Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

China, Economy, Inflation, Investing and on Buying U.S. Debt

Economics / China Economy Feb 11, 2012 - 12:00 PM GMT

By: Bloomberg

Economics

Best Financial Markets Analysis ArticleBloomberg TV's Trish Regan spoke to Stephen Roach, non-executive chairman of Morgan Stanley Asia, ahead of soon-to-be Chinese President Xi Jinping's visit to the U.S. next week.

Roach said that he hoped U.S. political leaders would turn the visit "into an opportunity and not into a politically inspired, perceived threat." He also said that he foresees a "soft landing" of China's economy and that market access should be the main political issue with China, not currency.


On Chinese-American relations:

"The U.S. has a lot of problems. American workers are under pressure: high unemployment, stagnant real wages, a big trade deficit and the largest piece is with China. Washington wants to say, this is China's fault. My sense is that's an example of being unwilling or unable to look in the mirror and accept what is our own responsibility."

"We do run a trade deficit with China, but we run trade deficits with 87 other countries. It's a multilateral problem, a clear reflection of our shortfall of saving. We can't blame China for that -we've got to accept responsibility for our own lack of saving."

"China is an opportunity for us. It's our third largest and most rapidly growing export market. We need a new source of growth. Let's turn to exports and push for open market access into rapidly growing Chinese domestic demand. That should be the agenda."

On how to level the playing field with China:

"Deflect attention away from the currency. Look at China's policies on government procurement, so-called indigenous innovations, that many American companies are saying, squeeze them out. The debate should be on market access, not on the currency. The Chinese currency is moving up 25% against the dollar over the last five years, it'll keep moving up. That's not the issue. We're missing the opportunity, which again is market access."

"China is about to change the model. They are moving away a model driven by exports and investments, to one that will be driven increasingly by internal private consumption. This will be the biggest consumer story globally of our lifetime. Let's be in a place to take advantage."

On whether China is the political scapegoat in the U.S.:

"The consumer share of the Chinese economy is 33%. We're at 71%. They have decades to go to get to the point where we are. We need to encourage them to boost their internal private consumption. Because they're an open economy, they import a lot of things from overseas. They import from Japan, Korea,Taiwan, Germany and from the United States. Shame on us if we don't advantage of being able to sell more things made in America that Chinese consumers do want, and will want, for years to come."

"Jobs are a critical part of the economic equation for any country, whether it's the United States, China or anyone else. Yet [China] recognizes their limits to what they can produce for their home consumption right now. In a global economy, there's plenty of opportunity for global producers to participate, provided their markets are open to us."

On whether China will continue buying U.S. debt:

"No, it's not going to continue. China is buying Treasuries because they have a lot of excess or surplus saving. As they now focus on boosting internal consumption, they'll slowly absorb their surplus savings and have less left over to put into Treasuries."

"We have to get our act together if we don't save, and it possibly means higher interest rates. These are all great issues for President Obama and Vice President Joe Biden to discuss with the soon-to-be president of China Xi Jinping. Let's turn this into an opportunity and not into a politically inspired, perceived threat."

"This is a political year for the U.S. and a transition year for them. Politics are tough in the United States right now in a way we have never seen before. And even in a one-party state like China, there are political constituencies that need to be taken into consideration."

On a slowing economy in China:

"China is slowing right now, we know that...There's a lot of talk about a crash landing, a hard landing in China - property bubbles, inflation bubbles. I think those fears are overblown. I think China will slow in to the 8, 8.5% zone."

"The wild card for China is a disorderly EU break-up. I still put in a low probability on that, even given the problems we're seeing in Greece right now."

On inflation in China:

"Inflation popped up a little bit in January, but it's 4.5%. The government is really focused on reducing food price inflation. They've jacked up their reserved ratio requirements in the banking system. The Central Bank has tightened five times in the past year. They've got a pretty good handle on inflation right now. I don't think that's a risk."

On investing long-term in China:

"I think for a long-term investor, China's been a very weak equity market over the past 18 months, especially in the last nine months. What's driving that is the fear that the landing would be hard. I think it will be soft. If I'm right, there will be opportunity there."

bloomberg.com

Copyright © 2012 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules