US, China talks further economic ties but lack solutions to the crisis

The world watches as the two superpowers, the United States and China, talked about economic matters in a time when their leadership is highly sought by the rest of the world amidst a crippling global economic and financial crisis. The third edition of the China-US Strategic Economic Dialogue in Beijing this week did just that. But the question is, was there enough substance that this summit produced to make any significant impact if at all.

It is the first time Chinese and American finance officials met since the crisis began in October. Both understood now each country is a dependent entity of the other at least in terms of trade. The crisis bared how the decline of US consumption can have adverse effects to China’s mass production. Thus, the summit tackled the issue of economic growth balance which has for years gone to the favor of the Chinese. China has also committed to improve their food and consumer goods safety standards in light of the recent troubles Chinese manufacturers faced abroad with their products from milk to toys, all involved in cases of health hazards.

But what analysts are most interested in is how the two sides are going to address the current crisis that would benefit not only their economies but hope to stimulate the entire world economy back on track. The Americans are mulling for a stronger RMB, China’s currency, in order to make US goods more competitive in the Chinese market. However, their Chinese counterpart is inclined to depreciate their currency because they need to save their rapidly declining export industry, which according to Chinese Premier Hu Jintao has lost its competitive edge.

It’s obvious that the Chinese are facing massive pressure inside because of the rate manufacturing companies are closing shop all over the mainland. Many, however, dispute this notion as nothing but political rather than economic because it is not that the Chinese exports have lost competitiveness but it is the overall fall of American consumption. Since no one is buying their goods, it is just imperative that their exports are expected to fall and a depreciated RMB is not likely to make any difference.

Many believe that the Chinese are simply positioning themselves politically over the Americans since they know the US has not much leverage coming into these talks. They would rather deal more constructively with the next officials of the new Obama administration rather than push for something concrete with a lameduck Bush administration.

Young professionals should start holding on to their money

If you are 20ish and has a habit of jumping from one job to another, now is the time to reform that attitude. The economic crisis, although still in its infancy here in the Philippines, is expected to go full swing next year. The problem is real and most of it is really out of the hands of ordinary middle class families and individuals, especially the yuppies, a slang term for young professionals.

There are things that young working professionals can do to secure themselves financially as our economy transverses this crisis. Start saving. Saving money, though, is easier said than done, because if it were, we would have ranked among the countries with high savings rate but unfortunately we are currently among the bottom of the sphere along with the likes of Bangladesh and Myanmar racking only 17 percent. People from our neighboring countries Thailand and Malaysia save three-tenths of their income while the Chinese save half of theirs.

Why is it important to save? Because it is a form of investing in your future (purchasing a home, buying a car) and bring security to a rather uncertain future (untimely health care costs, other emergency situations). Also, it is a good leverage against a burgeoning credit card debt, which is a situation that most young professionals find themselves into nowadays. A high debt with low or non-existent savings is a recipe for bankruptcy. Certainly, no one wants to be a young, hip, and broke professional at their 20s or early 30s.

Job losses now hounds Filipinos working abroad

Many Filipinos from abroad are coming home this December not because of the holidays but because they have been laid off from their work. Just recently, dozens of Filipino overseas workers were forced to pack their bags and left for home from Taiwan and Macau. In the previous month I was told by my mother that many people from our rural town came back home from China because the call center that they worked for there went out of business.

The ongoing economic and financial crisis has affected Filipino workers all over the world and this could mean peril for our economy. Their remittance dollars, which has been the lifeline of not only our overall economic health but also of our foreign reserve security, is seen to dramatically fall in the months to come. Technically, this will affect the strength of our currency which could trickle down to the competitiveness of our exported products and the national government’s ability to finance its external debt.

The effects on the lives of Filipino middle-class families, however, is much magnified. Income from our overseas workers are used to build homes and pay for children’s education, just to mention a few. When this dries up, it would be least to say catastrophic. Many of these workers are still ridden with debt brought by the high processing fees of their previous stint abroad. The lack of decent-paying work opportunities here in the Philippines is another reason why these workers dread the idea of even coming back home.

Foreign countries, where our OFWs (Overseas Filipino Workers) have been working, have their own problems dealing with the crisis and usually their initial response is protectionism. With this economic climate, their government and private sector are being pressed hard by their own constituents to prioritize locals over international workers like Filipinos in terms of jobs.

Our government, through the agencies that handle the welfare of our overseas workers, has to be ready for more reverse exodus of OFWs by allotting enough funds aimed at providing financial assistance to them.

Liverpool sits top of Premier League as Chelsea bows to Arsenal

For the second straight game, Liverpool failed to find the back of the net and settled for another 0-0 draw, this time against West Ham United. Still, it was good enough to put them ahead of rivals Chelsea for the leadership of the Barclays Premier League.

Despite going behind early, Arsenal managed to score two goals courtesy of Dutch striker Robin Van Persie and frustrate Chelsea at Stamford Bridge. That essentially ended the Gunners’ three-game losing skid in England. For Chelsea, the loss was only their second but a crucial one since Liverpool managed to gain a point against the Hammers.

It could have been worse for the Reds had Craig Bellamy made his 30-yard strike shortly before the end of the first half. Spanish striker Fernando Torres did not suit up for the Merseyside club while Captain Steven Gerrard and Xabi Alonso both were given but missed their chances to end the deadlock.

Liverpool will meet Blackburn Rovers on Saturday before their final Champions League group game against PSV Eindhoven on December the 9th.

‘Bonifacio weekend’ a huge lift for retail sales

It was the perfect weekend. Most Filipino families grabbed the opportunity to spend during the long weekend leading to Bonifacio Day. Although I do not think the government is tracking sales made by major retail stores in any given period of time, it was obvious by the volume of people who flocked the malls in the weekend, that it was a huge day for the Philippine retail industry.

Retail giants like SM, Robinsons, and Landmark made a big killing out of people’s high disposable income in the weekend since the latest payout coincided with the mandated 13th month pay. My wife and I, like many others, stormed the malls to buy items from shoes to tickets to the movie Twighlight. It was like the Filipino version of the Black Friday shopping spree in the US during weekend Thanksgiving weekend.

For the retail industry, it is a good opportunity to bolster their bottom line since the ongoing economic crisis is definitely going to change people’s spending patterns for a while. Because as the crisis grips the economy further, they may have to get used to giving more than 20 percent off the tag just to get people to shop.