``An open, competitive, and liberalized financial market can effectively allocate scarce resources in a manner that promotes stability and prosperity far better than governmental intervention,'' Paulson said.That was then, this is now, and the grasshopper is not impressed with the master according to Bloomberg.
``The U.S. financial system was regarded as a model, and we tried our best to copy whatever we could,'' said Yu Yongding, a former adviser to China's central bank. ``Suddenly we find our teacher is not that excellent, so the next time when we're designing our financial system we will use our own mind more.''They've noticed the hypocrisy too:
The recent moves by Paulson, the former chief executive officer of Goldman Sachs Group Inc., contradict what the U.S. told Asian governments over the past decade. Thailand, South Korea and Indonesia were urged to let unviable banks fail during the 1997-98 Asian financial crisis.China learned something from our failures and plans to make some changes:
``It's the end of an era,'' said Shanghai-based Andy Xie, a independent analyst who was formerly Morgan Stanley's chief Asia economist. ``In 1989, when the Berlin Wall fell, socialism was discredited and the whole world turned right. Now financial capital has been discredited and the whole world, including the U.S., is turning left.''
That road may be different from the one Paulson proposed 18 months ago, according to Arthur Kroeber at economic research company Dragonomics Advisory Services Ltd. in Beijing.The question is...will we learn from this, or will it be business as usual?
``China's made it clear it won't listen to these snake-oil salesmen who come from Wall Street, even if they're wearing suits issued by the Treasury Department,'' he said. ``It's strengthened the hands of all the people who are very skeptical about financial liberalization in China.''