Hank’s Economic Mercy Mission
January 28th, 2007
Henry Paulson, former CEO of investment banking giant Goldman Sachs and now US Treasury Secretary is the man that the US financial markets are pinning their hopes on to stimulate the market for US exports to China. The US is in a massive hole to China in its balance of payments. Consider…
- Most junk found in street markets is ’Made in China’.
- Most middle-order and high-end, manufactured items that are commonly known as ‘US Brands’ are Made in China
- In the US market alone, Chinese investors have around $1trillion in US Currency
The US is not happy with this and want to redress this imbalance. They believe in ‘Hank’, as he is known, that Ben Bernanke, Chairman of the US Federal Reserve has deployed a dedicated to team to facilitate this ‘mission’. If Hank can’t do it, no-one can.
Henry Paulson is known for his ties in China. His relationship with the Government and Corporate Enterprise, is seen as the fundamental reason Goldman Sachs has strong credibility in China. But there is more to it than that. John Thornton, his second in command while at GS, was the first western business leader to take up a full-time teaching role in China. Tsinghua University is China’s leading business university and is producing 1200 MBA’s per year. These link led GS to be Lead Manager in the ICBC IPO and numerous other domestic listings.
Goldman Sachs, is one of the only US companies freely doing deals in China. Obviously, George Bush noticed the respect he received with his Chinese dealings, all this without the rigmarole of actually having to go to war.
The US want him to make the US position in China stronger. The first step is to encourage China to float their currency, the Chinese Yuan, to enable the massive trade deficit to close. China’s approach is ”We will… eventually!”. Without Hank on the case, it would have been a definite ‘No’.
Hank Paulson is a faciliator of business. He realised long ago you can’t just ‘take’. There has to be a balance. In order to receive you have to give. Funnily enough, as the US consumer ‘gave’ for Christmas, the Chinese manufacturers ‘received’.
January 28th, 2007 at 11:12 am
I found it interesting how Ben Bernanke is following Henry Paulson’s lead in dealing with China.
China looks like it is trying to control every aspect of their economy… the Yuan is only one part.
January 28th, 2007 at 12:02 pm
I read a report last week about how China is too expensive to make exportable junk anymore. Vietnam or Cambodia are the new places for that.
January 29th, 2007 at 6:55 pm
Vietnam would have to be the place. They are looking to it as the next China-like manufacturer of the junk we so love to consume