‘Must China Prepare for End of U.S. Financial Hegemony?’: China Daily, People’s Republic of China
Our planetary coverage of the U.S. financial crisis continues with this somewhat jarring article from China. What could be more unnerving than having your largest creditor begin pondering your financial demise? That might be the question Americans ask themselves while perusing this op-ed article from China’s state-controlled China Daily.
Ding Yifan, a Chinese government researcher, ponders whether the world is witnessing the end of U.S. global financial ‘hegemony,’ and complains that the Bush Administration is letting banks such a Lehman Brothers fail – which had large amounts of foreign investors – while saving banks with mostly U.S. investors. He closes ominously with the question, ‘what will we do with our rising foreign reserves?’
By Ding Yifan
September 26, 2008
People’s Republic of China – China Daily – Original Article (English)
The unfolding financial crisis in the United States leads us to consider whether this signals the end of that nation’s long-established global financial hegemony.
The recent decision by the Bush Administration to set up a government body to take over all financial debt indicates its intention to rely on the market to cope with its current problems. It is expected that the U.S. government will use any means necessary to protect depositors and if the market proves inefficient, completely take over banks. But it remains unclear whether the U.S. government can bring the ongoing crisis under control.
But given their enormous losses, foreign countries which invest in the United States are in fact the biggest victims. With the widening of the subprime crisis, people expected the U.S. government to offer a helping hand to teetering financial bodies – over and above Bear Stearns. While the Bush Administration chose to inject much-needed funds into certain financial bodies, it stood idly by and watched other like Lehman Brothers fall apart.
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