Tags: roach | china | growth

Roach: China Growth Unsustainable

By    |   Thursday, 29 Oct 2009 08:04 AM

China may face an economic slowdown in the middle of next year because the nation's growth model is unsustainable, says Morgan Stanley Asia chairman Stephen Roach.

“Macro imbalances are particularly acute right now,” Roach told Bloomberg.

“China’s economy risks slowdown again around mid-2010.”

“China’s growth model is much more about supply than demand,” Roach notes.

“It’s not a sustainable model for China. It’s not a sustainable model for any nation.”

Economic growth in China accelerated to 8.9 percent last quarter, fueled by government stimulus spending of $585 billion and $1.27 trillion of new bank lending.

This government-fueled economic rebound is causing complacency in China, which still faces “tough challenges in years ahead,” Roach says.

What Roach describes at the “imbalance” created by China’s overdependence on exports to fuel economic growth was made worse, not better, by government stimulus, raising concerns about overcapacity and asset bubbles.

In September, China’s exports were down 15.2 percent from a year ago, the smallest decline in nine of the eleven consecutive months of export declines, benzinga.com reports.

China has seen modest improvements in exports and retail sales, but investment continues to constitute the overwhelming bulk of the country's growth, with about 88 percent of the country's GDP growth in the first half is tied to investment spending.

© 2017 Newsmax. All rights reserved.

 
1Like our page
2Share
StreetTalk
China may face an economic slowdown in the middle of next year because the nation's growth model is unsustainable, says Morgan Stanley Asia chairman Stephen Roach.“Macro imbalances are particularly acute right now,” Roach told Bloomberg. “China’s economy risks slowdown...
roach,china,growth
212
2009-04-29
Thursday, 29 Oct 2009 08:04 AM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved