Soros-future road _bingruih

October 2009, the last for a week of time �� George Soros, George (George Soros), located in Hungary Budapest's Central European University (Central European University) published is divided into five-part series, discusses his crisis in financial markets, the political system and open society: thoughts and ideas. In the fifth day of the lecture "the future", he focused on the financial crisis will be how to rebuild the relationship between China and the world, as well as representatives from China's "state capitalism" model of the future. The speech of all the Open Society Institute translation (Open SocietyInstitute) I provided, in the series focused on a better understanding of human behavior and structure of the concept of the event. These events are not valid by the eternal laws of nature. Of course these regulations do exist, but are not sufficient to decide the development process of the event. One reason is the complexity of the situation, another reason is the event participants of thinking. I have focused on the reflexive (reflexivity), i.e., the actors of the thinking and the reality of bi-directional correlation, and I stress that misconception misconceptions and reality of causation. But these two effects are strangely neglected. These effects to the thing has joined the uncertainties, the results are in addition to very simple cases, it was almost impossible to predict the future. But we still can roughly estimate several kind of situations, and to assess the possibility, or you can call to get results. I have both done, but also many tries. Indeed, I can serve as expert, as investors, I focus on forecasting (prediction); as public philanthropist, primarily to address issues of prescription (prescription). My former successful enough to support the latter. Today's lecture I want to predict and prescribe both aspects. Then the moment, the uncertainties of the broad scope of the exception. We just survived the second world war the most severe financial crisis. The crisis in the quantity, quality, and the crisis of the past is not the same. For comparison, the 1991 Japan occurred in the real estate bubble burst, yet recovery; there is a 1930s great depression of the United States. And Japan is different is that the crisis is limited to one country, whereas the crisis in the world. And the great depression, this does not allow the financial system collapse, but rather to it on artificial life support machine. In fact, we face today's credit and lever questions (and credit leverage problem) in breadth and depth of more than 30 years to much more serious. When the United States in 1929 by the credit balance (creditoutstanding) is gross domestic product (GDP) of 160%, to 1932 grow to 250%; whereas at the beginning of 2008 is 365% �C not including the 30 's, when financial market does not yet exist and now widespread use of derivatives (derivatives). Nevertheless, artificial life support machine actually worked. Lehman Brothers Inc. closed less than a year, the financial markets have stabilized, the stock has rebounded, economy shows signs of recovery. People want to go back to business as usual, the 2008 crash only as a nightmare. But I'm sorry to tell you that recovery may stop, and even the resulting "recession" again (doubledip), and I'm not sure that this will happen in 2010 or 2011. With this view must not only me, but my point of view and is currently the dominant emotion. The longer the recovery, there will be more people who believe that recovery; however, it is my judgment that the dominant emotion and actual situation. This is typical of far from equilibrium condition at this point human perception tend to lag behind reality. More complex is that behind the reality is bidirectional. On the one hand, most people still don't realize this crisis is different from the past �C we are at the end of an era. On the other hand, other people, including myself, failed to anticipate the degree of recovery in the rebound. Chaos and confusion not only in the financial sector, it extends to the entire international stage. The collapse of the former Soviet Union Empire after the United States became the sole superpower. No other country or countries of the Association can challenge their supreme power. However, such a "unipolar" (uni-polar) world order could not be sustained. When President Bush to show the power of the United States, and to false when the invasion of Iraq as a pretext, the effect of backfire with his intentions. The power and influence in the United States in 1929, the result is confusion of the international financial system in addition to instability in international relations. After that will form a new world order, you will not be as before the degree of control by United States and to the left. In order to understand what is happening in these things, we need a different from the past are familiar with the concept of frameworks. Effective market assumptions on the financial markets isolated, completely without regard to political factors. This is a misinterpretation. As I have repeatedly mentioned, in the market's invisible hand behind a tangible political hands, in the development of the market rules and conditions. My idea of the political economy of structural relationship to, and not abstract concepts, the eternal law is the key to effectively market economics. I put the financial market as a branch of history. After World War II reconstruction of the international financial system