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Financial storm and China

Duration:
18 minutes
First broadcast:
Wednesday 06 May 2009

Looks at China. Is the financial storm a blessing in disguise - because it is forcing China, to focus on selling to its own consumers rather than than the rest of us?

The future of Asia is not, any more, about churning out products to sell overseas.

That was the message from this week's Asian Development Bank meeting, which officially declared that the era of rich Western countries with unlimited appetite for Asian exports has passed.

The way ahead is for Asian consumers to spend more at home - to 'avoid economic meltdown.' Take China - its leaders are trying to turn around one of the biggest economic supertankers in the world - to focus on domestic demand rather than exports.

It is spending more than $500bn pumping money into the economy to support its consumers, and it has promised to improve social welfare benefits.

Some economists see signs things are improving already, and they have raised their predictions for China's growth, among them, Goldman Sach's chief economist Jim O'Neill.

He thinks the economic storms will be a boon to China in the end - because they are bringing about much-needed change.

But it is rosy view which is not shared by Hong Kong-based economist David Roche, the founder and president of Independent Strategy.

Lesley Curwen put it to him that China would benefit in the end, from being forced to focus on its home markets.

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