The “Great Recession” has generated a great deal of uncertainty. Markets are in turmoil, so are many countries’ economies. People are trying to make it through this turmoil, knowing that once the dust settles the landscape could be very different from how it was before. Could the United States, and possibly Europe be in for a prolonged recession, while China and the rest of Asia recover more quickly? Could China’s foreign reserves help give it much more sway in the future, propelling it to a top spot?
These are all possibilities, of course, among many others. But should you speak to chinese economists, they might go one step further. They might say that the system of economics as we know it is over as well; that this financial turmoil has shown that the “western” way of finance has run its course and now it’s the turn of the “chinese” way.
A Buttonwood article in the Economist shows us that this is not as farfetched as many of us may think.
We at Dumbagent are not against a shifting of economic powerhouses, nor are we against a global currency (one of the ideas mentioned lately by the Chinese government, which would greatly reduce the Dollar’s importance). We do hope, however, that if the reins were to be handed over, China would realize that Economics, Finance and World Trade are too fluid and complicated to be state controlled. If they do not, then their turn at the helm will be short-lived indeed, and we may be looking past them, possibly back to the West.
