progress and remain solely focused on increasing the living standards for their populations. Of course, this may be an overly glossy way of viewing the world, and we conclude there are a number of reasons our ‘World in 2050’ could turn out a little different.”

There are many possible reasons why its forecast may go nowhere? But before that, let us look at how the HSBC arrived at the Philippines becoming number 16 in 2050.

At the outset, HSBC grouped the country into three categories—the fast economies, growth economies and stable economies. The fast-growth economies are those that are at a low level of development but which have sufficiently strong underlying fundamentals so that they catch up with more developed economies with similarly strong fundamentals. The HSBC assigned the Philippines in this category together with China, India Malaysia and Vietnam, among others. The “growth” group, which are also set to outperform many of the developed world economies, includes Indonesia and Thailand, along with Pakistan because of sheer size of its working population. The stable group of countries offer more limited growth prospects. These largely include the high growth, ageing economies in the developed world, of which Europe fares particularly badly.

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CONSUMPTION-BASED GROWTH IN CHINA

CONSUMPTION TO LEAD GROWTH

Chi Fulin

China Daily, February 28, 2012

Urbanization and restructuring will boost residents' spending and promote more sustainable development

It is China's short-term policy goal as well as its medium and long-term strategic aim to reverse the imbalance between investment and consumption as soon as possible and establish a consumption-dominated development pattern.

China's economic prospects will to a large extent be decided by how successful it is in achieving the transformation to a consumption-dominated development pattern. If the process is smoothly pushed forward in the coming five to 10 years, it will have historical consequences for the country's successful medium and long-term development and will play a big role in promoting global economic rebalancing, recovery and growth.

China's economy is expected to continue growing in the coming decade, despite the probability of continuing turbulence and contraction in the international market. In the short term, investment is still likely to spur the country's economic growth, but investment can only be a long-term driver for growth if it is effectively converted into consumption. So short-term investment must serve medium and long-term consumption. Any investment that sacrifices consumption will damage the internal driving force for economic growth and will only add to the country's economic uncertainties in the long run.

The country can maintain economic growth of around 8 percent in the next two decades if it manages to fully tap its consumption potential. For example, by raising its consumption to GDP ratio to more than 60 percent and lowering the investment to the GDP ratio to less than 40 percent.

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INDIA AND ENERGY IN 2030

INDIA WILL BE WORLD'S 3RD LARGEST ECONOMY BY 2030: BP

The Deccan Herald, February 27, 2012

India will world's third largest economy by 2030 but its energy demand will slow down to 4.5 per cent, global energy giant BP plc said today.

"By 2030 China and India will be the world's largest and third largest economies and energy consumers, jointly accounting for about 35 per cent of global population, GDP and energy demand," BP's chief economist Christof Ruhl said releasing BP's Energy Outlook 2030.

There would be "no surge in energy demand as India industrialises. Demand growth slows to 4.5 per cent per annum (vs. 5.5 per cent p.a. in 1999-2010) as improvements in energy efficiency partly offset the energy needs of industrialisation and infrastructure expansion."

India's dependence on imports to meet its gas needs will jump to 47 per cent by 2030 while the same for oil will grow to 91 per cent. The nation will be 40 per cent dependent on imports to meet its coal needs.

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FACEBOOK AND CHINA

PESEK: FACEBOOK, CHINA HAVE A LOT IN COMMON

William Pesek

The Denver Post, February 26, 2012

Mark Zuckerberg is pulling off a feat bigger than becoming the world's richest 20-something: thriving in the cyber age even before "friending" the most populous nation and biggest Internet market.

Facebook's founder will soon have to "like" China, where his website is banned. A post-initial-public-offering Facebook will have shareholders demanding that it tap China's 1.3 billion people, and now. Such is life when your business model is predicated on ever-growing ranks of users updating, sharing and poking to make advertisers and investors rich.

Zuckerberg will certainly face difficulties. Facebook's role in the Arab Spring movement caused many sleepless nights for Communist Party bigwigs. Yet more focus should be on the things China and Facebook have in common — things that may not jibe with Zuckerberg's claims of making the world a better place.

China's leaders will expect Facebook to bow to their censorship demands the way Google, Yahoo, Microsoft and Cisco Systems have. Twitter recently made an about-face, announcing it will block posts on behalf of governments. And Facebook will look forward to mining what it can from China's masses, just as it does America's.

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CHINA’S SLOWDOWN

CHINA’S GROWTH MAY SLIP TO 8.6% THIS YEAR AS EUROPE SLOWS, REPORT SAYS

Bloomberg News

Bloomberg, February 25, 2012

China’s economic growth may slip to 8.59 percent this year due to slowing in Europe, while inflation will ease to 3.3 percent, according to a Xiamen University and National University of Singapore joint forecast.

Growth may bottom out in the second quarter, slowing to 8.35 percent before picking up again, according to the forecast released today at a forum in Beijing. Expansion in first quarter may be 8.42 percent, down from 8.9 percent in the final three months of 2011.

China’s growth is decelerating as Europe’s sovereign-debt turmoil hurts exports and Premier Wen Jiabao continues trying to cool his nation’s property market. Last month’s decline in overseas sales and weaker-than-forecast lending raised concerns that the world’s second-biggest economy may see a sharper slowdown.

“There are many external uncertainties out there,” Wang Yida, a deputy director at the Ministry of Finance, said today at the forum. “We should be wary about the downward pressure on economic growth brought about by sluggish external demand, although the nation’s economic fundamentals remain sound.”

Wang said today the government will further improve the policy of “structural tax cuts” and boost spending in areas including energy conservation, education and technology to help spur domestic demand.

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CHINA: CONTAINMENT OR ENGAGEMENT?

TREATING CHINA AS AN ENEMY

Ambrose Evans-Pritchard

The Telegraph, February 24, 2012

I have just been sent a copy of Amitai Etzioni's essay "China: Making an Adversary" published in International Politics. It has been out for a while but is new to me and will not have been seen by most Telegraph readers.

As you all know, Washington (and the West) is deeply split over how to handle China's spectacular renaissance. This is by far the most important issue in 21st-century geopolitics. It is not one we can afford to get wrong, and errors made today may prove irreversible.

The new term "China hedge" has been coined, used by those who think that the country's growing economic and military might – combined with a new "truculent attitude" – is potentially so menacing that the US must rearm and reorganise its global alliance structure as an insurance policy.

These "containment" hawks cite the following reasons:
• China's defence budget grew at 12.9pc a year from 1996 to 2008, while GDP grew at 9.6pc. A State Department task force report concluded that "it is proceeding at a rate to be of concern even with the most benign interpretation of China's motivation".

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CHINA, THE EU AND FOREIGN POLICY

EU-CHINA SUMMIT HIGHLIGHTS FOREIGN-POLICY ISSUES

Peter Taberner

New Europe, February 21, 2012

Last week’s EU-China Summit provided a glance into China’s attitude to its foreign policy, with the views from the east taking a more assertive stance on issues surrounding Iran and Syria.

China incensed the western by vetoing a UN Security Council resolution to stop violence in Syria, and their main newspaper the People’s Daily, anorgan of the Communist Party, reiterated Beijing’s fear that other major powers are trying to stir up conflict with this comment in its 20 February edition.

"If Western countries continue to fully support Syria's opposition, then in the end a large-scale civil war will erupt and there will be no way to thus avoid the possibility of foreign armed intervention."

The Iran situation has also unravelled into a stalemate between east and west with Beijing not joining the EU in an embargo on buying Iranian oil set for 1 July, instead calling for talks over the Iranians’ desire to enrich its uranium for what Tehran claims to be for energy purposes only.

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