[Editor's Note: This interview was adapted from a recent issue of the McKinsey Quarterly, the business Journal of McKinsey & Co. It is reprinted with McKinsey's permission.]
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Asia has proven comparatively resilient against the current downturn, but hurdles still lie ahead. In order to maintain robust growth rates in the face of weak U.S. demand, the region's dynamic economies must stoke domestic consumption and embrace environmentally sustainable development policies, says Stephen Roach, chairman of Morgan Stanley Asia (NYSE: MS) and author of "The Next Asia: Opportunities and Challenges for a New Globalization."
Clay Chandler, Asia editor with McKinsey & Co.'s publishing group, spoke with Roach in Hong Kong recently. During the interview, Roach analyzed the prospects for increased integration and cooperation between the region's economies; explored the pitfalls and potential for countries like India and Japan; and considered whether the "Asian Century" has finally arrived.
Here is the text of that interview.