Bullish China

Clay Chandler: We’re talking today with Steve Roach, the chairman of Morgan Stanley Asia. Steve has been here in Hong Kong for nearly two years now but is known to many for his previous role as Morgan Stanley’s chief economist. He’s a long-time observer of the global economy and of economic policy and development in China. Steve, thank you for being with us.

Stephen Roach: I’m delighted to be here.

Clay Chandler: Private consumption is running at about 36 percent of GDP in China right now. That is half of the US consumption rate, and it’s about two-thirds of the consumption rate of Europe. It has come down very dramatically in the last decade, and tested levels that we’ve really never seen in any other major economy in the history of the modern global marketplace. Why is China’s consumption so low, and how do you explain the extent of the decline?

Stephen Roach: I think there are a couple of reasons why the Chinese consumption rate is as low as it is. When Deng Xiaoping gave the word to push ahead on reforms and open up the Chinese economy, in the late ’70s, the Chinese economy was on the brink of collapse. And so they needed a pretty quick answer, and they needed it to take hold in a relatively short period of time. And so the investment/export model was unleashed, and unleashed with a vengeance. And it did start to deliver immediate results.

The second reason is that as that export/investment-led model began to deliver, the world increasingly embraced globalization, took down trade barriers, and global trade started to skyrocket as a share of world GDP. And so not only was China delivering growth for its own purposes, but it got seduced by the globalization of trade and the ability for this increased share of global trade to reinforce its own opening up.

And so it remained very focused on exports and investment and neglected the heavy lifting that was required to augment that by improved private consumption. And so it never really had a backup plan here. And now that failure to really focus on internal private consumption and the [social] safety net is beginning to be very problematic going forward.

Clay Chandler: What can China do to boost consumption? And what, in your view, is the upper limit of how much China could feasibly raise its consumption rate as a percentage of GDP?

Stephen Roach: I’ve learned, Clay, in my last 12 to 15 years of following China, don’t underestimate the commitment and the determination of the Chinese authorities to address a problem when they finally realize they’ve got a serious one. I think a realistic goal, and I’ve given a speech on this in Beijing earlier this year, would be to aim for a 50 percent consumption share of GDP within five years.

I think they can do it. Now that’s a big move. That’s 14 percentage points of GDP, 15 percentage points of GDP in five years. I think it’s achievable if they do move aggressively on social security, pensions, and nationwide medical care.

Clay Chandler: What are the obstacles to boosting consumption in China? And what’s your sense of how committed China’s leaders are to overcoming that resistance?

Stephen Roach: Well, I think the main obstacles are persuading a large generation of Chinese workers and families who have been displaced under the guise of state-owned enterprise reform—who have lost the sort of cradle-to-grave support, the so-called iron rice bowl, the safety net that had been in place in the prior state-owned enterprise regime—to convince them that it’s okay to begin to draw down the excesses of precautionary saving. People say, “Oh, this is a cultural thing in Asia.” I don’t buy that for a second. I think the excess saving is very much an outgrowth of a necessity rather than a cultural DNA. And it’s up to the Chinese authorities to really deliver on the safety net, to dissuade families so that savings motive can change.

Clay Chandler: In an article in the Financial Times, you wrote that China’s response to the global financial crisis has succeeded in restoring short-term growth but has also raised the risk for long-term problems in the economy. You warned, in fact, that it has raised the possibility of “destabilizing consequences.” Could you explain that?

Stephen Roach: Things were pretty bad in late 2008 and 2009—much worse inside of China than the official year-over-year GDP comparisons might have alluded to. If you recalculate the GDP on a sequential quarter-to-quarter basis, the way we do it in the West, the growth rate had slowed pretty close to zero late last year.

There were massive layoffs in export-dependent Guangdong province; the government admitted at least 20 million migrant workers had lost their jobs. So once again, China needed growth and they needed it now. And so what they ended up doing was, first they enacted a massive 4 trillion renminbi stimulus, 72 percent of which was infrastructure. And then they opened up the spigots of bank lending. And they created the biggest six-month lending binge on record: about 7 trillion renminbi in the January-through-June period.

So what I wrote about in the FT was that it seemed to me that because the growth imperatives were so urgent, the authorities just opted to get as much growth out the door in as short a period of time as they possibly could. And they ended up stimulating perhaps the most unbalanced sector in the Chinese economy: fixed asset investment, which at the end of last year was 40 percent of the GDP. Now it’s probably more than 45 percent of the GDP. We’ve never seen numbers like that for any major economy in the modern post–World War II era.

Clay Chandler: Is it realistic to think about China as a new engine of global growth?

Stephen Roach: I think China has the potential to become a major engine of global growth. But I think it’s unrealistic to expect China to step into that role immediately in this post-crisis era. I think it’ll take three years, more likely five to ten years, for China to really have the type of balance and scale of its economy that can fill the void that’s about to be left—or that is now being left—by the demise of what heretofore has been the biggest and most dynamic and powerful consumer in the world: the American consumer.

