Two years back from now, when I was applying for this program, the U.S. capital market was on its fast track of flourishing with financial innovations competing to make their debut, seducing global funds into buying the U.S. financial products and providing profuse liquidity for this market, as a result the DJI (DOW JONES INDUSTRIAL AVERAGE INDEX) was pushed higher and higher. By then I was wondering how, the American financial market could win that magic power, and what experience China could learn from it.
Now that I am on the American soil, all the financial news I hear every day is about the subprime mortgage crisis, the government's taking over of the Freddie Mac and Fannie Mae, and the avalanche of the Lehman Brothers' and Merrill Lynch's shares. The U.S. market, as well as the global economy, was stricken by a series of bad news, just like the hurricanes that trod on the America one after another.
Arthur J. Rolnick, Senior Vice President and Director of Research Federal Reserve Bank of Minneapolis said, the phenomena that are taking place in the world's biggest economy is nothing but normal economic cycle, so people don't have to make all the fuss. In the long run the American economy will keep its head up on a beautiful upward curve. As in his opinion, the economy will pick itself up as soon as early next year, well back to its booming gear.
However, this curve of history makes no sense at all to people - unemployment, investment loss, and resale of their houses are the very reality that does make sense to them.
Therefore, when I was listening to those fantastic future pictures described by the two US presidential candidates, I was more interested of where does all the cash needed to realize the dreams, and what are the concrete measures to spur the economic growth. It's just not as simple as dealing with a 17-year-old pregnant daughter.
Henry Paulson said in a July remark that there were limited tools we could use in resolving the problems in the American financial market. Sounds familiar? It's the same comment our Chinese central bank officials often make.
Next week, we will meet with the IMF officials in Washington. I do want to know whether or not they are facing the same situation that trapped many countries in the global financial crisis a decade ago. And a week after that, we will visit the headquarters of the Lehman Brothers - hope it's still there on the Wall Street, safe and sound.
But the question I would pose now, when I'm finally here, has been totally changed from what experience, to what lessons, can China learn from the America.
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