Stephen Roach on the Next Asia: Opportunities and Challenges for a New Globalization

by Stephen S. Roach

As Morgan Stanley's chief Asia specialist, getting Asia right is Stephen Roach's personal obsession, and this in-depth compilation represents more than 70 of Roach's key research efforts not just on Asia, but also on how the region fits into the broad context of increasingly globalized financial markets. The book argues that the "Asia factor" is not a static concept, but rather one that is constantly changing and evolving. Broken down into five parts–Asia's critical role in globalization; the coming rebalancing of the Chinese economy; a new pan-regional framework for integration and competition; and a frank discussion of the biggest risk to this remarkable transformation–this book will help readers understand and profit from the world's most dynamic region.

Genres: China, Business, Asia, Economics

432 pages, Paperback

First published September 24, 2009

Reviews

[Matthew · Rating 3 out of 5]

This book reads like what it is -- a collection of essays sketching out macro themes for Asia written over 2006-2009, rather than a concerted effort to argue through a single theme. As such it is a bit repetitive and I definitely skimmed portions of it, nonetheless the format has benefits as you can see Roach banging the table on certain structural macro points time and time again over 3 years. It is interesting perspective too to hear his views on Asia pre-GFC -- a lot of the structural imbalance issues China is dealing with now are actually a resurrection of issues they were preparing to deal with in 2006 before plans got sideswiped by the crisis and they had to resort to time-tested infrastructure-related bank-funded fiscal stimulus.

Generally, Roach's big thing is: (i) Rmb revaluation will just shift the US deficit to other countries, bc the problem is a deficient savings rate, (ii) decoupling is unlikely bc pan Asia trade is just one big Asian supply chain the penultimate point of which is China.

I liked the tangential insights he makes -- the format lends itself to making quick macro sketches of certain countries without getting bogged down in detail, for e.g.:

-petrodollar recycling into the US and why it might end: the ME is reinvesting much more of the petrodollars into its own economy than before, but then again, Dubai is a mega RE bubble (this was written 2006)

-India is a far stronger micro story, but even on the macro front, the big positive is that the savings rate is now above 30%, having risen from 20% in the past; this is important bc 30% marks the level where there is sufficient savings for the country to not need to rely on foreign capital for internal investment, so it is a big macro positive

[Al · Rating 3 out of 5]

Excellent technical content and learnings in this books, that gets five stars. Editing gets one or two. The last chapters bled together and repeated key themes. This would be more compelling if the essays were better integrated and the chapters had titles (at least on audible version) to understand the build and conclusion.

[Ali K]

Macroeconomics. Started it for a class, finished it later. Repetitive but helps you get a grasp on macro imbalances

[Herzog · Rating 2 out of 5]

Because this book was a collection of essays written over the past few years, it was highly repetitive. There were several key salient points: China's is an export oriented economy and needs to ramp up internal consumer spending, the U.S. is a consumer oriented economy and needs to ramp up its savings, the likelihood of "decoupling" of the economies is small, China bashing by U.S. politicians is a significant concern and could bring on catastrophic trade wars.

To prospective readers of this book, I encourage you to read only the final chapter, it will give you the essence of Roach's argument. The book is badly in need of an editor.

[kacie · Rating 4 out of 5]

Struggled through this one.. it's like finance has a language of its own. But even with my limited knowledge, I still found it super interesting -- definitely learned a lot. It was repetitive though, which I guess is to be expected as it is a collection of essays.

[Indi · Rating 3 out of 5]

Stephen Roach positive on Asia's development