Page 5 of 5 Paulson, China and the
turmoil beneath By Henry C K
Liu
exporting economies thinking that
earning foreign exchange is a good thing.
In the US, the decline of labor and
environmental inputs has been compensated by the
increased use of variable inputs and capital. Debt
enters into the US financial system from China and
is re-exported as capital back to China. As for
oil consumption, domestic consumption is 90%
supplied from domestic sources. In
China, imported oil feeds the
export sector.
There is no way for China
to diversify its foreign currency from dollar
assets. The most China can do is slow the growth
of its dollar holdings by cutting exports.
Allotting new Chinese trade surpluses to other
non-dollar currencies is merely enlarging the
volume of dollar derivatives, an exercise in
circular circuitry.
What China needs to
do What China needs to do is to keep export
to the US at the same level as imports from the
US. This is easily done. Every three months, as
soon as exports to the US exceed import levels,
exports are stopped until imports from the US
catch up. No trade surplus, no new dollar
foreign-exchange holdings. The surplus production
is then sold in the domestic market to earn yuan
revenue which then is recirculated as higher wages
to sustain domestic purchasing power. Sovereign
credit is used to finance the time gap between
rising wages and domestic consumption and between
corporate sales and rising employment to sustain
full employment.
This will move the trade
surplus/exchange rate monkey from China's back to
the United States' back. Prices in the US will
rise from a shortage of supply and dollar interest
rates will rise to fight inflation. The Strategic
Economic Dialogue team from Washington will beg
China to stop this rational nonsense, and tell
Senators Charles Schumer and Lindsey Graham, who
are threatening legislation that would slap a
27.5% tariff on Chinese imports unless China
allows the yuan to appreciate significantly (by
20%), to go fishing.
Trade is a game of
market power. The US needs to recognize that the
scale of market power is tilting toward China's
side and that the US cannot make hegemonic demands
from a position of weakness. The solution to the
US trade dilemma lies in a reordering of US trade
policy, not on the exchange value of the Chinese
currency.
US geopolitical hegemony rests
on an economy that is continually extending its
lead in the innovation and application of new
technology. It does not rest on what another
country does nor does not do. The fact of the
matter is that regardless of crybaby complaints of
unfair Chinese trade practices, US-China trade
still benefits the US more than it does China. A
halt in US-China trade will do more damage to the
US than to China. The dollar's role as the global
monetary standard is not threatened, and the risk
to US financial stability posed by large foreign
liabilities are exaggerated. The US economy will
adjust to a decline in the dollar and a rise in
interest rates that will slow the growth of US
consumption and retard its standard of living, but
it will not fatally undermine the US economy.
The dislocations and inequities in the US
economy both at home and overseas are caused by
dollar hegemony, not by any foreign government
trade policy. There is a mismatch between the
democratic process in US politics and the
dislocation in the US economy created by US-led
globalization which no amount of China bashing can
resolve.
Net international investment
position US external liabilities are
denominated in its own currency, which remains the
key global monetary standard. The net
international investment position (NIIP), the
value of foreign assets owned by US residents
minus the value of US assets owned by
non-residents, peaked at almost 13% of GDP in
1980. Up until 1989, the US was a creditor nation.
But chronic current-account and fiscal deficits
since then have given the United States the
largest net liabilities in world history.
At the start of 2004, foreign claims on
the US of $10.5 trillion exceeded US claims of
$7.9 trillion abroad, with a negative NIIP of $2.6
trillion. In 2005, US NIIP was a negative $2.7
trillion or 21% of GDP, an increase of $333
billion over the previous year, or 21.6% of GDP.
The largest share of this debt is in the form of
foreigners holding US sovereign debt. Foreign
holdings of US government securities reached $2.4
trillion in 2005, an increase of $215 billion
compared to the previous year. The purchases of US
government securities by foreign investors
financed two-thirds of the increase in the net US
international liabilities during 2005.
US
interest payments on this massive debt held by
foreigners and to foreign holders of US assets
means that less money will be spent in the US.
Annual US interest payments on that debt rose to
$114 billion, which exceeded President George W
Bush's proposed budget for education, training,
employment, and social services in 2007 of $86
billion. Normally, these debt payments are the
Achilles' heel of vulnerability as affected by any
rise in interest rates. But what do foreign
interest earners do with their dollar interest
revenue? They reinvest it in more dollar assets,
providing funds for US investors to buy foreign
assets. A reduction in the US deficit will upset
this circle of cash flow and cause financial
problems in the US that can quickly translate into
political problems for the sitting administration.
