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Tess Vigeland: The global meltdown may be whacking Japan more than any other country. Today the “Land of the Rising Sun” reported its economy is in retrograde, shrinking at an annual clip of almost 13 percent.
For a comparison, the U.S. economy is contracting at a rate of nearly four percent. Japan’s latest numbers came on the same day as Secretary of State Hillary Clinton touched down in Tokyo.
For her first trip as top U.S. diplomat she’s touring Asia. Because long-term, that’s where the global balance of economic power is shifting.
From Shanghai, Marketplace’s Scott Tong reports.
Scott Tong: It may be hard to see Japan pulling the world out of this ditch, because its stuck, too. The Japanese economy’s in its worst shape since 1974. Still, Tokyo has a trillion dollars in reserve. And it’s sharing. Bill Belchere is with Macquarie Securities.
Bill Belchere: You saw the $100 billion they’re loaning to the IMF and others for their programs in parts of the world that are more distressed. They are a rich country.
And Secretary Clinton may ask Tokyo to keep cutting those checks. Her other big stop is Beijing, which has even deeper pockets. Today the secretary praised China’s $600 billion stimulus package. And fact is, China is one of the only big economies still growing, still buying stuff — like U.S. treasuries. Jin Canrong teaches at Renmin University.
Jin Canrong: At the moment Treasury bonds still are a good point. But from a long term viewpoint there are some different opinions in China.
As in some advisers want to unload dollars; and China holds a trillion of them. Beijing also frets about the “Buy America” clause in the U.S. stimulus package. And for its part, Washington has attacked China for setting its currency too low. Beijing consultant David Wolf predicts a lot of venting.
David Wolf: The Chinese have an old saying, “bu da bu cheng jiao.” You cannot really be true friends until you’ve had a chance to roll up your sleeves and throw punches at each other.
These “friends” need to revamp their relationship. Before the meltdown, the Chinese overproduced, and Americans over-consumed. So much for the good old days.
In Shanghai I’m Scott Tong for Marketplace.
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