Beijing holds key to prosperity

By Henry C K Liu

Part 1: Denial as the storm gathered

The present crisis undermining the very fabric of the United States financial and economic system has conjured up the shades of the crisis that came with the collapse of the economic bubble in Japan in the mid-1990s.

Yet Japan, whose financial system has been in continuous recession for more than a decade, is, ironically, relatively sheltered from the current credit squeeze. It has now come under US and European Union pressure to try to stimulate domestic demand through government spending.