Stephen Roach, the Morgan Stanley chief economist known for his pessimism on the US economy and early prediction of China’s rise, will become the firm’s Asia chairman, helping lead a push to manage more takeovers and stock sales in China. Roach, 61, will be assuming his post in June and move to Hong Kong in September, Morgan Stanley said in an e-mailed statement. He would replace Alasdair Morrison, who retired this month. According to the release, Roach will be in charge of handling the bank’s relations with governments and clients. His association with Morgan Stanley has been 25 years long and has been its chief economist for the last 16 years. The bank has for the very first time named a chief economist to such a senior position. Roach has been a frequent visitor to Asia since joining the Wall Street firm in 1982. Roach has repeatedly said that the US economy will decline, however he, as of now, proven wrong as the economic expansion is continued though at a sluggish rate. He had also predicted that China may overtake the US as the biggest contributor to global growth by 2025. He has asserted that China is at a critical stage in its extraordinary economic development and it needs to make the transition from an export and investment led growth dynamic to more of a consumer led economy. Roach has been less optimistic on the US economy. In 2005 interview, he had predicted a 40 percent chance of a US recession in the following year. However, the US economy expanded 3.3 percent in 2006, up from 3.2 percent in 2005. He said in a telephone interview, ‘My role is really getting involved with all of our senior relationships, whether they are with investors, corporates, governments. If it involves a banking transaction, I expect certainly to play a role in it’.
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