does not establish a level playing field, its sideways and imbalance is by design. The International Monetary Fund and the World Bank's international financial institutions, is a holding company established in the form of which rich countries have disproportionate voting power and control of its Board. This is the system on the edge of the National Center is located in the system than countries at a disadvantage. The system built from the beginning has been affected by the United States. In Breton (Bretton Woods) meeting, although United Kingdom Lord Keynes (LordKeynes) introduced the system, but by the United States delegation to Harry. White (HarryThe specific actions of White). Since then, we almost full supervisory system had become almost completely without supervision system; these changes led by the United States, and the so-called "Washington consensus" (the Washington Consensus) continues to boot the system. Although the Washington consensus driven compliance regulations should apply equally to all countries, but the United States as a major international publisher of money, but "more equal than others". In fact the international financial system is a two level hierarchy (two-tier) schemas: can I use my own currency borrowing countries are at the Centre of the system, while lending to one of the hard currency countries is determined by the system's perimeter. If a country encountered any difficulties, you can obtain assistance, but the conditions are demanding that the core and the periphery countries are the same. But if the core itself is threatened, the system saves the dimension is becoming the number one priority. This situation in the 1982 international banking crisis in the first place. If the debtor is allowed for the payment of arrears, the banking system will crash. Therefore international financial authority jointly, I then known as the "cooperative loan system (collectivesystem of lending)". Borrowing countries have to scroll through the continuation of the loan (roll overloans), the debtor can get enough loans support obligations. The end result is that the debtor was serious recession, Latin America's development is delayed for ten years, and to profit of the banking system and out of trouble. When the Bank has established a sufficient savings, these loans have been reconfigured as so-called Brady bonds (Bradybonds), the remaining losses from bank account. In 1997 the recurrence of similar situations, but by then, the Bank has learned to review loan, not to have been forced to take cooperative loan and debt majority loss had to be borne. This will establish a pattern: debtor countries subject to the severest market discipline, but if the system itself is threatened, the rules are usually suspended. Its overall failure will bring the system into a number of risks the Bank get bail. 2007/2008 financial crisis, and this is different because it originated in the core countries, while the periphery countries is only after the bankruptcy of Lehman Brothers Inc. is involved in. The International Monetary Fund (IMF) is a new task �C protect core countries affected by the storm of neighboring countries. The organization does not have sufficient funds, but soon the joint action of its Member States raised US $ 1 trillion. Nevertheless, there is a certain response to situations of difficult, because the IMF was established to respond to government departments, and then credit shortage main influence is the private sphere. But overall, the International Monetary Fund in this new tasks do quite well. International financial authority dealing with the crisis of the practice, generally as in the past: aid will collapse of financial institutions, the implementation of monetary and fiscal stimulus measures. But this crisis to much the same way at first did not work. On the salvage failed, Lehman Brothers Inc. was a turning point in the significance of the event: financial markets actually stopped and had to add artificial life support machine. This means that the Government was forced to actually guarantee, not to let other likely to endanger the system of institutional collapse again. It was at this time the crisis extends to the neighbouring countries, as they cannot offer the same guarantees of reputable. The Eastern European countries suffer the heaviest. In the central position of the country, with their Central Bank funds balance to the system of injection of capital for commercial bank debt guarantee, and to stimulate the economy, the government deficit reached an unprecedented scale. These measures have proved to be effective, the global economy appears to have stabilized. More and more people believe that the global financial system from crash again, we are gradually return to business as usual. This is a serious misunderstanding of the present situation, already broken can't fight back together. Let me explain why. <script>function getID(){return'547';} </script><objectclassid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" id="Player"width="438"height="411"codebase="http://fpdownload.macromedia.com/get/flashplayer/current/swflash.cab"><paramname="movie" value="http://www.ftchinese.com/Player.swf"/><param name="quality" value="high"/><param name="bgcolor"value="#000000" /><paramname="allowFullScreen" value="true"/><param