This photo taken on 18 April 2024 shows BYD electric cars for export waiting to be loaded onto a ship at a port in Yantai, in eastern China's Shandong province. Sales of electric and hybrid vehicles jumped more than 40 percent in China in 2024, as demand for new energy models continues to surge and the sector remains entrenched in a gruelling price war.
AFP
The Philippines is among the Asian economies most vulnerable to the effects of a potential “China shock 2.0,” as China's expanding export dominance increasingly pressures lower-value manufacturing industries, according to Nomura Holdings Inc.
The Japanese financial group said the Philippines, Indonesia and Thailand face elevated exposure because of their reliance on lower-value manufacturing, while Malaysia, India and Vietnam are better positioned due to stronger participation in higher-value global supply chains.
Nomura noted that China's share of global exports rose by 1.5 percentage points between 2019 and 2024, with gains spanning both traditional manufacturing and high-technology industries.
The firm warned that the latest wave of Chinese exports could have a deeper impact than the original “China shock” of the early 2000s, driven by rapid growth in strategic sectors such as electric vehicles, lithium-ion batteries and solar panels. Combined exports of these products surged 349 percent between 2020 and 2025, with their share of China's total exports nearly tripling from 1.5 percent to 4.6 percent.
China has also expanded aggressively in heavy industries, with exports of construction machinery nearly tripling over the same period.
Beyond trade, Nomura flagged uneven readiness for artificial intelligence adoption across Asia. It said the Philippines, Indonesia and Thailand face challenges in infrastructure, skills development and enterprise capacity needed to convert AI investments into productivity gains.
The report warned that countries including the Philippines risk losing competitiveness if domestic capabilities fail to keep pace with rapid technological change, even as the World Trade Organization estimates that sustained investment in AI-related goods could add about 0.5 percentage point to global trade growth.
