Stephen Roach

Stephen Roach

Stephen S. Roach, a faculty member at Yale University and former chairman of Morgan Stanley Asia, is the author of Unbalanced: The Codependency of America and China.

Latest from Stephen Roach

Macroscope | In both the US and China, a focus on ‘core’ increases susceptibility to major policy blunders

Just as a fixation on core inflation can mislead central banks, the power of a ‘core leader’ is a recipe for misdirected and ultimately unsustainable policy. The very notion of a core adds a false sense of precision when policymakers attempt to address complex problems.

Just as a fixation on core inflation can mislead central banks, the power of a ‘core leader’ is a recipe for misdirected and ultimately unsustainable policy. The very notion of a core adds a false sense of precision when policymakers attempt to address complex problems.

29 Sep 2022 - 1:02AM
The View | How China sacrificed economic growth on the altar of Xi Jinping Thought

China’s slowdown is being driven by a structural transformation of the economy, payback for past excesses and a shift in the ideological underpinnings of governance. Xi Jinping is prepared to forgo growth to cement political power and pursue his dream of national rejuvenation.

China’s slowdown is being driven by a structural transformation of the economy, payback for past excesses and a shift in the ideological underpinnings of governance. Xi Jinping is prepared to forgo growth to cement political power and pursue his dream of national rejuvenation.

25 Aug 2022 - 2:16AM
The View | China could have most to lose as crises end globalisation era

Globalisation’s defences are crumbling in a world beset by climate change, pandemics and the war in Ukraine. Mounting geostrategic tensions are the wild card, with ‘friend-shoring’ efforts and scrutiny of Sino-Russian ties raising the stakes for China.

Globalisation’s defences are crumbling in a world beset by climate change, pandemics and the war in Ukraine. Mounting geostrategic tensions are the wild card, with ‘friend-shoring’ efforts and scrutiny of Sino-Russian ties raising the stakes for China.

27 Jul 2022 - 3:57AM
The View | Three reasons expecting a soft landing for the global economy is just wishful thinking

The IMF’s latest global outlook projects a soft landing for the world economy, but there are reasons to be sceptical. Headwinds include increasingly sluggish Chinese growth, overlooked consequences of rising interest rates and inflation and overly optimistic forecasts.

The IMF’s latest global outlook projects a soft landing for the world economy, but there are reasons to be sceptical. Headwinds include increasingly sluggish Chinese growth, overlooked consequences of rising interest rates and inflation and overly optimistic forecasts.

27 Apr 2022 - 1:30AM
Opinion | Ukraine crisis: why China’s Xi Jinping will do the unthinkable and defuse the Russia threat

Putin’s war against Ukraine has turned China’s triangulation gambit – joining with Russia to corner the United States – on its head. Not only will continuing to support Russia result in sanctions that thwart China’s economic development goals, but it also risks Xi’s own place in history.

Putin’s war against Ukraine has turned China’s triangulation gambit – joining with Russia to corner the United States – on its head. Not only will continuing to support Russia result in sanctions that thwart China’s economic development goals, but it also risks Xi’s own place in history.

9 Mar 2022 - 1:47PM
The View | With high inflation and low interest rates, the US Federal Reserve is playing with fire

As high labour demand, supply chain bottlenecks and record stimulus spending fan the flames of inflation, the Federal Reserve knows it must finally take action. How to act is another matter.

As high labour demand, supply chain bottlenecks and record stimulus spending fan the flames of inflation, the Federal Reserve knows it must finally take action. How to act is another matter.

25 Jan 2022 - 2:45PM
Opinion | US Federal Reserve must get creative and act fast to end inflation spiral

Despite the flashing warning signs, the Fed remains wedded to a monetary policy born of the low-inflation past. With inflationary pressures going from transitory to pervasive, the policy rate should be the first line of defence.

Despite the flashing warning signs, the Fed remains wedded to a monetary policy born of the low-inflation past. With inflationary pressures going from transitory to pervasive, the policy rate should be the first line of defence.

24 Nov 2021 - 3:45AM
The View | China’s changing growth model, not Evergrande, is the top threat to prosperity

The new emphasis on redistribution plus re-regulation strikes at the heart of the reform that has underpinned China’s growth. The Evergrande crisis will pass, but a regulatory clampdown amid a push to redistribute wealth could rewind the Chinese miracle.

The new emphasis on redistribution plus re-regulation strikes at the heart of the reform that has underpinned China’s growth. The Evergrande crisis will pass, but a regulatory clampdown amid a push to redistribute wealth could rewind the Chinese miracle.

4 Oct 2021 - 7:32PM
The View | China’s regulation of its spirited tech sector could be a tipping point for the economy

There are legitimate reasons for China’s anti-tech campaign, but when the full force of regulation is used to strangle the business models and financing capacity of the economy’s most dynamic sector, it weakens confidence and the entrepreneurial spirit.

There are legitimate reasons for China’s anti-tech campaign, but when the full force of regulation is used to strangle the business models and financing capacity of the economy’s most dynamic sector, it weakens confidence and the entrepreneurial spirit.

