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Impact beyond crisis

(China Daily)
Updated: 2008-10-20 07:38

When the United States stands in a waist-deep flood, small countries are 10 feet under the water.

The figure of speech tells us how big a giant the US is as the financial crisis ripples through the world.

The economic storm, or the financial 9/11 as some people call, can hardly change the US GDP and military power.

However, the uncertainty that characterizes the current global financial crisis extends beyond the markets and its drama beyond the erratic moves of securities prices. When the dust settles after the financial crisis, power relations might change.

The US's soft power, if not the hard side, is under challenge.

US President George W. Bush announced on Saturday plans to host an international summit to discuss ways to fix the world financial system. French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso were with him, but Bush did not say when and where the summit would be convened. It was reported that emerging economies like China and India would be invited to the summit.

It is easy to see the US is eager for a discussion on global responses to the financial crisis and ideas to prevent such a crisis from recurring in the future. The reason is simple: it is in the water, too.

It is still too early to evaluate how devastating the crisis is to the world. The credit crisis that started in the US and swept around the globe has pummeled markets. It has left the US and its European allies searching for ways to cushion the shock from the financial crisis.

The economic storm is far from the end. The world needs to be ready for more ripples from it.

When globalization marches on, developed countries have garnered most of the benefits, and developing economies including China also have profited by the progress.

When the economy is in turmoil, the big countries and financial institutions must respond to the crisis. This will force all members of the global village to share the woes.

This is the nature of international politics today.

If the financial crisis stayed for years, the contrasts between the US and other big countries would change. The collapse of the Roman Empire and the empire of Great Britain started with monetary crises.

The ongoing financial crisis has dealt a heavy blow to the US free market system. The US government has had to bail out and take over some financial institutions, partly a kind of state management over the financial sector.

It is quite uncertain whether the US soft power can come back to its pinnacle after the "financial tsunami."

The rest of the world is not having blind faith in or even turning down the rules of US-style financial games. .

This should not necessarily mean that we devalue the US capability to lift itself out of crises. The country did so several times in the past.

Now we can leave the financial crisis to economists and government officials taking care of the economic sector. At the same time it is necessary to take note of the impacts of the economic crisis on spheres beyond the economic field.

(China Daily 10/20/2008 page4)