US to blame for financial crisis, says China

[cal04]

Source: Agence France-Presse

US mistakes are the root cause of the global financial crisis, a senior Chinese central bank official said overnight, rejecting criticism of China's high savings rate and booming trade surplus.

"Errors made in US economic policy-making, financial supervision and markets are the ultimate causes of the crisis," said Zhang Jianhua, research head at the People's Bank of China, in an opinion piece carried by the People's Daily.

Some observers in the West are blaming China and other nations' high savings rate and trade surplus for fuelling excess consumption and asset bubbles in the United States, he said.

"Such views are ridiculous and irresponsible in the extreme," Mr Zhang wrote in the harshly worded piece in the Communist Party's mouthpiece.

Read more: http://www.news.com.au/business/story/0,23636,24915240-14334,00.html?from=public_rss

[onehandle]

1. Send out Bush to apologize.

Please don't hurt us, future masters.

[lostnotforgotten]

2. All Made Possible By Phil Graham And The Republicans

eom

[Deja Q]

3. Oh, so they're not happy about the offshoring of the manufacturing industry?

Okay, in 100% seriousness it's nowhere near as simple as that, but come on: The loss of manufacturing in the US has indeed hurt our country, and it is amusing for China to be making these blames.

Besides, I thought they were no longer Communist?

[Alhena]

4. China buying our debt has acted as facilitator to the bubble creation ...

if China had just sold us their cheap goods and then invested the proceeds in their domestic economy, or bought government bonds from some other country than the US, then there's no way the housing bubble could have occurred. A recession would have occurred in the US long ago, inflation would have taken place in China and the trade imbalance would have corrected itself.

China's central bank quite consciously allowed the bubble to inflate by pegging the yuan to the dollar and by continuing to buy our treasury bonds. Without that decision by China, there would have been no money to inflate the bubble in the US.

[redqueen]

9. But if we'd had a recession then, we'd have stopped buying

their cheap crap... hence the facilitation.

[Alhena]

11. I agree, but China is acting like they had no role in the thing ...

it's like sending a bunch of heroin to your neighbor and then professing shock when he turns into a drug addict.

[redqueen]

15. Precisely. It's not a situation where either the US or China is to blame...

there's plenty of blame to go around.

[4_TN_TITANS]

27. China sold the capitalists the rope

that we used to hang ourselves.

I believe that was a quote from Stalin or Lenin, only China figured out the way to actually do it and to their advantage.

[wickerwoman]

13. But China stopped pegging the yuan to the dollar four years ago

and moved to a basket of currencies, primarily the Euro. The exchange rate has gone down nearly 25% since then (which was a nice raise for me back when I got paid in yuan).

The last I heard of this story the US government was blaming the recession on everyday Chinese consumers saving too much money instead of spending it on crap and running up massive credit card debt like we do. That always seemed like a pretty lousy argument. I think a lot of American companies were counting on turning the Chinese into the same kind of mindless, debt-fueled consumers that many Americans are and ran up against some serious cultural resistance.

[Alhena]

16. Formally perhaps, but as long as they keep buying our treasury bonds

in huge amounts then they are propping up the dollar vis a vis the yuan.

The Chinese central bank also makes a habit of having Chinese companies send the dollars they earn from exports to the central bank, which then PRINTS yuan and gives it to the businesses. The Chinese central bank then uses the dollars they bought with printed yuan to buy our treasury bonds and agency debt. This has the effect of weakening the yuan vis a vis the dollar.

So they may not have a formal peg, but China's policies have the effect of weakening the yuan against the dollar.

[mrreowwr_kittty]

5. He's right, in a sense.

We can't really blame China for the predicament we're in because it was OUR leaders who sold our country to them so that the wealthy elite could profit.

[dipsydoodle]

6. Anyone marginally sharper than a marble

could've worked that out.

[madrchsod]

7. someone had to buy china`s crap...

they did`t mind until they realized they been had.

i`m not going to shed a tear over their "plight"

[OnceUponTimeOnTheNet]

8. What's the chance that China gets riots like Greece?

[CountAllVotes]

10. the dead pets, babies, poison have nothing to do w/it China

Look the other way and blame the consumer that no longer cares to spend money on the toxic crap that China makes Mr. Zhang.

I guess you forgot about that huh?

Keep your poison to yourself - the world doesn't want it!

:dem: :kick:

[Joanne98]

12. I have to agree.

[superconnected]

14. I'll agree with that - look who our leaders are and our wide open for criminals financial laws.

[no_hypocrisy]

17. No shit.

[Phred42]

18. caveat emptor - baby

[tclambert]

19. But our fearless leader never makes mistakes!

Dick Cheney said so. And he wouldn't lie like a filthy, filthy, filthy rug.

The Chinese are just jealous they couldn't destroy America's power as much as Bush did. Not with their entire nuclear arsenal.

[OwnedByFerrets]

20. FIle this under NO SHIT SHERLOCK....but I am glad they are

pronouncing this.

[valerief]

21. Maybe they'll put Bush on trial, and if they find him guilty, he'll get death.

Those Chinese don't screw around. You don't mess with their money.

[DallasNE]

22. How Interesting

That it takes a Communist to explain with clarity the dynamics of how Capitalism works. Or in this case, the consequences of allowing Capitalism to function without restraint. Now the whole world has to live with those consequences and it is very ugly.

[jwirr]

23. China - USA? What happened to the multinational corporations?

Don't they have any blame in this?

[TheFarseer]

24. China sold us cheap goods and loaned us the money

This is good strategy as long as we can pay them back in some form. WE are the stupid ones for letting them do it. We have only ourselves to blame. Don't blame someone else for being smart.

[acmavm]

25. Mistakes? Gee, I don't know. The thieves made money betting on bad

paper and they made more money with the bailout. They were just going for the gusto, free market and all.

[Pale Blue Dot]

26. It's never a good sign when nations start throwing accusations at each other.

It's certainly not a sign that China thinks this is going to get better any time in the near future, and it may be a sign that they're ready to stop lending to us.