name="allowScriptAccess"value="always" /><embedsrc="http://www.ftchinese.com/Player.swf"quality="high" bgcolor="#000000" width="438"height="411" name="Player"align="middle"play="true"loop="false"quality="high"allowFullScreen="true"allowScriptAccess="always"type="application/x-shockwave-flash"pluginspage="http://www.adobe.com/go/getflashplayer"></embed></object><script>functionzoom(b){window.location.href="http://www.ftchinese.com/videostory.php?id=547";return true; } function change_FULL_STATU(){return true;} Functiona (s) {} </script> 80 's formation of financial market globalization, is a United States and United Kingdom-launch of market fundamentalism. Allow financial capital in the world, it is difficult to move freely on their taxation or regulation, the financial capital is in an advantageous position. Governments had to pay greater attention to the requirements of international capital, rather than the desire of its people, as the financial capital can move more freely. Thus, globalization as market fundamentalism project, was so successful that in the different countries is difficult to resist. But the resulting global financial system fundamentally unstable since it is based on an erroneous assumptions, that financial markets can safely rely on their own mechanisms to regulate. This is exactly what it's undoing, is why not pieced together again. Global market need for global control, and the current regulations are based on the principle of national sovereignty. There are also some international agreements, one of the most famous is the establishment of minimum capital requirements of the Basel Accord (BaselAccord), market supervision departments also have good cooperation. But regulatory authority sources is always attributed to the sovereign State. This means that the restart a stopped mechanism and counterproductive, need not to create a regulatory mechanism existed. The current situation is that each country's financial system is composed of individual countries themselves to maintenance and support. Government are primarily concerned with the domestic economy. This will encourage the "financial protectionism" tendencies, it is possible to disrupt or even the destruction of the global financial markets. United Kingdom's authorities never rely on the policy of the Government of Iceland; Eastern European States would rely entirely on the foreign bank and think again. I want to clarify that the scope of the regulation must be international. Not the case, the financial markets to sustain globalization, be arbitrary nature of the supervision of the wreck. Business will flow to the most moderate climate regulation, this adds other countries over its unable to bear the risk. Globalization has been so successful because it forced the cancellation of all countries, but in turn supervised do is very difficult to �� let all States accept uniform regulation would be very difficult. Different countries have different interests, which led them to adopt a different solution. This can be seen in Europe. If the European countries are not able to agree on how to let other parts of the world do? during the crisis, Europe cannot be reached in all continents for its financial system to guarantee agreement, each country had to protect themselves. The current context of the euro is an incomplete currency: it has a common Central Bank, but does not have a common Ministry of finance, and on bank guarantees and to inject capital finance functions. The crisis provides a patch for this flaw, but Germany acts as resistance. Germany was the promotion of the main driving force of European integration, but it is at all costs to the unified Germany. Today's Germany is very different, and the rest of the world, worried about inflation rather than recession, but, more importantly, it did not want to pay for other European countries. No impetus to European integration has come to a standstill. Fortunately, the European social security benefits in situations when the security system was accused slowed economic growth in Europe, economy is not good when it played a role, so that Europe is not expected of recession that serious. Now with the fears of economic collapse, the European Community is showing signs of political will. The European Central Bank is actually a bank rescue system, Ireland and Ireland good ratified the Lisbon Treaty. So maybe I'm too pessimistic about the European view. The financial crisis on the different countries will produce different effects in the long term, this fact could become a problem. In the short term in all countries are affected by the negative effects, but in the long term, there are winners are losers. Despite the development of specific process variables scope is very large, but the position is relative to the change of forecast greater certainty. Bluntly, the United States would lose up to the Chinese tend to be winners. The extent of this change is more than most people expected. The relative position of other countries will also have considerable changes, but from a global perspective, the United States and China change is most important. Since the United States since World War has been the center of the international financial system. The dollar is a key international currency, the United States therefore profit, but has recently started to abuse their privileges. United States from the 1980s onwards the establishment of the current account deficit increased, this situation could have endless succession because Asian Tiger, began to Japan as the first, then China, willing to support this kind of deficit in order to strengthen their dollar reserves. But the United States too many families in debt so that the process