Anti-China protectionism could rise in the West
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Export sector strongly driving China's economy since 2000 risks rising anti-China protectionism in the West, said Stephen Roach, chairman of Morgan Stanley Asia, at a forum in Hong Kong Wednesday.
"China's exporters are still competitive, but the external demand is not there in the post-crisis period," he said at the Asia Financial Forum.
Roach cited multi-year pullback of U.S. consumption, the biggest consumption market in the world, and potential trade friction, or protectionism.
Meanwhile, the unemployment rates stand around 10 percent in the U.S. and Europe, and there is large trade deficits between China and Europe, and between U.S. and China, he said.
"I think there is growing chance that some of the product by product trade sanctions we have seen imposed by the U.S. and the E. U. Community in the final months of 2009 could spread," he said, adding "This worries me a lot."
Over the three-year period of 2005 and 2007, the U.S. Congress introduced 45 separate pieces of anti-Chinese legislation, but not one of them passed, he said.
"The reason is the unemployment rate in the US during the period averaged 4.7 percent. It is more than double today," he said.
As the U.S. Congress faces mid-term election later this year, this is going to be an enormous political pressure, "to be aggressive on the trade agenda," he said.
