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"China does represent maybe more global risk than anything in
the world today," he said at a banking conference in Acapulco,
Mexico.
Fink, who heads the world's largest investment management firm,
said China's transition from an export-driven economy to a
service-oriented economy requires reforming and merging its
state-owned companies, which will reduce jobs, while creating
more jobs in the service sector. He also said the country is
recognizing a need to slow the growth of its balance sheet.
Fink also inveighed against negative interest-rate policies by
central banks, saying the easy monetary policy stance destroys
retirement savings and prevents consumption.
"Just like a relative who stays too long at your house, I think
they stayed too long with the same policies," Fink said of
central bankers. "Let's be clear: Negative interest rates are
terrible."
Fink was particularly critical of Japan's progress on economic
reforms. He said the country's aggressive monetary policy -
including negative rates - needs to be coupled with a path to
faster growth. He said India, too, needed reforms, in its case
to the country's bureaucracy.
In the wide-ranging speech, Fink said Europe's economy looks
good compared with where the region had been during "the last
few years" but that "an inch below the surface it is terrible"
given ongoing risks to Europe's banking system.
Yet Fink said he sees a British exit from the European Union as
unlikely and described Spain's acting Prime Minister Mariano
Rajoy as running "one of the best governments in the world"
given significant economic reforms.
Fink also said it is hard for him to see oil prices above $60 or
below $30 per barrel for a long period of time.
"We are going to have lower oil prices for longer, and I think
natural-gas prices are going to be higher sooner," he said.
He added that Mexico's peso remains inexpensive compared with
the U.S. dollar, a potential opportunity for investors.
BlackRock, the New York-based asset management company, oversaw
$4.6 trillion in assets globally as of Dec. 31, 2015.
(Writing by Trevor Hunnicutt; Editing by Tom Brown and Matthew
Lewis)
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