Asset bubbles in Asia pose no serious threats to economies there like they did in Western markets, says Stephen Roach, chairman of Morgan Stanley Asia.
The United States had “monster bubbles in property credit that ended up stalling home-building activities and personal consumption” and when they burst the “economy went into the tank,” he said.
In contrast, in Asia “you have bubbles that come and go, but they don’t impact on the real economy,” Roach told Bloomberg.
U.S. ratings agency Standard & Poor's said low interest rates in countries such as China are leading to asset bubbles in stock and property markets.
Nevertheless, monetary authorities in Asia can keep rates low because excess capacity of goods and services in the global economy will keep inflation rates low in Asia, which means bubbles won't pop like they did in the United States.
China's top parliamentary adviser has said that 2010 will be an important year for the economy as the government tries to fuel more domestic demand and rely less on exports for growth by developing more service-sector jobs.
“The year 2010 is a crucial year for China to respond to the impact of the global financial crisis and maintain steady and rapid economic development,” says Jia Qinglin, who is also the Communist Party's No. 4 ranking leader.
The Chinese economy grew 10.7 percent in the fourth quarter of 2009.
© 2014 Moneynews. All rights reserved.