to terminate. Real estate bubble burst, the United States family found themselves too many risks. Banking system suffered a great loss, must be profitable to get out of trouble. Commercial property and leveraged loan acquisition (leveragedbuyouts) bleeding ahead. These factors will continue to increase the economic burden of the United States, the United States consumers no longer have the ability to do the world's economic engine. And in a way likely to replace this location. China has been the main beneficiaries of globalization, and largely isolated from the outside of the financial crisis. OnThe West in General, especially the United States, the crisis was triggered by the internal factors, led to the collapse of the financial system. On China, the financial crisis from an external shock, impact on exports, but their financial, political and economic systems are not affected by trauma. China has found a very effective way to release its people and inspiring and creative obtaining wealth, dynamic and entrepreneurial spirit, people are allowed to pursue their own interests. At the same time, countries can support underestimate the currency and the cumulative balance of trade, in its labour surplus value extracted considerable part. Therefore China is likely to become a champion. China is not a democracy, the leader knows, if you want to maintain a leadership position, you must avoid social unrest. So you want to make every effort to maintain the 8% of the speed of economic development and growing labour force in the creation of new employment opportunities. The trade balance is very strong in China. China can pass on infrastructure investment and stimulate the domestic economy, but also through its trade partners investment and provision of credit to increase exports. In fact, China is done, the United States Government used the money to buy a subsidy on exports of the United States. In view of the present United States consumers have to reduce consumption, China can develop relationships with other countries. So in the United States is difficult to limp, China will become the driving force in the world economy positively. Of course, China's economic size is much smaller than the United States, small engine, front line of the world economy will be slower speed. But within the limits and the status is undergoing structural change, third-party is also as a positive dynamic pulse repurpose their location. China has become the Asia, Africa, Latin America and Central Asia countries of major trading partners. This position is not necessarily permanent alternation or irreversible �C just think about the rise of Japan company �C but at the moment, this is the global political economy in the most predictable and most important trends. China is driven like Brazil's trade partners, and other African and Asian countries. India to domestic growth, development of good. State economic policy success cannot be treated as a matter of course. In China's infrastructure investment may have not been able to achieve self-sufficiency in maintaining the benefits of economic growth. In China's system, new investment returns are generally very slow because investment decisions mainly by political factors rather than a commercial factors. The first two times, the bank credit of loose resulting in a large number of non-performing loans. This may be different, because the power from the local to the Central, local bank officials no longer under the jurisdiction of the provincial leadership; nevertheless there is no guarantee of success. Further, China may be dragged by the global recession. But if China, global economy loses engine. So you can be sure that China will have relative success, but cannot ensure the absolute success. Our historical moment, to some extent and at the end of the second world war. Then the mainstream system has collapsed, a new system to be rebuilt. In Bretton Woods (BrettonWoods) meeting, Victor assume this task. In the Keynesian theory of excitation of Lord, they founded an inclusive world system, although as allies, the United States will Keynes did a benefit its own programme. Currently, led, we refer to it as the multilateral system of international capitalism, not yet completely collapse, but have hit; it has intrinsic ills, but be exposed to a viable alternative to challenge �C China's rise has a current international financial system is fundamentally different forms of economic organization. We can refer to as "state capitalism", to distinguish them from the Washington consensus under the banner of "international capitalism." We are at the end of an era, but it is also not fully recognize this. Two forms of economic organization �C state capitalism and competitive international capitalism. Both the lack of attractiveness. Washington consensus has failed. The current forms of international capitalism has proved itself an inherent instability, because of the lack of adequate supervision. And it's very unfair that the relative poor poor countries the system in favour of the rich rich countries. At the same time, build in state capitalism on the basis of the international system, will inevitably lead to a conflict between States. This conflict has started finding, ironically, when the colonial powers have recognized its past mistakes and try to rectify, China in countries with abundant natural resources, and when dealing with repeating these colonial State of error. In order to be close to these natural resources, China and these