As a rule, a current account deficit, the
broadest measure of the balance of trade in goods
and services, must be financed through the sale of
US assets to foreign investors and lenders.
However, the $333 billion increase in the net US
liability position in 2005 to a negative $792
billion was considerably smaller than the current
account deficit of $210 billion for the year,
largely because of a substantial increase in the
value of foreign assets held by US investors. The
market value of foreign stocks held by domestic
investors alone increased $384 billion in 2005,
much more than the $69 billion increase in the
value of foreign holdings of US stocks. In other
words, US assets are being swapped for foreign
assets at a premium.
Foreign central banks
sharply increased their holdings of US government
securities in 2005, as they purchased dollar
assets to keep the values of their currencies from
rising against the dollar. China alone increased
its holdings of foreign-exchange reserves by
almost $210 billion in 2005. As a result, the real
value of the US dollar gained 3.7% in 2005,
despite growing trade deficits and the declining
NIIP. A rise in the exchange value of the yuan
against the dollar will mean less Chinese
purchases of US sovereign debt. Does the US really
think that is to its advantage?
NIIP is
measured by two components: (1) direct investment,
the value of domestic operations directly
controlled by a foreign company; and (2) financial
liabilities, the value of stocks, bonds, and bank
deposits held overseas. At the start of 2004,
foreign direct investment in the United States was
$2.4 trillion, while US direct investment abroad
was about $2.7 trillion. US-held foreign financial
assets amounted to $5.1 trillion while
foreign-held US financial assets amounted to $8.1
trillion, or 74% of GDP. The 2004 NIIP was a
negative $3 trillion, about one third held by
China alone. FDI to China in 2005 was only $72
billion, about 7% of its foreign reserves.
At the start of 2004, total US securities
had a market value of $33.4 trillion, about 50% of
the world total. Foreign investors held more than
38% of the $4 trillion in US Treasury bonds, but
only 11% of the $6.1 trillion in agency bonds
(such as those issued by the Federal National
Mortgage Association, or Fannie Mae, and the
Federal Home Loan Mortgage Corp, or Freddie Mac);
23% of the $6.5 trillion in corporate bonds; and
11% of the $15.5 trillion in equities outstanding.
These foreign liabilities are the result of a
string of current account deficits that have grown
from 1.5% of GDP in the mid-1990s to 7% of GDP,
about $805 billion, in 2005. Economists at the
Organization for Economic Cooperation and
Development estimate that ongoing deficits of 3%
of GDP would bring the US NIIP to negative 40% of
GDP by 2010, and that it would eventually
stabilize at around negative 63%. If the deficit
remains at today's level, they foresee the NIIP
growing to negative 50% of GDP by 2010 and
eventually to negative 100%.
Yet future
dollar depreciation and market adjustments in
interest rates and asset prices will likely check
the negative increase of the NIIP. Dollar
depreciation against the euro and the yen in 2002,
2003 and 2004 kept the NIIP flat despite rising
current account deficits. Under dollar hegemony,
chronic US current-account deficits reflect strong
economic fundamentals rather than fatal structural
flaws. The problem with US trade policy is not
economic but political fallouts from unbalanced
dislocations such as income disparity and
sector-related job loss.
Three ways to
look at the trade deficit A trade-oriented
approach views US current-account deficits as
byproducts of robust economic growth, reinforced
by an overvalued dollar and the US economy's
structural import bias. In this view, the US has a
stubborn current-account deficit because it grows
both faster and with more efficiency than its
trading partners and spends a disproportionate
share of its growing income on imported goods and
services to further accelerate its economic
development paid for with debt denominated in
dollars that the US can print at will.
A
related perspective blames low domestic saving for
the danger of trade deficits, fearing that a
sudden reluctance by foreigners to continue
exporting their excess savings to the US would
send the US economy into financial crisis. But US
saving is stronger than government statistics
show. Capital gains on equities, retirement plans,
and home market values even after the current
correction, which add up to 20% of GDP, are
excluded from measurements of personal savings.
