Chinese Premier Blames Recession on U.S. Actions

The Scotsman

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Beijing Rethinks Some of Its American Investments

Chinese Premier Wen Jiabao squarely blamed the U.S.-led financial system for the world's deepening economic slump, in the most public indication yet of discord between the U.S. government and its largest creditor.

Leaders in China, the world's third-largest economy, have been surprised and upset over how much the problems of the U.S. financial sector have hurt China's holdings. In response, Beijing is re-examining its U.S. investments, say people familiar with the government's thinking.

Mr. Wen, the first Chinese premier to visit the annual global gathering of economic and political leaders in Davos, Switzerland, delivered a strongly worded indictment of the causes of the crisis, clearly aimed largely at the United States though he didn't name it. Mr. Wen blamed an "excessive expansion of financial institutions in blind pursuit of profit," a failure of government supervision of the financial sector, and an "unsustainable model of development, characterized by prolonged low savings and high consumption."

Chinese leaders have felt burned by a series of bad experiences with U.S. investments they had believed were safe, say people familiar with their thinking, including holdings in Morgan Stanley, the collapsed Reserve Primary Fund and mortgage giants Fannie Mae and Freddie Mac. As a result, the people say, government leaders decided not to make new investments in a number of U.S. companies that sought China's capital. China's pullback from Fannie and Freddie debt helped push up rates on U.S. mortgages last year just as Washington was seeking to revive the U.S. housing market.

To be sure, China's economy now is so closely intertwined with the U.S.'s that major, abrupt changes are unlikely. The U.S.-China economic relationship has become arguably the world's most important. China has been recycling its vast export earnings by financing the U.S. deficit through buying Treasurys, helping to keep U.S. interest rates low and give American consumers more spending power to buy Chinese exports.

China now has roughly $2 trillion in foreign exchange reserves, and has continued to buy U.S. government debt -- surpassing Japan in September as the biggest foreign holder of Treasurys, by one official U.S. measure. China must continue to recycle its trade surplus if it doesn't want its currency to appreciate too quickly.

http://online.wsj.com/article/SB123318934318826787.html

The chinese blaming the US......how orginal......mind you everyone else does ;)
 
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I can think of nothing egregiously wrong with giving beer to a 12 year old. Indeed, the European experience has indicated that an introduction to moderate alcohol consumption at an early age establishes a framework for moderate alcohol consumption and health benefits derived from that consumption throughout life.

Regardless, I once heard that the Chinese rulers found their own agricultural statistics so untrustworthy that they relied on information obtained from CIA spy satellites.
 
I belive there's more to all of this than meets the eye. Major stratigies are unfolding before us. Our leaders are so intangeled in the curruption that if true transparancy were to exist total caos would ensue. I belive confidence in our government will continue to decay. What will we do?
 
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