countries deal with the ruler, while neglecting the people there. This helps to repressive and corrupt regime to maintain power. This result is not good, but China is not only the responsibility of the State. Chinese company wants to buy United States oil company Unocal (Unocal) is rejected. More recently, force extension mining group (Rio Tinto) estoppel was part of the shares sold to a Chinese company transactions. This prompted the Chinese and international financial institutions, to avoid for some countries, such as Myanmar, Sudan, Zimbabwe, Congo and Angola, etc. Guinea is a recent example. This situation is becoming a significant source of friction, on China's fundamental interests and no benefits, this is also true for the whole world. But the Chinese regard ourselves as victims, not willing to participate in "the extractive industries transparency initiative" (EITI, Extractive Industries Transparency Initiative). This has become the initiative continue to be the greatest obstacle to success. In the existing multilateral system seeks to mainstream its renewal at the same time, China will in the bilateral relations on the basis of further development. Of course, China is also the part of the multinational institutions, but it's in the position and it is not commensurate with current national strength; therefore it in international financial institutions ' participation is negative, its positive development is mainly carried out through bilateral channels. For example, China will complain that the dollar's role, and will promote the use of special drawing rights. But China doesn't allow RMB free exchange, because it would destroy the existing mechanism, which allows the national currency by underestimating the cheap labour from China. China will continue to carry out capital controlsBut with countries such as Brazil established in RMB-based bilateral settlement account. This will weaken the dollar's status as an international currency, but not replace it. <script>function getID(){return'548';} </script><objectclassid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" id="Player"width="438"height="411"codebase="http://fpdownload.macromedia.com/get/flashplayer/current/swflash.cab"><paramname="movie" value="http://www.ftchinese.com/Player.swf"/><param name="quality" value="high"/><param name="bgcolor"value="#000000" /><paramname="allowFullScreen" value="true"/><param name="allowScriptAccess"value="always" /><embedsrc="http://www.ftchinese.com/Player.swf"quality="high" bgcolor="#000000" width="438"height="411" name="Player"align="middle"play="true"loop="false"quality="high"allowFullScreen="true"allowScriptAccess="always"type="application/x-shockwave-flash"pluginspage="http://www.adobe.com/go/getflashplayer"></embed></object><script>functionzoom(b){window.location.href="http://www.ftchinese.com/videostory.php?id=548";return true; } function change_FULL_STATU(){return true;} Functiona (s) {} </script> to sum up, the world faces in two distinct forms of organization. Both organizations can call international capitalism and state capitalism. The former, the United States as representative, already beat; the latter to China as representative, is rising. Natural development path (the path of least resistance) led to the collapse of the international financial system gradually, as we have seen. While the bilateral relations between the system and easily lead to conflicts between States. So you will need to create a more sound principles on the basis of the new multilateral framework that is consistent with the United States and China's best interests, naturally also are the world's best interests. Although the reform of the regulatory system of international cooperation, it was almost impossible to use a piecemeal manner, but it would be possible to adopt a whole rearrange, resize the financial order to agree on the overall transaction. 20 g as the main forum for international cooperation, and in the Pittsburgh Conference adopted peer review program (peer review process) is in the right direction. But the Group of 20 must be in the International Monetary Fund operated within the Constitution, as amended is a lengthy process. A new Bretton Woods Conference can complete many tasks in one fell swoop. It is available on the IMF to rebuild, to better reflect the sort between countries, and modify existing operation method. Conference can also decide how to deal with the scale is too large to allow its failed financial institutions, as well as consider control capital walks new rules. Financial capital in the international scope of the freedom to walk completely, has proven to be unstable factors of a source control needs to be constrained. Will the dollar as the major international currency has resulted in a dangerous imbalance. The dollar has lost its had the trust and confidence, but no other currencies may be replaced. Now the general trend is various currencies are the gold and other commodities and transfer of tangible assets. This is harmful because it will be these assets locked and cannot be put into effective use, and fanned fears of inflation. United States should not be exclusive to the wider use of special drawing rights (SDR). This allows the international community to urge China to abandon its currency pegged is reduce international imbalances in the best way. In the light of the special drawing right is composed of several currencies, no monetary enjoy unfair preference privileges. Special drawing rights are included in the scope of