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Saturday, February 25, 2006
IT can shield RP against China’s crash - strategist
Amid growing concerns over the risk of China’s economy crashing in a few years and its effects on the country, an investment strategist urged the Philippines to focus on its building up on its strong industries.
Christopher Wang, a Singapore-based investment strategist of the American Express Private Bank, said with the trend of industries — even high-end businesses like microchips manufacturing — moving to China, it will be hard for other Asian economies to compete.
Focus
It will be advisable for the Philippines to focus on what it’s good at, like information technology, Wang said.
He said the country should focus on luring investors in the call center industry, which, he adds, Cebu is particularly good at.
He also downplayed concerns over the present political instability hurting the Philippines’ competitiveness.
“Everyone has political uncertainty — (such as) the Philippines, Indonesia,” he told reporters after the economic briefing held at the Cebu Country Club last Wednesday.
Over-investment
During the briefing, the bank’s London-based senior economist Kevin Grice agreed with the forecast that China’s economy will come down hard due to overheating or over-investment.
“But the chances of a hard landing in 2006 or 2007 is quite low. Maybe 2009 or 2010,” he said.
Hong Kong-based chief economist Jim Walker had predicted that China would experience a hard landing in the next two years with an economic growth slowing down to about six to seven percent next year and possibly three to five percent in 2007 from its current growth of 9.5 percent.
University of Asia and the Pacific School of Economics dean Bernardo Villegas had warned that the dramatic slowdown will mean that China will no longer import hundreds of billions of dollars from its trading partners, including the Philippines.
Grice said the hard landing is expected after the 2008 Beijing Olympics.
Wang said China, at this time, is purchasing supplies for the construction of roads, bridges and other infrastructure in preparation for the Olympics.
However, Grice said the Chinese Government is expected to curb a drop in the gross domestic product growth that will threaten to slow down the economy. (CYR)
For Bisaya stories from Cebu. Click here. (February 25, 2006 issue)
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