Morgan Stanley CEO upbeat on Chinese economy

GMT 00:01 2015 Saturday ,30 May

Arab Today, arab today Morgan Stanley CEO upbeat on Chinese economy

Morgan Stanley CEO James P Gorman
Beijing - XINHUA

Despite lackluster economic indicators, the head of Morgan Stanley upheld his optimistic outlook on the Chinese economy.

"I remain very positive on China, and my position is unchanged," James P. Gorman, chairman and CEO of the leading global investment bank, told Xinhua on Thursday.

China's economy expanded 7 percent in the first quarter of 2015, its lowest reading since the global financial crisis, and foreign trade and industrial output data have given no cause for celebration.

Pessimists have voiced concerns about economic prospects, with some predicting an even slower pace of growth for the rest of the year.

However, Gorman downplayed the impact of the retreating growth rate as China undergoes an economic overhaul.

The sheer size of the economy, after years of rapid 10-percent growth, means that it is the right time to shift gears to a lower but more sustainable growth rate, he said. The slowdown has provided the space to focus on sustainability and the improvement of people's livelihood.

"A growth rate of 6 to 7 percent is very attractive and everywhere else in the world would love that kind of speed," he said.

China's focus on slower but higher quality growth has been a success, he added.

A pioneer in exploring the Chinese market, Morgan Stanley has witnessed the country's rise. It celebrated its 20th anniversary in China in 2014 with more than 1,000 local employees.

"China is a key part of our future growth," said Gorman while attending the company's first China Summit held in Beijing, which brought together more than 1,100 global investors and representatives from hundreds of corporations looking for new opportunities in the country.

In the first quarter of 2015, Morgan Stanley's income from continuing operations reached 2.4 billion U.S. dollars in the global market, up from 1.5 billion U.S. dollars registered in the same period last year.

When commenting on earlier media reports on the withdrawal of foreign companies, Gorman said "he will be very surprised if major global corporations are pulling back from China, where economic growth is likely to be a large part of the world for the next 20 or 30 years."

Gorman expects continued reforms to provide major impetus in the long run thanks to government efforts to drive domestic demand, consolidate state-owned enterprises and liberalize the financial markets.

As to the possibility of the next global financial crisis, Gorman said the financial system is much safer than it has been for many decades and dramatically different from what it was seven years ago when the financial crisis happened.

Gorman said the world economy is on an upward swing in aggregate, citing the improving U.S. economy, a faster-than-expected recovery in Europe and promising reform in Japan, but predicted that certain economies such as South America will have a hard time.

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