Asian ‘downturn’ is just a correction, says ex-Telstra CEO David Thodey

CSIRO and Jobs for NSW chairman, David Thodey, says Asia is going through a correction and not a downturn. Photo: Louie DouvisFormer Telstra boss David Thodey says Asia’s economy is suffering “a correction it had to have” and the region will bounce back to growth.
Shanghai night field

Mr Thodey spoke to Fairfax Media after launching Jobs for NSW, which is a $190 million government fund designed to finance propositions that can generate employment in the state.

He will help run the body as its first chairman alongside his other duties as the chair for the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

But despite global markets being pummelled by repeated falls in Asia’s stock markets after China’s ‘Black Monday’ this week, Mr Thodey was confident that the region would continue to offer strong growth.

“I personally don’t think it’s a long term thing,” he said. “It was a correction they needed to have because there was too much heat in the market.

“But the fundamentals of China … the advancement of that population moving from a degree of low income into middle income, and when you look at the aspirations of people in education and to have a better quality of life – when you see those fundamentals you know that the economy has got to grow.”

Telstra under Mr Thodey launched several ventures into the Asian region including a joint-venture partnership with Telkom Indonesia and the purchase of telecommunications provider Pacnet for $US697 million.

Mr Thodey’s comments echo those of several Australia chief executives who moved quickly to tell investors that Asia was merely going through a correction rather than a long-term downturn.

ANZ Banking Group chief executive Mike Smith said there was still “huge potential” for growth in China and some experts pointed to stability in 10-year bond rates as evidence that the equities market rout was a short-term phenomenon.