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China wins from credit crunch fallout
In the final part of our investigation into the collapse of Northern Rock, we look at how China may in the end be the biggest winners from the credit crisis
Towards the end of September, a group of the world's most powerful bankers met for an emergency summit on the credit crunch which, days earlier, had threatened to topple Northern Rock, Britain's fifth-biggest bank.
Northern Rock special investigation Part 1: The fiasco could have been avoided
Northern Rock special investigation Part 2: How sub-prime hit an American dream
All those present knew about the extraordinary scenes on the UK's high streets as thousands of savers queued for days to withdraw more than £10bn of their savings in the country's first run on a bank since Victorian times.
But while banking and investment executives elsewhere in the world had watched the TV pictures with a sense of horror, those who gathered in the spartan meeting room 5,700 miles from London had another word at the forefront of their minds: opportunity.
For this was not London, New York or Frankfurt, but Shanghai. And the senior officials from communist China's central bank who had convened at the People's Bank of China that day knew that the crisis in the global financial markets had served only to hasten the transfer of economic power from Europe and the US to Asia.
Northern Rock special investigation Part 3: How time ran out for Applegarth
Northern Rock special investigation Part 4: Darling and King fell out
For a decade, China has deliberately insulated itself against the boom and bust cycles of the capitalist West by building up the greatest cash fortune ever assembled: a staggering $1.3trillion (£650bn) in foreign exchange reserves.
China's colossal war chest reflects its emerging status as a superpower challenging the West not only economically but politically, with potentially profound implications for us all.
In this, the final part of our series on the worldwide credit crunch, we examine where the global economy goes from here, and probe how the balance of power is shifting from West to East.
The total secrecy in which the Chinese state conducts all of its business means that the meeting of central and commercial bankers at the People's Bank of China in Shanghai, the country's commercial capital, has never been reported. Officially, the Chinese government and the state bank will not even confirm that it happened.
But The Daily Telegraph has been exclusively briefed on the discussions, which gave a rare glimpse of the workings of the communist regime and its financial operations.
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Towards the end of September, a group of the world's most powerful bankers met for an emergency summit on the credit crunch which, days earlier, had threatened to topple Northern Rock, Britain's fifth-biggest bank.
Northern Rock special investigation Part 1: The fiasco could have been avoided
Northern Rock special investigation Part 2: How sub-prime hit an American dream
All those present knew about the extraordinary scenes on the UK's high streets as thousands of savers queued for days to withdraw more than £10bn of their savings in the country's first run on a bank since Victorian times.
But while banking and investment executives elsewhere in the world had watched the TV pictures with a sense of horror, those who gathered in the spartan meeting room 5,700 miles from London had another word at the forefront of their minds: opportunity.
For this was not London, New York or Frankfurt, but Shanghai. And the senior officials from communist China's central bank who had convened at the People's Bank of China that day knew that the crisis in the global financial markets had served only to hasten the transfer of economic power from Europe and the US to Asia.
Northern Rock special investigation Part 3: How time ran out for Applegarth
Northern Rock special investigation Part 4: Darling and King fell out
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and Wu Xiaoling, China has built huge cash reserves |
For a decade, China has deliberately insulated itself against the boom and bust cycles of the capitalist West by building up the greatest cash fortune ever assembled: a staggering $1.3trillion (£650bn) in foreign exchange reserves.
China's colossal war chest reflects its emerging status as a superpower challenging the West not only economically but politically, with potentially profound implications for us all.
In this, the final part of our series on the worldwide credit crunch, we examine where the global economy goes from here, and probe how the balance of power is shifting from West to East.
The total secrecy in which the Chinese state conducts all of its business means that the meeting of central and commercial bankers at the People's Bank of China in Shanghai, the country's commercial capital, has never been reported. Officially, the Chinese government and the state bank will not even confirm that it happened.
But The Daily Telegraph has been exclusively briefed on the discussions, which gave a rare glimpse of the workings of the communist regime and its financial operations.
.
.
.
(contd)
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