The US is heading for a recession and the rest of the world would be "dead wrong" to think this would not impact on growing Asian economies, Morgan Stanley senior executive Stephen Roach said yesterday.
In an interview with Sky News in Australia, Roach said the US Federal Reserve Bank would "most assuredly" cut interest rates again soon to boost the economy, following last week's 25 basis points reduction.
"The US is going into recession," he said. "They [the Federal Reserve] have a lot more work to do. They could cut their policy short-term interest rate by one to one-and-a-half percentage points over the next nine to 12 months."
Roach, who is chairman of the investment bank and trading firm's Asian arm, said it was wrong to think that the rapidly developing economies of China and India could fully compensate for a US recession.
"What is interesting, and potentially disturbing, is that the rest of the world just doesn't think this is a big deal any more," he said of the potential of a US recession. "There is a view that the world is somehow decoupled from the American growth engine. I think that view will turn out to be dead wrong and this is a global event with consequences for Asia and Australia."
Roach, in Australia for a business roundtable, said economies outside of the US needed to determine how their internal consumer demand compared with demand from US consumers in terms of keeping their economies booming.
"My conclusion is -- not nearly as much as you would like," Roach said.
Growth in Asia was export led, with the US consumer often the "end game" of the Asian growth machine, he said.
"The US is a US$9.5 trillion consumer. China is a US$1.0 trillion consumer. India's a US$650 billion consumer," he said. "Mathematically, it is almost impossible for the young dynamic consumers of China and India to fill the void that would be left by what is likely to be a significant shortfall of US consumer demand."
China reported 45 new COVID-19 cases for Saturday, down from 54 the previous day, with all but one involving travelers from overseas, the country’s health authority said yesterday. In the past seven days, China has reported 313 imported cases of the novel coronavirus, but only six confirmed cases of domestic transmission, Chinese National Health Commission data showed. Most of those imported cases have involved Chinese returning home from abroad. Airlines have been ordered to sharply cut international flights from yesterday, while restrictions on foreigners entering the country went into effect on Saturday. Five more people died on Saturday, all of them in Wuhan,
KEEP AWAY: People should wear a mask in places where they cannot follow social distancing rules, the CECC said, adding that it would publish detailed guidelines today The Central Epidemic Command Center (CECC) yesterday announced 16 new cases of COVID-19, including two domestic cases, as it urged people to practice social distancing in public spaces by keeping a distance of at least 1m when outdoors and 1.5m indoors. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said that seven of the new cases tested positive upon their arrival at the airport, four were under home quarantine, one was under home isolation and two were under self-health management, while the two domestic cases sought treatment on their own. The domestic cases are a man in his
Taiwan will negotiate with the WHO about its participation without Beijing’s help and intervention as more countries, including Australia and Japan, are partnering with Taiwan to curb the COVID-19 pandemic, the Ministry of Foreign Affairs said yesterday. US Secretary of State Mike Pompeo in a telephonic roundtable with reporters on Monday also supported Taiwan’s role in the WHO, saying the US Department of State would do its best to assist Taiwan’s “appropriate role” in the world’s highest health policy setting body, Voice of America reported. In a Japan Business Press report published on Sunday, Chinese Ambassador to Japan Kong Xuanyou (孔鉉佑) said
‘HEROIC’: A lack of personal protective equipment has led to high infection rates among health workers in places like Spain and Italy, a nurses’ association said More equipment is needed to protect the world’s nurses working on the front lines of the COVID-19 pandemic to save lives, the head of the International Council of Nurses (ICN) said. “They are heroic. I think there is no other way to describe what they are doing at this moment,” said Howard Catton, a British nurse who is the council’s CEO. Infection rates of 9 percent and 12 to 14 percent have been reported among health workers in Italy and Spain respectively, he said, adding that nurses have died in the two nations, as well as Iran and Indonesia. “We have no doubt