TEXT OF INTERVIEW
Bill Radke: Some strong evidence of economic recovery in China this morning. Factory output jumped 16 percent, the best reading in a year and a half. In fact, the head of the World Bank actually asked today, whether some Asian countries might be bouncing back too hard. He spoke as Asia Pacific leaders are preparing for the annual APEC summit. For more, let’s bring in Marketplace’s Scott Tong, live from Shanghai. Good morning.
Scott Tong: Good morning, Bill.
Radke: Scott, as sick as this economy feels, how can we be talking about overheating?
Tong: Well the concern is asset prices on this side of the world, stock and property prices. The head of the World Bank, Robert Zoellick, thinks Asian markets face a greater risk of bubbles than the developed world. He spoke in Singapore today, which is hosting that upcoming APEC summit. And Zoellick said he’s not worried about immediate bubble trouble. But if Asian asset prices become a serious issue, he says it could undermine confidence in the global recovery. And we remember, Bill, out-of-whack housing prices and stock prices are what triggered this whole crisis in the first place.
Radke: Right. So the goal is not too hot, not too cold. Which countries have that potential for overly hot porridge?
Tong: Well here in China, the stock market is up 69 percent this year. Property prices are up, and the economy is roaring ahead at almost 8.9 percent. India’s stocks this year are up more than 60 percent. And Australia’s recovery’s gone so well they’ve already raised interest rates twice to slow down their recovery. But it is a careful balance, Bill, because a lot of central bankers are concerned that their countries are not out of the woods yet. There’s a draft of the APEC summit communique that’s leaked out, and it says countries should keep up the stimulus “until a durable recovery is secured.” Bill?
Radke: Yes, thanks Scott. Marketplace’s Scott Tong, live in Shanghai.
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