Posted on 09/27/2008 12:03:35 PM PDT by Syncro
As the world turns to China for the confidence of economic growth, China is hoping the US congress to pass the $700 billion bailout plan decisively since it has been anxious on the security of its hundreds of billions of dollar-dominated assets.
As drastic disputes over the bailout plan were taking place in the US congress, on the summer session of Davos World Economic Forum held in Tianjin, a port city 100 miles east of Beijing, Chinese top bankers showed their support to the plan. “The rescue package should be launched timely, and the plan should be correct. The US government needs to make it clear the discount rate at which it takes over non-performing assets, the business model of former investment banks that have just transformed into commercial banks, way of supervision, etc.,” said Jiang Jianqing, the Chairman of Industrial and Commercial Bank of China (ICBC).
Showing his confidence, the Chinese top banker still keeps humble. “The US will still lead the world’s financial system after it goes through the crisis, but there will be some changes, as regional powers and markets will become more important. 45% of China’s bond market, and 22% of the world bond market are related to the US market. So we have bought subprime mortgage bonds, Fannie Mae and Freddie Mac bonds, and Lehman Brothers bonds. Both China and the world’s financial markets have focused too much on the US. ICBC will take good care of its purse, and has no interest in fire sale. We aim to be a strategic investor” said Jiang Jianqing.
Guo Shuqing, the Chairman of China Construction Bank, also said the US government could rescue its financial system. Although China has suffered a good deal in the financial crisis, China will still emphasize that “the US financial system is not the US’s, but the world’s”.
“If it is good for US, it is good for the world,’ Guo echoed what President Hu Jintao and Premier Wen Jiabao had said on cooperation with the US government.
The anchor of a panel discussion said to Liu Mingkang, chairman of China Banking Regulatory Commission that this year is a turning point as China’s contribution to the demand of global economy has for the first time exceeded the US’s. He wondered at a moment that the Wall Street, and the whole world, is in great need of confidence, can China bring confidence to the world economy, and if it can, how will China do?
To keep Chinese economy growing. Liu told global business leaders that the Chinese economy is “quite okay”, though growth may come down from 11% to 9%. “This is good for China. China doesn’t need speed first; China needs quality first.”
Stepphen Roach, Chair of Morgan Stanley Asia believes once China’s economy slows down, non-performing loan ratio of Chinese banking industry will increase. So he asked whether this together with the US financial crisis would affect the reform and opening up of China’s financial system.
Liu suggested that other countries learn from the close macroeconomic management and supervision that China has excised in recent years. “When the U.S. had its zero down payment scheme and reverse mortgage loans, we thought it was ridiculous,” Liu remarked in fluent English.
He implicitly criticized the US financial supervision. “We have been learning in past 30 years. But now we find our teacher is wrong. We’ll still keep learning afterwards, but we’ll also use our own brain more often.”
“What we have is international cooperation. The current crisis is global in nature but regulation is still based on the national.” He said.
On the convention usually led by the US and the World’s 500 powers, the crisis on the Wall Street has greatly boosted Chinese entrepreneurs’ confidence. Fu Chengyu, Chairman and CEO of China National Offshore Oil Corporation (CNOOC), sees the energy and economic problems from the performance of US dollars. He observed that the price of oil, is closely related to the performance of the US dollar, but it is difficult to predict the greenback will be in six months.
Thousands of business leaders and journalists worldwide gather in Tianjin, a port city east of Beijing, to see whether China is able to sustain the growth of the world economy. Apparently China gives priority to fixing its own economic problems.
Some bankers wondered whether China’s $1.8 trillion foreign currency reserve would contribute to relieve the lack of liquidity of the US financial system. Peter Mandelson, Trade Commissioner of the European Union, said in future the world would be more willing to receive sovereign wealth funds including those from China. “Sovereign wealth fund would be savior wealth fund.” He said.
But China prefers that the US could bail out the financial crisis on its own, hoping the US government’s $700 billion bailout plan could be approved by the congress as soon as possible.
Of course they want us to commit suicide. Must be running out of melamine, etc.
Of course they want the bailout, and have said if this isn't fixed with out their monetary help they will stop those billions per day loans
They have us by the ying yang?
If the Chinese want it , it must be the wrong thing to do. Do not trust the heathen Chinee.
Like anything from the Left and its dying OldMedia, when the Chinese favor something, it is best to do a 180 and go COMPLETELY in the other direction.
I was still somewhat warm to the bailout, but that seals it. The Chinese are not our friends.
Henry Paulsons net worth has been estimated at over US$700 million.[9] Paulson has personally built close relations with China during his career. In July 2008 it was reported by The Daily Telegraph that: “Treasury Secretary Hank Paulson has intimate relations with the Chinese elite, dating from his days at Goldman Sachs when he visited the country more than 70 times.”[10]
[edit] Civic activities
Paulson has been described as an avid nature lover.[11] He has been a member of The Nature Conservancy for decades and was the organization’s board chairman and co-chair of its Asia-Pacific Council.[7] In that capacity, Paulson worked with former President of the People’s Republic of China Jiang Zemin to preserve the Tiger Leaping Gorge in Yunnan province.
Paulson is also on the Board of Directors of the Peregrine Fund; was the founding Chairman of the Advisory Board of the School of Economics and Management of Tsinghua University in Beijing;
No they are not.
But our politicians and financial people depend on their money
It's all about solvency. We need to drill and pump our oil, then we will be well on our way to not spending $700 billion (ironic number isn't it) on foreign oil each year.
They probably called in their markers. Guess this means they’ll be siezing any American assets within their reach.
“But our politicians and financial people depend on their money.”
And much of “their” money, is really our money, as Americans continue to buy Chinese products, many of which are produced using technology and equipment that was formerly American.
You vill repeat:
“Free trade” is glorious.
“Free trade” is glorious.
“Free trade” is glorious.
Now all rise and praise our great leader, “free trade”.
I agree! Whatever is good for the Chi-coms MUST be bad for us. 'Ah so...No bailee out foe Yu - fu man chu!
This is not surprising. America as a debtor nation has historically been good for the Chinese economy ...
“Liu suggested that other countries learn from the close macroeconomic management and supervision that China has excised in recent years. “When the U.S. had its zero down payment scheme and reverse mortgage loans, we thought it was ridiculous,” Liu remarked in fluent English.”
Many people on this forum thought the same, and were well aware an unsustainable real estate bubble was being tied up with mortgages of dubious reliability on payments, a recipe for complications.
One can only ask why the fed (greenspan) essentially ignored this. By the time bernanke came in it may have been far too late structurally, though it seems there was a ‘wait and see’ approach there as well as to what would need to be done.
What we are engaging in with the near slave-labor, tariffs-at-the-border,top-down control Chinese, could hardly be termed “free-trade.
If Red china is for it, that’s one more very good reason to be against it.
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