FROM EIR DAILY ALERT

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Liu He Is Representing China at the Week-Long Economic Talks in Washington

May 17, 2018 (EIRNS)—The head of the delegation is Dr. Liu He, now a Politburo and State Council member, Vice-Premier, and the top government economist in China. Dr. Liu was the author of the 2014 “Comparative Study of Two Global Crises.” That paper summarized the findings of a research group Dr. Liu had led, which compared the Great Depression of 1929 to the international financial crisis of 2008. It found that Franklin Delano Roosevelt had attacked the root causes of the Great Depression, whereas the measures taken in and after the 2008 events were ineffective because they had been dictated by the speculative financiers themselves. Instead of being written off, bad debts were kept on the books and subsidized, and as a result there was no real recovery.

In the party accompanying Dr. Liu from in Washington is Liao Min, China’s leading expert on shadow banking. Liao was a well-known folk singer during his university days in the late 1980s, and is now deputy director of the Office of the Central Commission for Financial and Economic Affairs, the internal party economic policymaking body. In May 2008, when he was director-general and acting head of the general office of the China Banking Regulatory Commission (CBRC), Liao criticized Western regulators to the City of London’s Financial Times, saying “I feel the Western consensus on the relation between the market and the government should be reviewed.” He explained how Chinese regulators had prevented the emergence of exotic financial instruments there.

The Financial Times concluded its brief article: “The CBRC was established five years ago and since then the country’s previously moribund financial sector has been transformed. The largest state-owned banks have overhauled their internal structures and sold shares to strategic investors such as Bank of America, Royal Bank of Scotland, and Goldman Sachs before listing on the Hong Kong and Shanghai stock markets.”