Stephen Roach on the unhealthy economic codependency of China and America


The former chairman of Morgan Stanley Asia discusses China’s economy, how it interacts with America’s, and how both sides can address imbalances.

Stephen Roach is a senior fellow at Yale University’s Jackson Institute for Global Affairs and a senior lecturer at the Yale School of Management. He was formerly the chairman of Morgan Stanley Asia and the firm’s chief economist, positions of immense influence on Wall Street. His longtime study of globalization has led to many books, most recently Unbalanced: The Codependency of America and China in 2014. He also writes for Project Syndicate.

Stephen joins Kaiser and Jeremy on Sinica to discuss many of the findings of his book, and what has changed since it was published. The topics include:

  • The unhealthy codependency between the economies of China and America, and the inverse nature of their savings rates, investment rates, labor, and consumption.
  • How much of the West has relied on economic policies that promise “false prosperity,” and how China may fall into the same trap.
  • Where the U.S. trade deficit with China actually comes from.
  • Whether savings rates in China are changing dramatically, or will change soon.
  • Why Xi Jinping has formed leading small groups on economic policy, and what that means for the National Development and Reform Commission (NDRC) and China’s economic direction.
  • The path toward rebalancing, for both the U.S. and China.


Jeremy: The literary website The Bitter Southerner, which covers the American South from a broad-minded perspective that Yankees often overlook.

Stephen: The Great Convergence: Information Technology and the New Globalization, by Richard Baldwin. It forced the former chief economist of Morgan Stanley to rethink many of the ideas he had about globalization.

Kaiser: An app called Audm, which has audiobook narrators read aloud long-form articles from outlets such as the Atlantic and the New Yorker.