Thursday, October 9, 2008

Expert: US economy still hopeful

The current financial crisis may threaten the dominance of the US in the world. However, the world cooperation and the strong hi-tech competence of the US will help the US economy recover, asserted a senior Chinese expert in an interview with People's Daily Online on Oct. 9.

Chen Baosen, a research fellow from the Chinese Academy of Social Sciences, thinks that the euro will get stronger and the RMB will become more important while the US dollar will be weakened as the result of the financial crisis. Despite of that, he stressed, the leading role of the dollar will not be challenged in the near future.

Chen said it takes time for the RMB to be a fully convertible international currency. The competitiveness matters the most, which comes from a strong financial system and success of products on the world market. China still stands at the low end of the international supply chain.

The hi-tech remains the most important comparative advantage of the US. Chen believes that as long as it retains that advantage, the US economy will recover in one or two years after it overhauls its financial system.

The way that the crisis is dealt with also makes difference compared with that in 1929. Chen noted that unlike the Hoover administration's non-intervention policy the Bush government has taken positive actions this time. In addition to that, global cooperation on fighting against the crisis also helps.
Chen insisted that China should learn lessons from the US financial crisis to develop its own financial system in a more solid and healthy way on one hand and have more say on the overhaul of the US financial system on the other.

"Like many other countries, China is also affected鈥�We are all stakeholders on this issue," said Chen, " we should have our voice heard."

By People's Daily Online

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