All this week we are taking our webcams around the world, to exotic and faraway places. On Monday we begin our trip with Beijing.
China; it’s the epicenter of global growth, expanding at a 10% clip last quarter. The Chinese economy is being propelled, in large part, by two major influences, cheap exports to the West and an infrastructure build out ahead of the Beijing Olympics next year.
Despite a number of powerful market sell-offs this year and some recent safety recalls, China's stock market remains up 83% in 2007.
But will the latest crack in the global market for borrowing, be the undoing of the source of the global bull market? We turn on the webcams to find out.
Michael Pettis, Professor of Finance at Peking University joins the conversation.
Where are you?
I’m in Beijing, in a district where all the universities are located.
Are there any concerns in China about America’s credit crunch?
There’s concern, and there have been meetings says Pettis. But so far there doesn’t look like there’s a transmission from America into China; although on Monday China’s market was up on strength in the US market.
Where would the credit problems in the US hit China?
Not in the financial markets, says Pettis. Because China has capital controls. It’s not so easy for money to move in and out of the country. Problems would spread to China if the credit crunch led to a drastic reduction in consumption. That would hit China’s exports.
Next, James Weymuss joins the conversation. He’s an MIT student currently in China.
Had you heard about the product recalls and scares?
I had no idea about the Chinese toothpaste incident until I left China, says Weymuss. I had no idea how serious it was until I went back to the United States.
Then what’s your source of information about the world?
I check the internet everyday, says Weymuss. But I wasn’t looking for the story specifically.
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Trader disclosure: On Aug 20 2007, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money; Macke Owns (DIS), (JWN); Najarian Owns (ATML); Najarian Is Short (GS) Najarian Owns S&P Puts; Stacey Briere Gilbert Is Chief Options Strategist For Susquehanna Financial Group, LLLP; Gilbert Is Head Of Market Intelligence Research For Susquehanna Financial Group, LLLP; Gilbert Does Not Cover Individual Securities But Does Recommend Trading Strategies
Susquehanna Financial Group Is A Market Maker In (ATML), (BIDU), (CROX), (DNDN) (FSLR), (FXI) (GYMB), (GRMN), (GOOG), (INTC), (JKHY), (LEND), (MSFT), (NDAQ), (PSUN), (PALM), (Rost, (RIMM), (SPLS), (SSCC), (TRMB), (YHOO), (ZUMZ), (QQQQ); Susquehanna Financial Group And/Or Its Affiliates Together Own More Than 1% Of The Shares Of (BSC), (BIDU),(CROX), (CME), (DNDN), (LEND), (NMX),(PALM), (RIMM), (MA), (FCX); Susquehanna Financial Group Has Provided Advisory Services To (AEO); Susquehanna Financial Group Has Provided Advisory Services To (GYMB)