Bullish On China
The Inaugural Asia Society Forecast Asia Program Series
Asia Society’s centers in Texas, Northern California, and Southern California collaborated to inaugurate Forecast Asia, a signature series that will gather together experts each year to examine Asian markets and their implications for the U.S economy. The first program, “China’s Ambition Grows as the Global Economy Slows,” launched in Houston on February 2, came to San Francisco on February 3, and ended its engagement in Los Angeles on February 4.
ASNC’s speakers projected a bullish future for China before a standing room-only crowd of over 120. Laura Tyson, Professor at U.C. Berkeley’s Haas School of Business and former Chair of the White House Council of Economic Advisors, opened the panel by asserting that “we now live in a G2 world” where China is “punching way above its weight” in contributing growth to the world economy. Many on the panel noted that China’s slowdown is to be welcomed, reflecting the leadership’s strategic shift to restructure the economy.
Of the four panelists, Barry Naughton, the Professor of Chinese Economy at U.C. San Diego, was the least sanguine of the four. He noted the extraordinary challenges facing China’s policymakers in 2015 and the “underwhelming” progress to date since the Third Plenum. But even he acknowledged that the leadership has recently begun to tackle some serious issues including fiscal reform and climate change. Despite mounting NPLs in the banking sector, therefore, he agreed that financial sector reforms were progressing.
For Nick Lardy of the Peterson Institute of International Economics, China’s astonishing growth owes much to the private sector, its primary engine for GDP and employment growth. The reforms signal China’s leadership’s intent to unleash even greater surge in its economic performance from an unshackled private sector – all portending good. Asia Society’s own Jack Wadsworth, Advisory Director of Morgan Stanley, was also upbeat regarding China’s prospects, derived from his on-the-ground experience setting up China’s first investment bank and his role in various foreign advisory groups to China’s top leaders. He anticipated that the RMB will become the world’s reserve currency in the not-too-distant future. Lardy, however, still expected a longer lag time before this happened.
Below is a clip from the event in which Nick Lardy, Barry Naughton, and Laura Tyson offer contrasting yet nuanced takes on how, and how well, China weathered the global economic slowdown:
To view the entire program, please see below: