Chinese regulators are becoming increasingly skeptical of financial advice from the U.S. to sacrifice the countrys stability for the greater good of stabilizing the global economy, Reuters reports.
For China, the challenge is to save less and consume more," said U.S. Treasury Secretary Henry Paulson.
By leaning toward a market-driven economy and loosening supervision, U.S. officials say China can increase consumption and help stabilize the global economy. Chinese officials worry that such a move could put the country at a greater risk for problems like the subprime mortgage crisis in the U.S.
The United States has, for a long time, been advocating free-market capitalism, believing the market can allocate resources effectively without government interference. But this is not really the case," said Liu Mingkang, chairman of the China Banking Regulatory Commission. "Sometimes the market does not work and if you wait until then to correct it, the costs are usually tremendous."
Liu said his agency would make sure Chinese banks dont lower standards for housing loans and increase scrutiny for borrowers who have more than one home, as well as prevent banks from lending to companies with a high debt ratio.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