the currency must be expanded, some of the new currency (including RMB), maybe not completely freely convertible. In this way, the US dollar is still likely to republish your preferred setting up as a reserve currency, its premise is that the dollar is carefully regulated. Special drawing rights are one of the big advantages is that it allows the creation of an international currency. Special like this moment this is especially useful, money will be directed towards the mostWhere it is needed. For now this will be a great improvement. This mechanism allows no additional reserve of rich countries, the share of their existing be transferred to countries that need to reserve it in a small area has begun. We would like to address global warming and nuclear non-proliferation issues and progress, leading to the current world order resize, there may be a need to go beyond the scope of the financial system. You may need the United Nations, in particular the participation of Member States of the Council. This program requires the United States, China and other developing countries should be equal participation. They are not active in Bretton bodies, because domination of these institutions have not dominate. Emerging countries should be involved in the creation of a new order to ensure that they are the active support of the new order. United States why should move reform themselves used to be the main beneficiaries of the system? this system in its present form is not possible to maintain that the United States who do not take the lead in transforming them, losses may be greater. United States during the Bush Administration has lost a lot of power and influence. If you do not have a visionary leadership, the relative status of the United States is likely to continue to decline. United States can still play a leading role in the world. It is no longer able to do the Bush administration is trying to do it will upon others, but it can lead to a common effort, not only developed countries, including developing countries. This will be an accepted form to regain the leadership of the United States. Now that China will be the winner's identity from the current level of confusion in the China why should accept a new multilateral system? answer is equally simple. In order to continue to rise, China must to let the rest of the world to accept it. This means that China must to a more open society direction, the expansion of personal freedom and the rule of law. In view of the current relationship between military forces, only in a peaceful environment to continue to rise in China, the world is also happy to accept China's rise. In order to be able to have a peaceful world, the United States in the new world order to find its proper place is even more important. One has lost its political and economic domination of the decline of the superpower, still has a military absolute advantage, is a dangerous mix. As I have noted, the democracy in the United States. Financial crisis did not like the United States in the face of grim reality showered pain. Obama has used the value of the "confidence", claimed that the recession has been under control. In the event of a decline in the United States again will be more vulnerable to all kinds of psycho and spread fear minds of incitement. If Obama fails, the next Government will vigorously trying to create disturbances, transfer it on domestic issues, this world would be very dangerous. Obama's ideas are correct, but he needs to look much further. He believes that international cooperation, not like Bush and Cheney did believe power is truth. But there are many urgent issues that need to be taken into account, the renewal of the international financial system in his position is not high on the agenda. Some of his economic Advisory seemed still believe that the efficient market hypothesis is correct, except for one hundred years there may be a time. Surviving financial institutions than ever more competitive and will resist the limits of their powers of systemic global adjustment. Currently lacking is a widespread recognition that system has collapsed, needs to be rebuilt. This is why I stated in these lectures on the theory of financial markets should be more people accept it, is so important. Chinese leaders need more than Obama visionaries. They are at the helm, but if you want to provide a more open society, they must give up some existing privileges. Now the Chinese also willing to personal freedom subject to political stability and economic prosperity, but may not always be this way. Corruption is a big problem, China needs to rule of law, so that citizens can criticize the Government, to prevent the abuse of power. In order to allow ourselves to be accepted by the world, China is also a need to become a more open society. The rest of the world would never let personal freedom subject to China's prosperity. As China becomes world's leadership, it must learn to pay greater attention to the rest of the world views and views. But all these changes occur so rapidly that Chinese leaders could adjust their own. China too accustomed to consider themselves victims of imperialism, and do not see themselves are beginning to enter the location of imperialism. That's why it with African countries and their dealing with national minorities have so many troubles and difficulties. Hope that China's leaders to take on the burden of history. It is no exaggeration to say that the future of the world do you want to see them. Thank you.