中国在快速融入全球经济的过程中，大力推动出口和由政府主导的投资，但却忽视了建立促进国内消费所必需的社会和经济体制。摩根士丹利亚洲区主席Stephen Roach认为，现在是中国这个世界上增长最快的经济体确定一个“补救计划”的时候了。麦肯锡出版部亚洲编辑Clay Chandler于2009年8月在香港主持了本次专访。请观看采访视频，或阅读以下采访文字记录。

Clay Chandler: 今天，我们专访摩根士丹利亚洲区主席Stephen Roach。Steve来香港任职已有近两年时间，而许多人都知道，他以前曾担任过摩根士丹利的首席经济学家。他对全球经济以及中国的经济政策和发展进行过长期观察与研究。Steve，谢谢你接受我们的专访。

Stephen Roach: 我很高兴参加这次访谈。

Clay Chandler: 目前，私人消费只占中国GDP的大约36%，仅为美国消费水平的一半，是欧洲消费水平的大约2/3。在过去十年里，中国的私人消费占GDP的比例大幅度下降，不断地考验我们在现代全球市场经济史上、在任何其他主要经济体中从未见过的低水平。为什么中国的消费如此之低？你如何解释这种消费率的大幅度下降？

Stephen Roach: 我认为，中国的消费如此之低主要有两个原因。当邓小平在20世纪70年代后期提出改革开放中国经济时，中国经济当时已濒临崩溃的边缘。因此，他们需要一种能快速见效的应对方案，他们需要这种方案能在很短的时期内稳定经济。所以，投资/出口型的经济模式应运而生，而且得到了大力推行。这种经济模式也确实开始收到立竿见影的效果。

第二个原因是，当中国以出口/投资导向的经济模式开始生效时，全球化的理念正日益被世界所接受，贸易壁垒被打破，全球贸易在世界GDP中所占的份额开始大幅飙升。因此，中国不仅为自己的目的实现增长，她也受到贸易全球化以及增加全球贸易份额以便提升自我开放的能力的诱惑。

因此，中国一直保持了对出口和投资的高度重视，而忽视了通过提高私人消费来实现经济增长所需要进行的持久努力。中国始终没有真正有过一个“补救计划”。由于没有真正重视国内私人消费和建立[社会]保障网，中国今后的发展将会遇到很大的问题和麻烦。

Clay Chandler: 为了增加消费，中国可以采取哪些措施？在你看来，中国提升其消费对GDP的占比最多可达什么水平？

Stephen Roach: Clay，在我过去12～15年对中国研究中，我体会到，当中国当局终于认识到她遇到了一个严重问题时，千万不要低估她解决这个问题的承诺和决心。我认为，在5年之内，将消费在GDP中所占比例提高到50％是一个比较现实的目标，我今年早些时候在北京已经谈到了这一点。

我认为，中国人能够实现这一目标。这是一个大举措，在5年内，要把消费占GDP的比例提高14～15个百分点。我认为，如果在社会保障、退休金，以及全民医疗保健方面积极采取行动，这一目标是可以达到的。

Clay Chandler: 在中国，增加消费存在哪些障碍？为了克服这些障碍，您认为中国领导人愿意做多大的努力来克服这些障碍？

Stephen Roach: 我认为，主要的障碍是说服人数众多的一代中国工人和中国家庭——他们在国有企业改革的名义下被取代下岗，失去了终身的支持（即所谓“铁饭碗”），也失去了过去在国有企业体制下享有的社会保障网——要使他们相信，开始降低过高的预防性储蓄是可行的。有人说，“高储蓄是亚洲的一种文化现象。”我完全不同意这种说法。我认为，过度储蓄主要是一种需要，而并非文化基因使然。只要中国政府当局真正为百姓提供社会保障，劝导中国家庭降低储蓄，就可以改变储蓄动机。

Clay Chandler: 您在《金融时报》上发表的一篇文章中写道，中国针对全球金融危机采取的应对措施在恢复短期经济增长方面已经取得了成功，但同时也增大了导致长期经济问题的风险。事实上，你警告说，造成“不稳定后果”的可能性已经增大。您能对此解释一下吗？

Stephen Roach: 2008年下半年和2009年，情况相当糟糕——远比官方公布的年度GDP同比数据可能表明的情况更糟。如果你按照西方惯用的方式，根据逐个季度的数据重新计算中国的GDP，就能看出，去年下半年的经济增长率大幅下跌，几乎接近于零。

在主要依赖出口的广东省，出现了大规模解雇的情况；政府承认，至少有2,000万外来工失去了工作。因此，中国再一次迫切需要经济增长，而且是立竿见影的增长。中国对此采取的应对措施是：首先，启动了4万亿人民币的大规模经济刺激计划，其中72％投资于基础设施建设。然后，放松了对银行贷款的约束。他们创造了最高的6个月放贷纪录：在2009年1月到6月期间，贷款金额高达约7万亿元人民币。

我在为《金融时报》所写的文章中指出，在我看来，由于对增长的需求是如此迫切，中国政府只能选择在很短的时间内，尽可能获得最大的增长。他们结果刺激的或许是中国经济中最失衡的部门：固定资产投资。该部门在去年年底占到了GDP的40％，现在或许已经占到GDP的45％以上。在二战后的现代化时期，在任何主要的经济体中，我们都从未看到固定资产投资在GDP中占有如此高的比例。

Clay Chandler: 将中国视为全球经济增长新的发动机的想法是否现实？

Stephen Roach: 我认为，中国有潜力成为全球经济增长的一个主要发动机。不过，我认为，期望中国能在这次后危机时代就马上担当起这一角色并不现实。我想，中国还需要花3年（更可能是5年～10年）的时间，才能使其经济达到所需的那种平衡和规模，能够去填补由于世界上规模最大、最有活力、最强大的消费者群体（美国消费者）的衰落而将要留下的——或者正在留下的——空缺