The Big Money: The Rise of Chinese Banks | Newsweek Business

China’s Big Spender
Rana Foroohar 6/27/2009 12:00:00 AM
The hottest debate over the world economy is not on the fate of America; it's on the fate of China. Will it be the worst victim, or the most successful survivor, of the global crisis of 2009? So far the news all points to success, as the Asian giant defies the old assumption that an American recession would trigger a Chinese depression. Long dependent on exports to America, China continues to grow strongly despite a collapse of exports, down 26.4 percent in May alone. The reason is growth at home, with retail sales up 15.2 percent in May, and house and car sales taking off. To some, this is evidence that China has hit a new state of development, emerging as a consumer society wealthy enough to rival America as the world's best customer, and in some ways it has. The problem is that the consumer driving the boom is not the individual, because the Chinese shopper has been in retreat in recent years. The real big spender is the government.
China’s Independence Fantasy
Zachary Karabell 6/27/2009 12:00:00 AM
China is not happy. That's the title of the bestselling book in China. The five nationalist authors say it is time for China to "split from the West," particularly the United States and the Treasury bonds that Beijing holds to the tune of $1 trillion. This desire for greater distance from America is growing: in a May poll conducted by China's Global Times, 87 percent said they were against buying more U.S. debt. Shortly before U.S. Treasury Secretary Timothy Geithner arrived in Beijing in early June, a survey of leading Chinese economists showed that 17 of 23 think U.S. bonds are "risky," that U.S. stocks pose a potential threat to the Chinese economy, and that the Chinese government should diversify its assets away from U.S. markets and toward energy and mineral resources. When Geithner assured a group at Beijing University that American bonds are a "safe" investment, they erupted in loud laughter—a rare outbreak of rudeness from an elite crowd in China.
The Capitalist Manifesto: Greed Is Good
Fareed Zakaria 6/13/2009 12:00:00 AM
A specter is haunting the world—the return of capitalism. Over the past six months, politicians, businessmen and pundits have been convinced that we are in the midst of a crisis of capitalism that will require a massive transformation and years of pain to fix. Nothing will ever be the same again. "Another ideological god has failed," the dean of financial commentators, Martin Wolf, wrote in the Financial Times. Companies will "fundamentally reset" the way they work, said the CEO of General Electric, Jeffrey Immelt. "Capitalism will be different," said Treasury Secretary Timothy Geithner.
Fearing China
Daniel W. Drezner 5/20/2009 12:00:00 AM
President Obama has finally selected his ambassador to China—and not a moment too soon. Because Ambassador-designate Jim Huntsman was a rumored GOP presidential candidate for 2012, most of the press reaction has been about the domestic political ramifications of the pick. This inside-the-Beltway focus overlooks a minor fact: Huntsman is about to become the point man for the most important bilateral relationship in the world.
GLOBAL INVESTOR
Between a Bull and a Bear
Ruchir Sharma 5/2/2009 12:00:00 AM
Is it a bird? Is it a plane? Is it superman? Investors can't seem to figure out whether the recent leaps in stock prices represent a brief uptick in a falling market or something more meaningful, even the start of a brand-new bull run. The Pavlovian impulse is to dismiss the rally as just another head fake. After all, there have been five other countertrend moves since the bear market began in October 2007, and they all petered out within a couple of months as the fundamental
CHINA
No Time to Retreat
Duncan Hewitt 5/2/2009 12:00:00 AM
You wouldn't think that the worst economic downturn in 70 years would be a good time to open a new stock exchange. But the Chinese do. After a decade of delays, Beijing has decided to debut its Growth Enterprise Market (GEM)—China's very own version of New York's NASDAQ exchange. Under rules due to take effect this month, China's "second board," located in the southern city of Shenzhen, across the border from Hong Kong, will allow companies with just three years of operation, net assets of 20 million renminbi (just under $3 million U.S.) and combined profits of just 10 million renminbi to sell stock to the public.