29 Jul 2021 - 5:31AM
Macroscope | How the US Fed’s reassurances on inflation fears are triggering a 1970s flashback

Now as then, the Fed sees increases in the prices of food and other essentials as transitory. But the biggest parallel may be another policy blunder – as before, the Fed is keeping real interest rates depressed, which in the 1970s only fuelled inflation.

Now as then, the Fed sees increases in the prices of food and other essentials as transitory. But the biggest parallel may be another policy blunder – as before, the Fed is keeping real interest rates depressed, which in the 1970s only fuelled inflation.

26 May 2021 - 10:25PM
The View | US-China relations: why Joe Biden should go back to basics

Both sides should focus on the economic and trade issues that have long anchored the US-China relationship. That doesn’t mean dismissing other tough issues, but re-establishing common ground and trust before expanding the agenda.

Both sides should focus on the economic and trade issues that have long anchored the US-China relationship. That doesn’t mean dismissing other tough issues, but re-establishing common ground and trust before expanding the agenda.

25 Mar 2021 - 2:32AM
The View | Coronavirus vaccinations: even herd immunity may not revive America’s lost consumer spending

Notwithstanding the release of pent-up demand for consumer durables, face-to-face services, including food and entertainment services, show signs of lasting damage.

Notwithstanding the release of pent-up demand for consumer durables, face-to-face services, including food and entertainment services, show signs of lasting damage.

24 Feb 2021 - 2:09AM
Opinion | US Capitol riot: how the internet exposes the weak links in American democracy

The internet’s role in fomenting insurrection at the US Capitol has shone a light on the flaws of the West’s embrace of open-ended connectivity. The challenge remains for the West to prevent the breakdown of order in a free society.

The internet’s role in fomenting insurrection at the US Capitol has shone a light on the flaws of the West’s embrace of open-ended connectivity. The challenge remains for the West to prevent the breakdown of order in a free society.

21 Jan 2021 - 9:40PM
Opinion | The coronavirus pandemic may cast a longer economic shadow on the US than policymakers think

Mass vaccination does not provide immunity against longer-term economic damage. And research on major pandemics dating back to the 14th century suggests Covid-19’s impact on the US economy will be far-reaching and profound.

Mass vaccination does not provide immunity against longer-term economic damage. And research on major pandemics dating back to the 14th century suggests Covid-19’s impact on the US economy will be far-reaching and profound.

23 Dec 2020 - 2:36AM
Opinion | Despite coronavirus vaccine hope, US must brace itself for a winter of despair

Vaccination is unlikely to bring about so-called herd immunity until mid-2021. For a vulnerable US economy entering lockdown again, the case for a double-dip recession is compelling.

Vaccination is unlikely to bring about so-called herd immunity until mid-2021. For a vulnerable US economy entering lockdown again, the case for a double-dip recession is compelling.

26 Nov 2020 - 5:25AM
Opinion | How ‘Covid first’ China is trumping ‘America first’ in economic recovery

In 2008, China responded to the financial crisis by addressing the source of the shock itself, not the collateral damage the shock caused. Beijing’s approach to Covid-19 is similar. By contrast, the US is paying for its government’s inability or unwillingness to limit the contagion.

In 2008, China responded to the financial crisis by addressing the source of the shock itself, not the collateral damage the shock caused. Beijing’s approach to Covid-19 is similar. By contrast, the US is paying for its government’s inability or unwillingness to limit the contagion.

27 Oct 2020 - 4:50PM
Opinion | Why the US dollar is only going to fall faster and harder

Given the unprecedented erosion of domestic savings, an explosive current account deficit, and the Fed determined to keep rates flat, expect the dollar to plunge by as much as 35 per cent next year.

Given the unprecedented erosion of domestic savings, an explosive current account deficit, and the Fed determined to keep rates flat, expect the dollar to plunge by as much as 35 per cent next year.

27 Sep 2020 - 7:27PM
The View | America must brace itself for a double-dip economic recession

Financial markets’ optimism about a V-shaped recovery from Covid-19 is not supported by the history of the US business cycle. With America still struggling to contain the pandemic, the lingering fears of infection will continue to impede any lasting recovery.

Financial markets’ optimism about a V-shaped recovery from Covid-19 is not supported by the history of the US business cycle. With America still struggling to contain the pandemic, the lingering fears of infection will continue to impede any lasting recovery.

27 Aug 2020 - 2:51AM
The View | How the coronavirus may deliver a shock to the US dollar

US domestic saving, already depressed, is headed deep into negative territory. This is likely to lead to a record current-account deficit, and the US could see a 35 per cent dollar plunge over the next two to three years.

US domestic saving, already depressed, is headed deep into negative territory. This is likely to lead to a record current-account deficit, and the US could see a 35 per cent dollar plunge over the next two to three years.

25 Jun 2020 - 3:33AM
Opinion | The coronavirus crisis has finally sunk the US-China relationship. What’s next?

China’s economic rebalancing set the stage for an uneasy shift in relations, and now tit-for-tat blame over the pandemic has pitched the tension into open conflict. Both Chinese and Americans will be worse off in the new cold war.

