Posted by: Dirk | April 28, 2009

“China is the America of this century.”

So says Harold James in his article The Geopolitical Consequences of the Financial Crisis at Project Syndicate. The whole paragraph reads like this:

China is the America of this century.  The initial stages of the credit crunch in 2007 were managed so apparently painlessly because sovereign wealth funds from the Middle East, but above all from China, were willing to step in and recapitalize the debt of American and European institutions.  The pivotal moment in today’s events came when the Chinese SWF China Investment Co. was unwilling to go further in its exploration of buying Lehman Brothers.  CIC’s turning back will be held up in the future as a moment when history could have turned in a different direction.

Harold James has more thought-provoking articles on Project Syndicate in which he applies his deep knowledge about the Great Depression. In this instance, I am not so sure whether China would have changed history by buying up all of Wall Street (and The City), but it is an interesting questions that will surely be discussed later on by economic historians.

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