Transcript
CARLOS PASCUAL: There was a period of time not that long ago -- perhaps a year ago -- that people began talking about the concept of decoupling, that we could have an economic recession or slow-down in the United States and that countries like China could become decoupled from that. In part, that theory has been put aside, and we've already seen what the impacts of the American economic recession have been on Europe, on China, on other parts of the world. There are some who have started to argue that in fact there can be a different kind of decoupling, that you can have in fact the rise of China and the recovery of China without necessarily the corresponding rise in other parts of the world, and one has to begin to wonder well, if that's the case, on what basis does China have that economic growth?
And here we come back to questions that we have to consider. One of them is inevitably China's own economic stimulus package, the $580 billion-plus package that has been put on the table and has been used to invest domestically. Inevitably, that has had some impact. There are questions of how much of that is new money. There are questions about what the long-term impact is going to be, because, just like the United States, if you want to spend that money quickly, you end up spending it inevitably on the existing infrastructure and plans that you have. And so how much of those resources in fact actually prepare China to compete in that future economic system?
There are questions that people have on whether China is going to take this situation and continue on its global perspective. Some would argue that China fully recognizes the fact that it grew economically because of its engagement in the global economy, and so will it in fact continue with the same kind of aggressive approach toward its engagement in globalization?
There are some who will argue that China inevitably will take a more conservative stance because of its domestic concerns, that it doesn't want to have the kind of internal instability that might be linked with linkages to a global economy and so are we going to see changes in China's internal politics and economics?
And then of course there are questions that arise regarding the neighbors or in fact those that are part of China yet a neighbor in a sense -- like Hong Kong, which is already beginning to ask itself the question can it survive as a vehicle for exports from the Chinese economy, and increasingly you see within Hong Kong firms that are trying to establish themselves and their future on the basis of redirecting investment into China for China's own domestic consumption and economic growth.
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