The national account also excludes "intangible"
investment: spending on knowledge-creating
activities such as on-the-job training,
new-product development and testing, design and
development, and managerial time spent on
workplace organization. Economists at the National
Bureau of Economic Research estimate that
intangible investment grew rapidly during the
1990s and is now at least as large as physical
investment in plant and equipment: more than $1
trillion per year, or 10% of GDP. Consequently,
the size and growth rate of the US economy have
been seriously underestimated by the neglect of
stealth saving.
A third approach to the
current-account deficit focuses on the growth and
composition of global wealth. In this framework,
international capital movements drive the
current-account balance, rather than vice versa.
With the US economy expected to grow faster than
Europe's and Japan's over the next several decades
and wealth growing rapidly in Asia, especially in
China and India, foreign wealth will continue to
flock to US financial markets. This could generate
a sequence of US deficits as high as 5% of GDP,
causing the NIIP to balloon. But such an increase
would not mean an end to the foreign appetite for
US assets; NIIP ratios that appear dangerously
high relative to US GDP would still be sustainable
because of the rapid growth of global wealth. The
only obstacle is political restrictions put on
foreign acquisition of US assets.
US
financial markets have stayed strong even as the
financing of the US deficit shifts from private
investors to foreign central banks. From 2000 to
2003, the official institutional share of
investment inflows rose from 4% to 30%. A large
percentage of the $1.3 trillion in Asian
government foreign exchange reserves is in US
assets. Central banks now claim about 12% of total
foreign-owned assets in the United States,
including more than $1 trillion in Treasury and
agency securities. Official inflows from Asia will
likely continue for the foreseeable future,
keeping US interest rates from rising too fast and
choking off investment. Yet the US phobia against
government ownership (versus private ownership)
will eventually make this trend a political
problem.
Senator Schumer charges China
with pursuing a "mercantilist" development
strategy of undervalued exchange rates to support
export-led growth at the expense of the US. This
is uninformed grandstanding because mercantilism
has to do with gold-backed specie current, not a
fiat currency such as the dollar. Under dollar
hegemony, China must continue to finance US
imports of its exports, since the US is its
largest market and a major source of inward direct
investment. Only a fundamental transformation in
China's development and growth strategy could
undermine these unequal terms of trade, an
unlikely prospect as long as Chinese policymakers
remain under the toxic spell of snake-oil
neo-liberalism. The biggest threat to US hegemony
stems not from the sentiments of foreign
investors, but from protectionism and isolationism
at home.
For China, US protectionism will
force it to turn from export toward domestic
development. Mao Zedong said that bad things could
be turned into good things. Such a shift will
shift China from its slippery path to a comprador
mode of development back onto the track of
economic self-determination.
Strategic
economic dialogue Since assuming office on
July 3, Secretary Paulson has put together a
"strategic economic dialogue" that began in
September. A key to the success of this
potentially highly useful dialogue is to not to
push China in the direction as a cheap-labor
colony of the US, but to allow China to develop as
a powerful engine of growth for Asia and the
global economy. To do that China must be weaned
from its current addiction to labor-intensive
export and redirect its energy toward domestic
development not from foreign capital but with
sovereign credit. Only a vibrant Chinese economy
that trades with the US as an equal partner can
set the US free from the ironic problem that
dollar hegemony has created for its economy.
Congresswoman Nancy Pelosi, the California
Democrat who is to serve as Speaker of the House
next year and who has earned a string of misguided
anti-China medals during her political career, has
already signaled a tougher line on China, raising
the stakes for the treasury secretary. "Many of us
in the Congress will be watching closely for
tangible results from Secretary Paulson's trip,"
Pelosi said through a spokesman, asserting that
the Bush administration's policies on China have
generally been ineffective across the board. The
tangible results, if they come to pass, will be a
hard landing for the US economy. The incoming
Speaker needs to understand that US-China trade is
a key factor behind this Goldilocks US economy.
In his first speech, Paulson said: "These
challenges are made even more difficult by the
fact that within China, as in the US, there are
loud voices espousing anti-reform, protectionist
sentiment. In China this resistance stems from a
number of factors including that the benefits of
this economic expansion have been spread unevenly
among its citizens and that some influential
people have never fully embraced the need to open
up the Chinese economy to competition. This
protectionist sentiment is evidenced by increasing
levels of public discontent, demonstrations, and
anti-reform articles written by prominent
academics."
