A new report by Natixis, a French bank, analyzes China’s economic impact on Asia, showing which countries will be most immune to a Chinese slowdown. The bank’s Hong Kong based economists Alicia Garcia Herrero and Trinh Nguyen based the study on a range of determinants including trade, tourism, and investment.
Judging by the current relationship status between the two countries, it does not look as though The Philippines will be at risk of catching a [economic] cold from China any time in the future either.
On 12 July, a tribunal in The Hague announced that Beijing’s claims in the South China Sea were invalid. China promptly rejected the ruling, saying the tribunal had no jurisdiction. Then, recent satellite photographs taken in late July showed that China appears to now have aircraft hangars in the disputed territory of the Spratly Islands, and is continuing its construction of man-made islands. On 6 August, the Chinese military, which President Xi Jinping decided he needed to take control of in April, flew bombers, fighter jets and other military aircraft over the contested areas. Quite a warm advance welcome for former Philippine President Fidel Ramos, 88, who flew to Hong Kong on 8 August as a special envoy for discussions aimed at settling the territorial dispute. Little is expected to come of the diplomatic overture given the massive economic implications of the territory.
China relies heavily upon shipping routes through the disputed area, with an estimated $5 trillion worth of goods transported through the South China Sea each year. More importantly though, the China National Offshore Oil Corporation has already invested over $20 billion attempting to formalize its estimate that 125 billion barrels of oil and five hundred trillion cubic feet of natural gas lie beneath the surface. If these numbers prove to be anywhere near accurate, it would mean that the South China Sea contains more oil than anywhere else on Earth, apart from Saudi Arabia.
Mr. Duterte had joked on the campaign trail earlier this year that he would retake the disputed islands of the South China Sea on a jet ski. China, which currently operates a rehabilitated ex-Soviet aircraft carrier as its primary warship is believed to be preparing to launch its first indigenous carrier by the end of 2016. If this is indeed the case, Duterte may need a slightly larger arsenal along side him if he wants to pry the “second Persian Gulf” from China’s grip.