Special Report: Global Financial Crisis

U.S. Treasury Secretary Henry Paulson speaks during a press conference at the Treasury Department in Washington Nov. 12, 2008. Paulson gave an update of the Troubled Asset Relief Program (TARP) Wednesday, saying the second half of the 700 billion U.S. dollar financial rescue program will not be used to purchase troubled assets as originally planned.  (Xinhua/Zhang Yan) Photo Gallery>>>

    WASHINGTON, Feb. 3 (Xinhua) -- Former U.S. Treasury Secretary Henry Paulson said Tuesday that he was wrongly portrayed in a Financial Times article as claiming China is to blame for the global economic crisis.

    "In the years leading up to the crisis, super-abundant savings from fast-growing emerging nations such as China and oil exporters-- at a time of low inflation and booming trade and capital flows -- put downward pressure on yields and risk spread everywhere," the British newspaper quoted Paulson as saying Monday.

    That, the newspaper quoted Paulsen, pushed down interest rates and drove investors to riskier assets, sowing the seeds of a global credit bubble that extended beyond the U.S. subprime or high-risk home loan market and eventually burst.

    "The Financial Times reporting was wrong," Paulson said in a statement sent to China's Xinhua News Agency Tuesday.

    "In assessing the financial market crisis, I have repeatedly and consistently targeted the vast majority of my criticism at problems in the United States, particularly our flawed and outdated regulatory structure," Paulson said.

    "Whenever I have commented on global imbalances, it has been against that backdrop and I have gone out of my way to say that no single country is to blame for the imbalances," he added.

    Paulson also gave an example -- a speech he made last Nov. 12 -- in which he said: "Over a period of years, persistent and growing global imbalances fueled a dramatic increase in capital flows, low interest rates, excessive risk taking and a global search for return."

    "Those excesses cannot be attributed to any single nation," he said. "There is no doubt that low U.S. savings are a significant factor, but the lack of consumption and accumulation of reserves in Asia and oil-exporting countries and structural issues in Europe have also fed the imbalances."

    "If we only address particular regulatory issues -- as critical as they are -- without addressing the global imbalances that fueled recent excesses, we will have missed an opportunity to dramatically improve the foundation for global markets and economic vitality going forward," Paulson said in the speech.

    In his statement to Xinhua, Paulson said that "the U.S.-China relationship continues to be vital to both our nations and to the global economy."

    "To maintain a strong and mutually beneficial relationship, we must rely on direct communication rather than media reports," he said.

Expert: China not to blame for crisis

BEIJING, Jan. 16 --The global credit bubble started with U.S. policies rather than the savings of China and oil exporters, a leading World Bank economist said.

"The global credit bubble started with U.S. policies," David Dollar, World Bank's country director for China, said in an exclusive interview with China Daily Thursday. Full text

U.S. blame game cannot change facts of financial crisis

BEIJING, Jan. 7 (Xinhua) -- Plagued by the financial crisis that originated in the United States, the world economy has been thrown into chaos. While countries are battling the crisis, outgoing U.S. Treasury Secretary Henry Paulson has been playing a blame game.

Paulson said a failure to address the rise of emerging markets and resulting imbalances was partly to blame for the global financial crisis. The current U.S. Federal Reserve Chairman Ben Bernanke is also part of the game. He sees savings from countries like China as a cause of the property bubble in the United States. Full story 

Wen blames debt-fueled consumption

Chinese Premier Wen Jiabao speaks at the World Economic Forum annual meeting, in Davos, Switzerland, on Jan. 28, 2009.(Xinhua/Yao Dawei) Photo Gallery>>>

DAVOS, Switzerland, Jan. 28 (Xinhua) -- The following is the full text of Chinese Premier Wen Jiabao's speech here on Wednesday at the World Economic Forum Annual Meeting 2009. Full story