The wealth and income
gap The widening gap between the richest
and poorest US residents had not been the focus of
attention by anyone in the Bush administration
until Paulson's appointment. He sees it as a
long-term economic policy challenge. Paulson
appears to attempt to re-frame the policy debate
on this fundamental issue as a solution to the
trade problem. The trade problem is rooted in
global income inequality which is a problem that
the US cannot solve without first addressing its
domestic income inequality.
The wealth gap
is a fixture of the industrialization phase of US
economic history but relative income equality has
been the dynamo of the US consumer economy.
"Fordism" put the US on the road to rising
industrial wages to create the US middle class out
of factory workers and allow the US economy to
overtake its older European competitors. The two
World Wars gave US workers income growth that
consistently outstripped inflation and allowed
productivity growth to sustain spectacular growth
of consumer demand, a key component in the success
of the US economy.
Market capitalism
naturally produces income disparity and
polarization that leads to recurrent economic
crises. To correct this structural flaw, the
nation adopted an income policy. Income
redistribution has been the tradition of the US
tax regime since the New Deal. With the onset of
eight years of supply-side "Reaganomics", followed
by another eight years of neo-liberal "Rubinomics"
under Clinton, whom orthodox liberal Democrats
accuse as being the best Republican president in
history, inequality has been growing in US society
to fuel a vibrant economy. While the Republicans
adopted a new income policy to redistribute income
upward with the watering down of the progressive
income tax, the neo-liberal Clinton Democrats used
outsourcing in a globalized market economy to keep
US wages from rising, and built a fiscal surplus
by starving social spending. The result has been
to expand the globalized economy at the expense of
the US domestic economy.
For the past two
decades, two-party democracy has failed to provide
alternative choices in economic policy for the US
electorate. And outsourcing is not the only factor
driving US wages down: even as average worker
productivity within the US has surged, average
hourly earnings have stagnated, while the nation's
economic elites have prospered with astronomical
levels of income. New sectors such as high tech,
information technology and financial services
operate on the model of low salaries and high
stock options. Even for investors, the trend has
been to favor equity appreciation over dividend
income. Neo-liberal economist seem to have
forgotten the basic rule in finance: Income is
all. Economic growth without income is a fantasy.
Income disparity has now reached obscene
levels. Capital One Financial chief executive
officer Richard Fairbank exercised 3.6 million
options for gains of nearly $250 million, on which
he paid tax on the lower capital-gain rate rather
the income-tax rate. His personal take exceeded
the annual corporate profits of more than half of
the Fortune 1000 companies, including Goodyear
Tire & Rubber, Reebok and Pier One. Median pay
among chief executives running most of the United
States' 100 largest companies soared 25% to $17.9
million in 2005, dwarfing the 3.1% average gain by
typical US workers. And Congress is in the midst
of a passionate debate over raising the minimum
wage from the current $5.15 an hour to $7.25 an
hour in 2009 in three steps, with opponents to the
proposed bill claiming that such a raise would
destroy the US economy. The idea of indexing the
minimum wage to inflation is considered a
legislative non-starter.
US corporate
earnings are at an all-time high because wages
have been stagnant. Corporations are overflowing
with cash but they refuse to pass it on to their
workers. Instead, corporations adopt share
buy-back schemes, using the surplus cash to raise
the market value of the stocks.
To his
credit, Paulson is the first treasury secretary in
recent history to focus on the inequality problem.
In his first major speech as secretary, Paulson
said: "Amid this country's strong economic
expansion, many Americans simply aren't feeling
the benefits. Their increases in wages are being
eaten up by high energy prices and rising
health-care costs, among others." Paulson gave
notice that this issue will be a priority in his
agenda to restructure the US economy.
A
Federal Reserve survey shows that between 2001 and
2004, the median income of US workers with
post-secondary degrees barely budged, rising from
$72,300 to $73,000, after adjusting for inflation.
The Clinton administration did almost nothing to
advance the interests of organized labor, or
working people more generally. Union membership
continued its long decline during the Clinton
presidency, standing at 13.5% of the total
workforce when he left office. A paper co-authored
by Rubin observed: "Prosperity has neither
trickled down nor rippled outward. Between 1973
and 2003, real GDP per capita in the United States
increased 73%, while real median hourly
compensation rose only 13%."
