Asia Countries Are Followers

The following comments were posted on Dow Jones Newswire.

• KUALA LUMPUR (Dow Jones)--The $827-billion stimulus package making its way through the U.S. Congress may not be large enough to substantially help the U.S. economy this year, Morgan Stanley Asia Chairman Stephen Roach said on the sidelines of a central bankers conference Tuesday.
  
  "This will not have a dramatic impact this year," he said, adding that the Obama administration may need to introduce another package at a later time.
  
  Roach also said Asian economies will likely remain in the doldrums for some time, as most are still export-led economies.
  
  "Asian countries tend to be followers, not leaders, so any recovery will depend on the recovery of the developed nations," he said.
  
  Roach also said the only possibility for an Asia-led recovery would originate in China, if the high savings rate of nearly 50% of gross domestic product translates into more consumer demand.
  
  He said the earliest Asia could see a recovery would be in the second half of 2009.
  
  Despite the fact that the crisis began in the U.S., Roach said the U.S. dollar's role as the international reserve currency "will stay for longer than people expect."
  
  He said that perhaps in 20 to 30 years, other currencies like the euro or the Chinese yuan will gain in importance.
  
  Asian central banks will continue to buy U.S. Treasurys, he said, and there won't be any aggressive selling.
  
  "Given the export-led growth structure in Asia, it's natural for them to continue to recycle a disproportionate share of their reserves into U.S. treasurys."