Andy Xie, independent economist shared his insights on the Chinese economy in a recent interview with MarketWatch. Dr Xie opined that China’s trajectory resembled the one that led to the Great Depression, when the expansion of credit, loose monetary policy and a widespread belief that asset prices would never fall contributed to rampant speculation that ended with a crippling market crash.
Here are some of the article’s highlights:
“The government is allowing speculation by providing cheap financing,” Xie told MarketWatch. China “is riding a tiger and is terrified of a crash. So it keeps pumping cash into the economy. It is difficult to see how China can avoid a crisis.” Andy Xie said.
Xie, meanwhile, says he is doubtful of the Communist’s Party’s ability to manage and grow China’s economy — but believes that, if they become more hands-off, the country could become the world’s leading economic force. At the core of Xie’s concerns about China is the contention that the government is doing more harm than good.
“If government takes a step back instead of dominating the economy so much, China can be twice as big as the U.S. in 20 years,” he said.
Despite his frustration, however, he occasionally belies immense pride in his country and bemoans the fact that the global community may be underestimating China’s potential.
“The economists in the West who say that China isn’t very important are wrong,” he said. “China isn’t an emerging economy. It is the only country that caught up with the West, and it will shape the path of the global economy in the future.”
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Dr. Andy Xie 謝國忠 is a renowned Chinese economist based in Shanghai who has been named one of the “50 Most Influential Persons in Finance” by Bloomberg.
Dr. Xie’s skill and has been tried and tested through the years. He is one of the few economists who has accurately predicted economic bubbles including the 1997 Asian Financial Crisis and the more recent subprime meltdown in the United States.
He joined Morgan Stanley in 1997 and was Managing Director and Head of the firm’s Asia/Pacific economics team until 2006. Before that, Dr. Xie spent two years with Macquarie Bank in Singapore an associate director in corporate finance and five years as an economist with the World Bank. Dr. Andy Xie is currently a director of Rosetta Stone Advisors.
Dr Xie earned a PhD in economics in 1990 and an MS in civil engineering in 1987 from the Massachusetts Institute of Technology.