The International Energy Agency (IEA) reported that China’s consumption of oil has declined by about 1% after increasing 11% and 15.4% the previous two years. The quick and dirty analysis might point to a slowing Chinese economy while other experts attribute the stagnation/decline in oil demand to the highly regulated Chinese energy market that has supposedly set a relative gas price at $1.63 a gallon. Read the whole story from the New York Times.
Many experts agree that China needs to maintain >8% growth a year to sustain its burgeoning economy and if this decline in oil consumption means a slowdown in growth this could be an indicator that world oil prices are beginning to slow down some if not all of the worlds major economies. Although the U.S. economy has managed to post some gains both in economic growth and through job creation it’s service based economy is relatively slow to respond to high raw energy prices where as more industrial based economy like China’s will have a quicker and much harder hitting reaction to high oil prices.
Yesterday, there was an event than increased my worries over the future of the Philippines. It wasn’t the growing anti-Arroyo protests, though it does concern me that the country seems to have lost all ability to operate as a functional legal democracy. No, more worrying was that the Philippines lost one of its few top-tier foreign investors.:
HONG KONG - In a move to exploit China’s fast-growing market, FedEx Corp. said Wednesday it will close its Asian hub in the Philippines and replace it with a new $150 million facility in Guangzhou, southern China.
The new cargo-handling center at Guangzhou’s Baiyun International Airport, scheduled to open in December 2008, will better serve clients doing business in China, the company said in a statement.
FedEx said that the move was based on China’s growth potential and I’ll take that at face value. Still, the perennial instability in the Philippines no doubt was also taken into consideration.
I believe that Arroyo did conspire to rig the last election and that she should go. Plus, she should face prosecution if presentable evidence is strong enough to build a case against her. Still, People Power III would not be good for the country… if only because it will likely be followed by People Power IV, V and VI. I expect that this is the concern that is keeping the elites and middle classes on the sidelines.
More on the unfolding mess that is Philippine
rule by crooks mob rule democracy can be found at PCIJ. An anti-Arroyo and anti-Ramos view is at Philippine Politics ‘04. Sassy has a legal view as does Punzi’s Corner. Manuel (a co-pundit here) has details at his site. Torn says that Gloria’s appeasement has been her undoing.
I don’t believe that democracy has to hinder development - you only need to look to Indonesia to see a country that is managing to find its footing through the ballot box. However, democracy as it is practiced in the Philippines is not a path to growth.
It’s unfortunate that FedEx is choosing stable-but-authoritarian China over the free-but-anarchic Philippines, but if I were a shareholder I wouldn’t criticize the decision. Not one inch.
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Mao: The Unknown Story - by Jung Chang and Jon Halliday:
A controversial and damning biography of the Helmsman.
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