"CAN you save us? We're here to be rescued." That, in a nutshell, was the collective cry of a swarm of US and European bankers, auditors, consultants and industrialists thronging the cavernous halls of the colossal convention centre in Tianjin last weekend.
While the western delegates at the World Economic Forum's summer conference in the coastal port city that serves as the maritime entry to Beijing were confused, bemused and hyper-anxious about the financial crisis and its impact on the global economy, the Chinese were magisterially assured. Certain that they are the new masters of the universe - now or very soon.
The Chinese Premier, Wen Jiabao, made plain that his country's economy is not immune from the crisis. But, unlike the US and Europe, which are heading for recession or in it, China had put in place the monetary and regulatory measures to ensure continued growth.
China's growth in gross domestic product will not be the 11.9 per cent of last year but still, at 8 or 9 per cent in 2008 and the same in 2009, is still a boost to global trade. Inflation, which peaked at more than 8 per cent in February, has been brought down to 4.9 per cent. And if Chinese exports - enjoying a 170 billion ($300 billion) surplus with the EU alone last year - are experiencing slower growth and even heading for a decline, Mr Wen promised to continue the shift towards domestic consumption and to open the economy further.
But will this happen? Will Mr Wen deliver on his oft-repeated promise to reform China's capital markets? As Stephen Roach, the Asia chairman of Morgan Stanley, told delegates, Chinese consumer spending is, at about 35 per cent of GDP, less than half that of the US where the "binge" of the past 14 years has come to an end, leaving the US consumer "toast, done, finished". The US, he said gloomily, "will have its version of Japan's lost decade".
There were two striking aspects to the Tianjin discussions among policymakers. First, the Chinese authorities were blunt that it was up to the US to sort out the mess it had created, putting at risk, as Mr Wen told CNN, "the safety and security of Chinese capital". Chinese investments in US and European financial assets have gone sour in the toxic meltdown, so the country's leaders are demanding global co-operation to fix the regulatory framework, with Liu Mingkang, the top banking supervisor, exclaiming with unusual ferocity that US lending practices had been ridiculous and demanding a large say in any reforms.
Second, the Europeans were vastly outnumbered by the Americans. David Hale, a Chicago-based consultant and economist, told a group of us: "The Chinese and Americans are drawn to each other; they have a lot in common - entrepreneurial, can-do."
One of the most prominent European delegates there was Tom Enders, the chief executive of Airbus. Over the weekend he and Mr Wen opened the plane-maker's first non-European final assembly line - in a $US600 million ($770 million) plant on a cabbage field that took less than 15 months to build and is now the most modern in the world.
Mr Enders denies that Airbus is putting all its eggs in the Chinese basket but he and his executive team are investing heavily in the prospect of sustained growth - not just in the economy but in air traffic as consumers grow richer. They expect Chinese airlines to order more than 3000 new aircraft in the next 20 years and Airbus to capture more than half of those. Although the new plant involves little technology transfer, Airbus executives do not rule out co-operating more fully with the Chinese in years to come.
One senior European diplomat gave a gloomy forecast of how China's pace of development would affect the European market. "The Chinese are investing heavily in R&D and moving rapidly up the technological value-chain, but we Europeans are in danger of falling behind and failing to invest in research. We could swiftly drop out of the premier league as far as they are concerned."
It was a shuddering thought at the start of a week in which the US financial crisis swept the globe engulfing several European banks. If the diplomat's fears are proven right, there could be worse to come in other sectors, too.
Guardian News & Media
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