China’s economic rebalancing set the stage for an uneasy shift in relations, and now tit-for-tat blame over the pandemic has pitched the tension into open conflict. Both Chinese and Americans will be worse off in the new cold war.

29 Apr 2020 - 4:10AM
Opinion | Why the ‘big bazooka’ used in the 2008 financial meltdown is the wrong weapon for the coronavirus crisis

The global financial crisis playbook was designed for a world facing threats to the quantity of economic growth. It cannot be the answer for a world facing a shock stemming from deficiencies in the quality of that growth.

The global financial crisis playbook was designed for a world facing threats to the quantity of economic growth. It cannot be the answer for a world facing a shock stemming from deficiencies in the quality of that growth.

21 Mar 2020 - 3:44AM
The View | Unlike during Sars, this coronavirus epidemic is hitting the global economy when it’s down

The outbreak will pass, but it is unlikely to be the temporary blip that complacent financial markets expect, given the central role China now plays in many aspects of the world economy and the vulnerabilities in major economies.

The outbreak will pass, but it is unlikely to be the temporary blip that complacent financial markets expect, given the central role China now plays in many aspects of the world economy and the vulnerabilities in major economies.

25 Feb 2020 - 10:26PM
The View | The world economy is on the precipice, and don’t look to trade growth to cushion a fall

The IMF’s latest assessment of the global outlook is sobering – a shock event will easily tip fragile economies into recession. Global trade is sluggish from the impact of protectionism. An expansion in cross-border trade, a reliable growth driver in the past, is unlikely.

The IMF’s latest assessment of the global outlook is sobering – a shock event will easily tip fragile economies into recession. Global trade is sluggish from the impact of protectionism. An expansion in cross-border trade, a reliable growth driver in the past, is unlikely.

28 Jan 2020 - 11:05PM
Opinion | For the cause of the next financial crisis, look to central banks’ overextended balance sheets

Assets of the US Federal Reserve, European Central Banks and Bank of Japan stand at 3.5 times their pre-crisis level. Protectionism, populism and political dysfunction could provide the trigger that tips vulnerable global markets into crisis.

Assets of the US Federal Reserve, European Central Banks and Bank of Japan stand at 3.5 times their pre-crisis level. Protectionism, populism and political dysfunction could provide the trigger that tips vulnerable global markets into crisis.

26 Dec 2019 - 2:53AM
Opinion | If Trump’s interest in the US-China trade war is flagging and a deal is near, what will the future look like?

The US president and China both seem ready for a trade-war truce. While fears of deglobalisation and global decoupling are overblown, the US may still divert trade away from China, at a cost to American consumers.

The US president and China both seem ready for a trade-war truce. While fears of deglobalisation and global decoupling are overblown, the US may still divert trade away from China, at a cost to American consumers.

27 Nov 2019 - 3:49AM
The View | In the rush to demonise China over trade, the West has failed to give Beijing enough credit for its green leadership

China is focusing on sustainability at a point when its per capita output is barely more than one-third that of advanced economies. A relatively poor country has made a conscious choice to shift from the quantity to the quality of growth.

China is focusing on sustainability at a point when its per capita output is barely more than one-third that of advanced economies. A relatively poor country has made a conscious choice to shift from the quantity to the quality of growth.

26 Sep 2019 - 2:25AM
Opinion | Trump’s incoherent policies take aim at a China that no longer exists

The US president, by failing to recognise a China in transition, is applying bizarre trade and economic fixes that fail to neutralise its existential threat to America and will end up destabilising the global economy.

The US president, by failing to recognise a China in transition, is applying bizarre trade and economic fixes that fail to neutralise its existential threat to America and will end up destabilising the global economy.

29 Aug 2019 - 2:04AM
Opinion | For all his bluster, Donald Trump’s approach to economics has three basic flaws. Look to 2020 for their impact

From corporate tax cuts to the trade war to putting pressure on the Federal Reserve, Trump has ignored the lessons of history and failed to grasp the link between budget deficits, tariffs and monetary policy.

From corporate tax cuts to the trade war to putting pressure on the Federal Reserve, Trump has ignored the lessons of history and failed to grasp the link between budget deficits, tariffs and monetary policy.

26 Jun 2019 - 3:11AM
Opinion | Why Donald Trump can’t make America great again by replicating Ronald Reagan’s script

Unlike Reagan who targeted Japan in the 1980s, Trump has inherited a US economy with a chronically low savings rate and that is much more globally integrated. Without the US raising national saving, trade will simply shift from China to other countries.

Unlike Reagan who targeted Japan in the 1980s, Trump has inherited a US economy with a chronically low savings rate and that is much more globally integrated. Without the US raising national saving, trade will simply shift from China to other countries.

29 May 2019 - 2:20PM
Opinion | Donald Trump’s case against China is deeply flawed and ignores weaknesses in the American economy

The US narrative on China – from the trade deficit to intellectual property theft to support for state-owned enterprises – rests on shaky foundations and does not account for America’s macroeconomic shortcomings.

The US narrative on China – from the trade deficit to intellectual property theft to support for state-owned enterprises – rests on shaky foundations and does not account for America’s macroeconomic shortcomings.

30 Apr 2019 - 5:30PM