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.

5 Comments to “Did China and Japan push US government to intervene?”

  1. This is interesting. I’m an idiot when it comes to global (or domestic) economics, thank you.

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  2. Hi Man in the Middle,
    I’m a half-idiot when it comes to this topic. I know something about business administration, but when it comes to national and global economics, I’m just feeling my way. Anyway, I’ll add more over time, and I’m always grateful for comments, corrections and additions.

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  3. Foreign debts are indeed political, as you say, and they are global too, since the economies of all nation states are now more interconnected than ever.

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  4. Read a rather odd article in the (Euro-sceptic leaning) Telegraph today about how the decision to bail out AIG followed behind-the-scenes lobbying from the French finance minister – AIG insured three French banks. The author also seemed to be of the opinion that French banks were leveraged to an extent similar to that of Anglo-American banks, and that the same might be true of banks in the rest of Europe. Of course, there’s no knowing if any of this is true or not. Check out the piece for yourself:

    http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3118994/Financial-Crisis-So-much-for-tirades-against-American-greed.html

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  5. Hi FOARP, thanks for the link. It is an interesting perspective on Euroland, but this line of the Telegraph goes way beyond what is likely to happen (I think):
    “As events now unfold with vertiginous speed, we may find that it destroys the European Union instead.” – referring to the ECB’s currency policy.
    Both the currency and the European Union will still be around next year at the same time.
    Any bets?
    As for alleged French intervention in Washington, concerning AIG, I’ve learned at least one thing from the current financial crisis so far:
    When big foreign investment is at risk, phone calls will be made.
    Nothing original, but the beginning of my systematic info collection. 😉
    Tomorrow is a public holiday here, so there’s lots of time for that.

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