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6.13.2011

Trade War WIth China?




I heard over the radio that some sectors are advocating that the Philippines retaliate against China’s saber rattling at the Spratly Islands by putting a stop to the imports coming from that country. Without China doing anything, it will be the Philippines on the losing end. Most of the raw materials being used by the Philippine exporters are imported from China. The same holds true for the raw materials used for the domestic consumption. Therefore, if the Philippines will start buying from elsewhere, its export market will be greatly reduced because China is the cheapest source of raw materials. Philippine exports will become less competitive. Domestic prices will also increase and God knows what else. Need I say more?

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