American Hubris Is China's Gain

According to its CEO Lloyd Blankfein, Goldman Sachs is doing "God's work." This quote, care of the LondonTimes(though delivered in irony, according to Goldman Sachs) was met with bewilderment at a Chinese business conference in Lisbon last week, where foreign CEOs and government officials were dumbstruck by the hubris. Many of the attendees blame Wall Street bankers like Goldman for the global financial meltdown and think the U.S. is doing a bad job of cleaning up the mess. "Do you think those quotes were made up?" asked one incredulous Latin American participant. But America's diminished position in the world was even better illustrated by how quickly the Blankfein banter faded and talk turned to China's growing clout. Goldman Sachs itself is now predicting that Chinese GDP will overtake that of America by 2027. This year, China has surpassed the U.S. as the world's largest generator of investment capital, around $2 trillion compared to America's $1.4 trillion, according to economist John Ross. Much Chinese cash is pouring in to Africa and Latin America. Amadou Hott, CEO of Nigeria's UBA Capital, said his country's future was "now more tied to the East than the West." China's growth is the reason that Latin America and Africa, for the first time in modern history, haven't been the worst hit by a global downturn. During one session in Lisbon, a Chinese entrepreneur was asked to offer advice to Barack Obama on the eve of his visit to Beijing. The answer: Get your daughters a Mandarin tutor.