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00:00How big a worry is China. You talk about a possible contagion effect. So I think it's really important to understand China in sort of the tactical short term implications and then also the structural longer term issues that are going on there . Tactically I remain pretty sanguine. I think that the government still has significant tools to actually manage the transition economically that they're going through. So monetary policy is still around four point thirty five percent. They've got a lot of wiggle room despite these reserve requirements and the changes that they've made already. They've also got a lot of wiggle room in fiscal policy. So I feel like they will manage a lot of this up lumpiness and the truth of the matter was never going to be linear anyway longer term in terms of capital labor and productivity the three key drivers of economic growth I think this still is a very compelling story there . Clearly there are challenges in terms of capital outflows which you just alluded to but I think in terms of labor both quality and quantity of labor the decision recently around the One Child Policy shows that they are making active inroads in that and of course productivity will be crucial for growth. I think why risk of contagion. People don't talk about that and you know you know contagion kind of visit was outmoded before the financial crisis. I mean if you think about Mexico 1982 the Asian crisis in 97 it was a very big deal. I do think that contagion is back in the context of transmission mechanism such as foreign direct investment and trade with China of which China has been a big player in the global markets. But I think also in terms of sovereign credit what might happen there because a number of emerging market economies have at the sovereign level issued debt in the macro in the markets and so the implications could be well felt. So are you then saying that we are at risk of seeing a debt crisis. Yeah. And in essence correct . Because for many particularly in energy and other commodity exporters they have used those collateralized those future revenues as the basis for issuing debt. And I think that there is a risk of that with the revenues going down China slowed down global demand contracting. There is a risk that they will not be able to meet those meet those requirements and those obligations. We've already started to see some countries go to the IMF window such as Ghana and I think that we will probably see a lot more write down in the next twelve months. What would you like China to do to help save the global economy recovery we're seeing right now. Well I think that you know one of the things that a lot of market participants say is that they feel that they don't communicate enough in terms of and then therefore that creates a lot of uncertainty in the markets I mean quite frankly I think that they haven't done a reasonable job but articulating their economic transformation from an export led investment driven economy into consumption. But I think perhaps many other policymakers around the world did not fully internalize what the implications of that might be with global demand of commodities and generally their outflows on the program of the outflows. So I think that in a way they maybe need to be a bit more clear and to help them manage them certainty issues that has hasn't been too conservative in its rate cuts. Yes we have seen six rate cuts but it could have done it more aggressively. Well you know that's that I think is a decision for them. I mean a lot of the debt that is held and the whole speculation on bond non-performing loans it is a very localized issue in China. So I have every faith that the policymakers there are making judgments that they think work really well for the Chinese economy. I will also stress that there is an argument not just for but for the Chinese economy but also for the U.S. Fed that they must focus on gradualism and perhaps not be too aggressive because I think there's a lot of uncertainty still in the market not just from China from Greece from the commodity markets et cetera and so to start being very aggressive. I think it's probably not the ideal you want to have some wiggle room in optionality and how public policy works. You know what Morgan Stanley says forget the Fragile Five. Now it is a troubled 10 . Your views could be good. Could it expand into more than just a trouble. Well I think look I think that it's what they're intimating varies the contagion points that we've just made . But I think more generally I am I worried about the global economy. Yes I am. I do believe that we are on a path despite the U.S. consumer despite some of the housing data that we see in the U.S. That is quite constructive. I think that fundamentally the global economy is in a precarious place. And I think that the forecasts for economic growth which we are very well know will be far below the 7 percent that you need to double per capita incomes in a generation .

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Economic Outlook: What's Ahead for China?

Dambisa Moyo, author and emerging markets economist, discusses China's slowdown, the possibility of a debt crisis in the country and China's impact on the global economy. She speaks to Bloomberg's Haslinda Amin on "Asia Edge" from the Barclays Asia Forum in Singapore. (Source: Bloomberg)

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