Archive for September 29th, 2008

Monday, September 29, 2008

Did China and Japan push US government to intervene?

The Japanese banks are back, says the Economist. And the Chinese banks have started playing a big global role, as the current US financial crisis is showing, according to Frank Sieren, a German author and China correspondent in an article in Die Zeit (printed edition) of September 25. The Japanese banks are buying themselves into American banks now. A Chinese state fund (CIC apparently) had entered both Blackstone and Morgan Stanley (about ten per cent in the case of the latter) earlier. Probably, the Chinese underestimated the problems in the pipeline at the time. Both Japan and China seem to have put pressure on the US government recently to start a rescue scheme.

China and Japan have in all likelihood decided to act together, to protect their investors´interests. How strongly Beijing waved the Dollar currency reserves around and threatened to change them into Euros is hard to tell, but that did provide leverage, of course.

China is still keeping a low profile – but not as low as it used to. A China Daily commentary is striking a rather new note: The US government has its own criteria in determining what it ought to rescue, and Lehman Brothers was left to its own devices because of its high proportion of foreign investment. As a result, foreign investors suffered more than their US counterparts from the collapse of the century-old financial body.”

China Daily as the voice of the Chinese bankers – Don´t mess with us.

This should be food for thought for the American voters. Foreign debts are political.

And the world´s export champions should get prepared for a world where America is buying less.

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