In one important sense, these concerns are understandable: both economies depend heavily on the broader global climate. China is sensitive to downside risks to external demand – more relevant than ever since crisis-torn Europe and the United States collectively accounted for 38% of total exports in 2010. But India, with its large current-account deficit and external funding needs, is more exposed to tough conditions in global financial markets.
Yet fears of hard landings for both economies are overblown, especially regarding China. Yes, China is paying a price for aggressive economic stimulus undertaken in the depths of the subprime crisis. The banking system funded the bulk of the additional spending, and thus is exposed to any deterioration in credit quality that may have arisen from such efforts. There are also concerns about frothy property markets and mounting inflation.
While none of these problems should be minimized, they are unlikely to trigger a hard landing. Long fixated on stability, Chinese policymakers have been quick to take preemptive action.
That is particularly evident in Chinese officials’ successful campaign against inflation. Administrative measures in the agricultural sector, aimed at alleviating supply bottlenecks for pork, cooking oil, fresh vegetables, and fertilizer, have pushed food-price inflation lower. This is the main reason why the headline consumer inflation rate receded from 6.5% in July 2011 to 4.2% in November.
Meanwhile, the People’s Bank of China, which hiked benchmark one-year lending rates five times in the 12 months ending this October, to 6.5%, now has plenty of scope for monetary easing should economic conditions deteriorate. The same is true with mandatory reserves in the banking sector, where the government has already pruned 50 basis points off the record 21.5% required-reserve ratio. Relatively small fiscal deficits – only around 2% of GDP in 2010 – leave China with an added dimension of policy flexibility should circumstances dictate.
Nor has China been passive with respect to mounting speculative excesses in residential property. In April 2010, it implemented tough new regulations, raising down-payments from 20% to 30% for a first home, to 50% for a second residence, and to 100% for purchases of three or more units. This strategy appears to be working. In November, house prices declined in 49 of the 70 cities that China monitors monthly.
Moreover, it is a serious exaggeration to claim, as many do today, that the Chinese economy is one massive real-estate bubble. Yes, total fixed investment is approaching an unprecedented 50% of GDP, but residential and nonresidential real estate, combined, accounts for only 15-20% of that – no more than 10% of the overall economy. In terms of floor space, residential construction accounts for half of China’s real-estate investment. Identifying the share of residential real estate that goes to private developers in the dozen or so first-tier cities (which account for most of the Chinese property market’s fizz) suggests that less than 1% of GDP would be at risk in the event of a housing-market collapse – not exactly a recipe for a hard landing.
As for Chinese banks, the main problem appears to be exposure to ballooning local-government debt, which, according to the government, totaled $1.7 trillion (roughly 30% of GDP) at the end of 2010. Approximately half of this debt was on their books prior to the crisis.
Some of the new debt that resulted from the stimulus could well end up being impaired, but ongoing urbanization – around 15-20 million people per year move to cities – provides enormous support on the demand side for investment in infrastructure development and residential and commercial construction. That tempers the risks to credit quality and, along with relatively low loan-to-deposit ratios of around 65%, should cushion the Chinese banking system.
India is more problematic. As the only economy in Asia with a current-account deficit, its external funding problems can hardly be taken lightly. Like China, India’s economic-growth momentum is ebbing. But unlike China, the downshift is more pronounced – GDP growth fell through the 7% threshold in the third calendar-year quarter of 2011, and annual industrial output actually fell by 5.1% in October.
But the real problem is that, in contrast to China, Indian authorities have far less policy leeway. For starters, the rupee is in near free-fall. That means that the Reserve Bank of India – which has hiked its benchmark policy rate 13 times since the start of 2010 to deal with a still-serious inflation problem – can ill afford to ease monetary policy. Moreover, an outsize consolidated government budget deficit of around 9% of GDP limits India’s fiscal-policy discretion.
While China is in better shape than India, neither economy is likely to implode on its own. It would take another shock to trigger a hard landing in Asia.
One obvious possibility today would be a disruptive breakup of the European Monetary Union. In that case, both China and India, like most of the world’s economies, could find themselves in serious difficulty – with an outright contraction of Chinese exports, as in late 2008 and early 2009, and heightened external funding pressures for India.
While I remain a euro-skeptic, I believe that the political will to advance European integration will prevail. Consequently, I attach a low probability to the currency union’s disintegration. Barring such a worst-case outcome for Europe, the odds of a hard landing in either India or China should remain low.
Seduced by the political economy of false prosperity, the West has squandered its might. Driven by strategy and stability, Asia has built on its newfound strength. But now it must reinvent itself. Japanese-like stagnation in the developed world is challenging externally dependent Asia to shift its focus to internal demand. Downside pressures currently squeezing China and India underscore that challenge. Asia’s defining moment could be hand.