New
populism against Rubinomics A new wave of
economic populism is surging along with Democratic
victory at the polls. Yet these new populists seem
to target foreign trade exclusively, not realizing
that the imbalance in trade is the result rather
than the cause of the new age of economic
inequality, the fountainhead of which originated
in US domestic policy. If Paulson really wants to
deal with the problem of persistent US trade
deficits, the solution lies not in Beijing, but at
home in the US.
The new populists argue
that the trade pacts beginning with the North
American Free Trade Agreement (NAFTA) and
continuing through the various World Trade
Organization (WTO) negotiations have failed to
protect workers' rights to organize unions and
thus raise wages in the low-wage countries.
Instead, wages in high-wage countries have
continued to stagnate or drift downward in real
purchasing power. They also insist not only on an
increase in the minimum wage but on tying it to
the cost of living so that future inflation will
not erode its real value, as it has in the past.
Just as the neo-conservatives have
hijacked foreign policy in the Bush
administration, the neo-liberal Clinton wing of
the Democratic Party hijacked the party's economic
policies. The Clinton neo-liberals imported the
Republican ideology that the economy could achieve
sustained growth only if markets were allowed to
operate unregulated around the globe. Treating
labor as a captured constituency, the Clinton
administration vigorously supported free trade
agreements like NAFTA and agreed to China's
admission into the WTO, to expand the global
economy at the expense of the US domestic economy,
along with half-hearted promises of worker
retraining and other safety-net measures that
Clinton's balanced budget could not fund. The
adverse effects of Rubinomics were masked by a
temporary burst of unsustainable economic
prosperity caused by corporate and consumer debt.
The new populists want an alternative to
Rubinomics, one that register growths by the
income received by the middle class. They argue
that the national income has increasingly flowed
disproportionately into corporate profit and the
rich. They call for a review of US-led
globalization and for new terms of trade that do
not put the cost of economic expansion entirely on
the chronic poor, the newly poor and the powerless
both domestically and globally. They call for
government regulation in the terms of trade to
distribute the benefits more equitably.
The free traders accuse the new populists
of being protectionists. Rubin admits that
globalization has not brought job security or
rising incomes to US workers and that as the
global economy expands to benefit the US in
general, it does so at the expense of shrinking
the US middle class's share of the economic pie.
Yet Rubinomists stick to the worn-out Margaret
Thatcher claim of TINA (there is no alternative),
arguing that regulating trade and imposing market
restrictions would be self-defeating.
There are now enough historical data to
question the false claim of benefits of financial
globalization, which has brought about monetary
and financial crises around the world every few
years. The emergence of unregulated capital, debt
and currency markets has prevented governments
around the world from effectively using sovereign
credit to finance domestic development, and forced
all nations to distort their economies toward
over-reliance on exports for dollars and to
compete by joining the race to the bottom on wages
and environmental abuse.
And it is not
clear that Rubinomics was really responsible for
economic growth of the 1990s. Historical data
suggest that the information revolution greatly
improved productivity even in economies insulated
from Rubinomics, such as China and India. A more
balanced US economic policy away from maximization
of profits might have let that productivity burst
lift the global economy into a higher plane
without the distortions that are haunting it now.
The free market does not know best. Left
undirected, a free market will race ahead at
unsafe speed toward accidents waiting to happen.
In his 2003 book In an Uncertain
World, Rubin admits: "In retrospect, the
effect of the Clinton economic plan on business
and consumer confidence may have been even more
important than the effect on interest rates."
Business investment during the Clinton boom years
was not exceptionally vigorous. It was the
brain-power-intensive information revolution that
helped trigger big gains in productivity and
growth despite a low capital input compared with
earlier capital-intensive cycles, such as the
railroad age.
The 1997 Economic Report of
the President released in February, five months
before the 1997 Asian financial crisis, predicted
that growth would average a meager 2.2% over the
next four years. The actual growth rate turned out
to be 3.9%. A case can be made that the high
growth rate was the result of the Fed's monetary
easing in response to the Asian financial crises
that started on July 2, 1997, in Thailand and
whirled around Asia like a tornado. When contagion
hit Wall Street in October, the Fed did what no
other central bank could do. It printed dollars to
provide liquidity to the US banking system to not
only contain the crisis, but also to allow US
banks to buy up distressed Asian assets at
fire-sale prices. It was a clear example of how
dollar hegemony works.
