China Has No Hard Landing Risks And Optimistic About US Economy

Bernanke, former chairman of the US Federal Reserve (/FED), said recently that the market should not be worried about China's economic slowdown because China had no risk of a hard landing and stressed that the US interest rate hike should be seen as a positive sign of the US economy.

In a public visit to a private forum in Seoul on Wednesday, Bernanke said that the expected rise in the US interest rate would be like a climax, which would only have a slight negative impact on Korea.

"There may be some volatility in the market.

But countries like South Korea are in a favorable position because South Korea has very good policies and systems.

South Korea is not a country that is weak or underdeveloped and does not know how to deal with capital flows.

Bernanke also said,

Raising interest rates will be a good thing to cheer.

The market expects the Federal Reserve to raise interest rates by the end of this year.

Bernanke is currently a member of the Brookings Institution and is also a consultant to the bond giant PIMCO and hedge fund Citadel.

"I don't know when."

"But once the rate rises, it will be good news, not bad news, because that means the US economy is strong enough."

Bernanke also said that China's economic slowdown is necessary because China needs to make the long-term growth model more sustainable.

"China grows 10% annually.

This is achieved through massive capital investment and iron and steel plants.

Exports are heavily dependent on exports, "he said.

"As China becomes richer and more complex, this growth will no longer be successful."

He also said, "optimism" that China's economy will not hard landing.

Japan has also made progress with the policy of "three arrows" to boost its growth, and said Japan's active monetary policy is "necessary".

"I am encouraged by what I saw and heard in Japan.

But the slow growth of population and fundamental problems will be difficult to overcome.

They will not grow as fast as they did in 1970s, but they will be better than in the past 20 years, "he said.

Referring to the Asian infrastructure investment bank (AIIB, Asia Investment Bank), Bernanke said that Asia Investment Bank will create opportunities for more useful construction projects around the world.

"First of all, what we care about is that international institutions can play a good role.

So there is the world bank, and now it is Asia Investment Bank, "he said.

"The more the better."