Angst over the world economy, optimism over China's long-term prospects, and a Latin America with more self-inflicted problems than imported ones were the themes developed by economist Joseph Quinlan, speaking at the recent CFO forum organized by Latin Trade Group in Miami. Quinlan, managing director and chief market strategist for U.S. Trust, Bank of America Private Wealth Management, shared a positive view on the evolution of the U.S. economy, but with the caveat that his optimism only extends as far as a growth cap of 2 percent.
"I'm kind of concerned about the global economy, very concerned about China in the middle term- not in the long term- and in terms of the U.S., I am more optimistic, bullish," Quinlan told the Oct. 28 meeting in the offices of Greenberg Traurig law firm in downtown Miami.
The economist described the international panorama in detail, paying special attention to China. He said that the Asian giant is "over-invested and deeply indebted" as a result of all the infrastructure it has built in its race to modernize, and he put China's present growth in real terms at 4 percent, ("but they do not say so") with a prospect of "sluggish" growth from now until 2020.
The big surprise for analysts this year is that China didn't grow as much as they expected, he said. Nevertheless, Quinlan reasoned that while the present rate is lower, it applies to a much higher GDP base. China is coming off smoldering growth rates of 10 percent per year for three decades. "If it grows 5 percent (now), that's better than when it was growing at 10 percent per year but from the previous (lower) GDP," Quinlan summarized. This makes him bullish on the Chinese economy, long term.
Quinlan thinks the next step in the development of China's economy is to move to a stage of higher consumption and services. But he said this might take two decades to achieve because "they aren't so dynamic in that."
In his critical analysis of the international situation, Quinlan didn't condescend towards Latin America. He said he sees specific, local problems in...