Financial crisis concern prevails at Summer Davos meeting in Tianjin
26/9/2008 17:47
The current financial turmoil in the United States is the main concern of
the world's chief executive officers and investors gathering today for sessions
before the annual meeting of the New Champions 2008, organized by the World
Economic Forum.
Three speakers at the session, all heads of the world's major
accounting firms, agreed that they did not foresee a global recession following
the current financial crisis.
"We are currently at a very difficult spot,"
Samuel Dipiazza, chief executive officer of PricewaterhouseCoopers, told
reporters, "but global economic recession is not likely, even though there is a
world economy slowdown, because some emerging markets will keep driving the
growth."
The discussion took place amid a global credit crunch which
originated in the US starting with the collapse of Lehman Brothers Holdings
Inc., Merrill Lynch & Co and Bear Stearns, and the crisis is still spreading
to plague other large financial institutions. The world's stock markets recently
tumbled as a result.
"Individual industries in individual markets are going
through a contraction, but as for the economy overall, it's not happening, "
said Deloitte Touche Tohmatsu Chief Executive Officer James Quigley. Both
Dipiazza and Ernst & Young LLP Chief Executive Officer James Turley said
they are optimistic about future actions to be taken by the US
government.
The Bush administration proposed a 700-billion-US-dollar
government rescue plan to buy distressed assets from troubled lenders, but a
top-level White House meeting failed to reach consensus on the plan
yesterday.
Turley also believed the world's central banks would help ensure
the credit would be available.
Dipiazza said it would have to wait for two or
three weeks before reaching a conclusion and see how the US government would
deal with the crisis.
Quigley echoed Dipiazza's comments and said, "The
global economic recession will not occur, especially in emerging markets in
Asia-Pacific areas, such as China, where it is keeping building up
infrastructure, and developing consumer-based economy that is not so much
relying on export." While financial upheavals were in the past usually reaction
to changes in the real economy, this time there are rising concerns over the
impact of the financial crisis over the real economy, or the other way
around.
"The situation is more challenging than we thought a few months ago,"
the PWC CEO acknowledged.
Fred Zuliu Hu, chairman of Greater China, Goldman
Sachs (Asia), said at a different session today the global credit turmoil would
not have a major impact on China's financial sector due to limited exposure of
Chinese lenders to the risks.
The New Champions 2008, the second such annual
meeting organized by the World Economic Forum and also dubbed as "Summer Davos",
is to be held in Tianjin from Sept. 27 through 28. Chinese Premier Wen Jiabao is
expected to address the meeting tomorrow.
Xinhua
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