It would be hard to overestimate this as a first step for China. If China can transform its big banks, this will have enormous implications for China's long-term economic growth.
There are many unanswered questions surrounding this case. China certainly hasn't helped the situation by giving so little information about what happened and denying he's a state employee.
They are the biggest trading nation, they are one of the biggest receivers of capital flows. If you are going to be a global policy- making organization and leave a huge player outside the framework, you aren't going to have much credibility.
The Bush administration is under enormous pressure from Congress to do something about the uneven bilateral trade deficit. The underlying force is not the value of their currency but the low savings rate in the United States. If there's no change in the U.S. savings rate, the trade deficit won't go away.
China is looking to foreign companies, including Microsoft, as sources of technology.
The sad fact is we don't necessarily have much leverage to get China to change their exchange rate or their trade policies.
We don't have very much leverage.
The world oil market is very competitive and it is not clear what advantages cooperation could bring, particularly to the Chinese side since they are a much larger participant in the market.
To really make this work, you have to close down some of the inefficient firms that are not going to be able to repay their debt to banks. To date, the state or the party has not had the will to shut down many of these firms.
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