Stephen S. Roach, a member of the faculty at Yale
University,
is Non-Executive Chairman of Morgan Stanley Asia
and the author of The Next Asia.
Stephen S. Roach: 印度風險高於中國
中印兩國將成為全球經濟下一個受害者的擔憂越來越強。亞洲發展中國家及新興工業化經濟體2010年－2011年均增長率為8.5％，遠高於世界其他國家和地區。如果中印兩國經濟下滑，亞洲將會陷入危險之中，且全球經濟衰退也將難以避免。
從中印經濟嚴重依賴於全球環境這個意義上講，這樣的擔心是可以理解的。中國對外部需求的下行風險十分敏感，而印度則因其龐大的經常賬戶赤字和外部資金需求，將更多受到全球金融市場的影響。但兩國經濟硬著陸的擔憂被過分誇大，特別是中國。的確，中國正為其在危機中激進的經濟刺激政策而付出代價。大部分額外支出來自於銀行系統，銀行因此可能出現信貸質量惡化。此外，還存在有關房地產市場泡沫化和通脹持續攀升的擔憂。
儘管上述問題不容小覷，但其引發經濟硬著陸的可能性不大。一直關注經濟穩定的中國決策者已采取預防性措施，並成功將通脹控制住。政府在農業部門采取了旨在緩解豬肉、食用油、蔬菜和化肥等供應瓶頸的行政措施，成功控制了食品價格的上漲，CPI因此降至2011年11月的4.2％。此外，中國央行2011年三次加息，如果現在經濟狀況惡化，央行擁有足夠空間放松貨幣政策。存款准備金率也是如此，如果情況需要，中國擁有更大的政策靈活度。
中國對其愈演愈烈的房地產過度投機也采取了積極對策。2010年4月，中國實施了嚴厲的樓市新政，將首次置業的首付比例從20％調至30％，二次置業提高至50％。這項政策似乎收到了效果，2011年11月，中國70個大中城市中，新建商品住宅（不含保障性住房）價格下降的城市有49個。
有人宣稱，中國經濟是個巨大的房地產泡沫，這是一種嚴重誇張的說法。的確，中國全社會固定投資已接近GDP的50％，但住宅及非住宅投資合計僅占其中的15％-20％。具體到樓面面積，住宅建設佔據了中國房地產投資的半壁江山。清理十幾座一線城市私營開發商開發的住宅地產表明，如果房地產市場陷入崩潰，僅有GDP的1％將會受到威脅，而這並不會切實導致中國經濟硬著陸。
至於中國的商業銀行，主要問題似乎是地方政府債務膨脹帶來的。截至2010年底，地方政府債務總值達10.7萬億元（合1.65萬億美元），占GDP比重26.9％。而大概近半數的政府債務是危機前遺留下來的。刺激政策導致的一些新增債務可能出現問題，但持續的城市化進程為基礎設施開發和住宅及商業建設投資提供了需求方面的支撐。這些因素緩和了信貸質量風險，加之65％左右的存貸比相對較低，可為中國的銀行系統提供必要的緩衝。
印度的問題則相對嚴重。作為亞洲唯一的經常賬戶赤字的經濟體，人們很難對它的外部融資問題掉以輕心。而印度的真正問題是，其政府政策的回旋余地遠沒有中國那麼大。首先，盧比幾乎陷入了自由落體，這意味著自2010年就開始上調基准利率以應對通脹的印度儲備銀行，很難切實放松貨幣政策；其次，政府綜合大規模預算赤字占GDP的9％左右，嚴重限制了印度的財政政策自由。
雖然中國經濟狀況好於印度，但中印兩國出現經濟崩潰的可能性不大。如沒有進一步的經濟衝擊，亞洲地區不太可能出現經濟硬著陸。如今，歐洲貨幣聯盟破壞性解體的可能性切實存在。如這種情況發生，中印和絕大多數世界經濟體可能面臨嚴重困難——中國出口驟減和印度外部融資壓力驟增。雖然我仍對歐元持懷疑態度，但我相信，推動歐洲融合的政治意願將占上風。因此，貨幣聯盟解體的可能性不大。
在政治經濟虛假繁榮的引誘下，西方國家浪費了自己的力量，而在戰略極穩定的驅動下，亞洲國家的力量卻得到了加強。但現在亞洲必須實現自我重塑，因為發達國家出現的日本式停滯正挑戰著依賴外部需求的亞洲，亞洲需要轉向依賴內部需求。
作者為耶魯大學教授、摩根士丹利非執行主席
