Hong Kong Commercial Daily: China and the United States to rescue the market is quite different

"Hong Kong Commercial Daily" published on November 20 Jun eight weeks to write the article "China and the United States to rescue the market is quite different," pointed out that the main part of the global economy - the United States, the euro area, Japan has been or is being further Into recession, which is known to all that. These governments have taken measures to contain up to the deepening financial crisis and unable to stimulate economic growth. China's financial system is affected by the global financial crisis without a crisis, therefore, directly against the consumption and investment under the "heavy dose of medicine." This shows that China and the United States and other developed countries in different stages of the economic cycle. The article summarized as follows: November 12, 2008, U.S. Treasury Secretary Paulson announced at a press conference, after several weeks of evaluation, the U.S. government to change plans, 700,000,000,000 U.S. dollars fund to rescue the market will not buy real estate and mortgage banking-related Non-performing assets, but more broadly to support the financial markets, to reputable borrowers to provide car loans, student loans and other loans; but 250,000,000,000 U.S. dollars will be allocated to problematic banks to buy shares from banks by injecting capital. He said the city will not be used to save funds to finance the U.S. auto industry. He said that the Ministry of Finance's Troubled Asset Relief Program (TARP) to non-bank financial institutions injected. For financial markets, the U.S. government to adjust 700,000,000,000 U.S. dollars fund to rescue the market by surprise, but found little analysis, which revealed that the financial crisis in the United States on the latest official assessment, that is very profound. Government to spend money to buy the U.S. banking and real estate mortgage held by a related non-performing assets, it can be said that Paulson-led rescue package of mind to major banks in the United States to ease the burden and maintain the U.S. financial system. Later, the U.S. government decided to spend part of the funds to buy shares in a number of large banks, is subject to Britain and other European governments to promote similar projects, nature, the United States in the final analysis, depend on the current state of the banking system. Now, to help shift the focus of the wider support of the financial markets, directly to reputable borrowers to provide consumer credit, said the U.S. government began to directly stimulate the consumption of the United States, the United States seems to be conducive to financial stability and economic recovery. However, an in-depth analysis of the situation is preposterous and not the case. First, the U.S. government does not hand the United States to acquire the mortgage banking industry and real estate-related non-performing assets, not as in-depth investigation found that this kind of a small amount of assets, but its scale is far from 700,000,000,000 U.S. dollars to rescue the market After discounting the effect of the fund has acquired a number of bank shares in the amount of more than we can cope with. Secondly, the U.S. banking industry as a result of the U.S. government has not saved anything, the situation has improved to reputable credit customers. If the United States Government to acquire their non-performing assets, is only as good as put to the bank and help the economy as a whole. Paulson in the Nov. 12 press conference that the U.S. authorities "to fulfill their expectations of all banks in the economy as credit and commercial organizations, consumers and other borrowers with a good reputation as the interface between the basic functions." Which was read For the U.S. government of the United States to defend itself in the banking sector's attitude towards criticism. Third, Paulson reiterated that the U.S. government to non-bank financial institutions injected. The fact is, in Paulson made the remarks two days before the Federal Reserve and U.S. Treasury Department announced that U.S. insurance giant to American International Group (AIG) to provide new financial assistance, including the injection of 40,000,000,000 U.S. dollars to buy AIG Part of the stake, so that the U.S. government rescue of AIG's total amount of 1,500 million. The relief measures belong to 700,000,000,000 U.S. dollars part of the rescue package. It is because the United States soon to identify investors in the United States Government to adjust 700,000,000,000 U.S. dollars fund to save the city uses the information contained in the negative, on November 12, the Dow Jones Industrial Average, Standard & Poor's index and the Nasdaq both dropped. By comparison, the Chinese government on November 9 release of a large program to stimulate the economy and on November 12 announced by the 4 specific measures to show that China's economic and financial situation really can not compare with the United States. On the terms of the amount over the next two years, the Chinese government will invest 4,000,000,000,000 yuan, equivalent to 586,000,000,000 U.S. dollars, far below the United States 700,000,000,000 U.S. dollars to rescue the market coupled with the amount of 150,000,000,000 U.S. dollars of tax rebates and increasing the amount of federal deposit insurance. However, the global financial community have a different evaluation. This is because the U.S. rescue package designed to curb the country's financial system and deepen the crisis, China's program is designed to stimulate the economy in order to ensure a smooth and fairly rapid growth. China's economy has suffered in the global financial crisis, growth has also slowed, as well as the November 6, 2008 of the International Monetary Fund (IMF) in its "World Economic Outlook" (Amendment), to less than a month ago on China's 2009 The gross domestic product will grow 9.3 percent forecast down to 8.5 percent. However, the Chinese government not only in time to adjust macro-economic objectives and policies, to take a proactive fiscal policy and moderate monetary policy in order to ensure stable and rapid economic growth, and the use of huge amounts of money directly to promote domestic demand - consumption and investment, although the amount of As the U.S. government fund to rescue the market, able to generate economic growth in the United States can not hold a candle. The main part of the global economy - the United States, the euro zone and Japan have been or are in a recession, which is known to all that. These governments have taken measures to contain up to the deepening financial crisis and unable to stimulate economic growth. China's financial system is affected by the global financial crisis without a crisis, therefore, directly against the consumption and investment under the "heavy dose of medicine." This shows that China and the United States and other developed countries in different stages of the economic cycle.