Respondents to our web poll last week were overwhelmingly confident that stagnation in the West could be good for the East.
Not everyone is so confident. Stephen Roach, Morgan Stanley’s recently departed Asia chief, wrote an essay in Foreign Policy in July that cautioned against jubilance in the East.
“As tempting as it is to herald the demise of the West and the ascendancy of the East in this post-crisis era, that verdict ... is probably premature,” he wrote. “Developing Asia hasn't done enough. Most importantly, it has failed to wean itself from the export-led growth model that has long defined its economic character.”
The global imbalance that helped to create the global financial crisis – Americans living beyond their means and Asians living well within them – has not gone away.
“The West is down – and most likely to be so for years to come,” wrote Roach. “But until Asia draws greater support from its 3.5 billion consumers, there are no guarantees that the region will provide a new source of global growth to fill the void.”
Our readers disagree strongly. We asked them if Asia's economic revival could survive a second downturn in the West, to which 74% said Yes. Roach was right when, in 2000, he argued that the global economy needed realigning. Let’s hope he is wrong this time.
Photo provided by AFP.