Rubinomics is a
doctrine of aggressive trade liberalization paid
for by squeezing domestic and foreign workers
while balancing the fiscal budget at home by
cutting social programs to avoid the need for
raising taxes progressively. The Clinton federal
surplus came directly from the pockets of workers.
Yet Rubin has said publicly that he understands
that income inequality, both domestic and around
the world, will produce a political backlash at
the core that threatens the neo-liberal trading
system, even the stability of capitalistic
democracy. Rubin acknowledges the ill-effect of
globalization on US wages, which takes on
political significance when the squeeze shifts
from just the poor who seldom vote, to the
politically active middle class. The favoritism of
government policy toward the rich, particularly
the tax structure, has become so embarrassingly
obscene that even the super-rich such as Warren
Buffet complain about its unfairness.
Rubin has launched the Hamilton Project, a
policy group of like-minded economists and
financiers who are developing ameliorative
measures to aid the threatened workforce and to
create a broader political constituency that will
defend the trading system against populist
backlash. Yet how can one defend a system that
creates wealth by making the majority poor? It is
not possible to deify Mammon, the demon of the
love of money.
The populist tidal wave may
well build up to a tsunami. As outsourcing moves
up the skill ladder, threatening the job security
of not just assembly-line workers, but highly
educated, resourceful and active workers in high
tech, information technology, medicine and
finance, the democratic process will turn against
neo-liberal globalization. The backlash can turn
ugly, mixing xenophobia with anti-Semitism.
The neo-conservative Weekly Standard
observes correctly that wages have been stagnant
because the increases in compensation have been
eaten up by soaring health-care costs. Yet both
neo-conservatives and conservatives oppose
universal health care as socialist. The Weekly
Standard proposes "outsourcing health-care
services to cheaper foreign countries where highly
qualified medical professionals working with the
latest equipment only charge less than a fraction
of the fees in the US. Some corporations have
already started doing this, and the results so far
have been very positive." The American Medical
Association, the conservative trade lobby for
doctors, will soon join the march against
globalization.
Neo-conservatives defend
globalization Globalization is being
defended by neo-conservatives, who are strange
bedfellows of neo-liberals. The Weekly Standard
wades in: "It is estimated that of the 28
Democrats who beat GOP [Grand Old Party, ie
Republican] House incumbents on election day, 22
are unabashed protectionists, with five being
pragmatic protectionists. All six losing GOP
senators were free traders. Even free trader Jim
Jeffords of Vermont is being replaced by the
reliably anti-globalization Bernie Sanders. There
is a new scent in the air, and if you're not
convinced, consider the life and times of Lou
Dobbs. The CNN television host suffered for years
from flat ratings as the young upstart Fox News
regularly cleaned his clock. Then Dobbs began
pounding the anti-globalization theme, night after
night bemoaning the American jobs lost to foreign
competition. His ratings suddenly shot up by more
than a third."
Free trade still has one
reliable defender: the presidential veto that the
Democrats do not have the vote to override for the
next two years.
A false
debate Yet the debate on globalization is
between two extremes rather than seeking
solutions. International trade is very desirable
if it augments domestic development.
Unfortunately, in the past two decades,
international trade has turned itself into an
inhibitor of domestic development. This is because
the destructiveness of dollar hegemony, which
forces all economies to suppress domestic wages
and development to compete for exports to earn
dollars that cannot be used at home.
What
is needed is a new international finance
architecture that allows export payments to be
denominated in the exporting country's currency so
that domestic development can be financed with
sovereign credit without having to resort to
importing foreign capital. Concurrently, growth
needs to be measured not in terms of how many
workers are laid off from mergers and acquisition
in the name of efficiency, but by how many new
jobs are created by improving productivity with
new technology. A corporate-tax regime should be
introduced to discourage obscene profits so that
earnings can be channeled more equitably back into
wages to stimulate consumer demand to reduce
overcapacity in the economy.
These are the
issues that Paulson and his team should be
exploring with their Chinese counterparts in the
"strategic economic dialogue" to develop a
symbiotic trade relationship between the two major
economies that will augment urgently needed
domestic development. There is no sense in kicking
around dead-horse issues like exchange rates and
intellectual-property rights.
Henry
C K Liu is chairman of a New York-based
private investment group. His website is at
http://www.henryckliu.com.
(Copyright 2006
Asia Times Online Ltd. All rights reserved. Please
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