Frank Newman: Six 'Myths' Holding Back the US Economy
HONG KONG, April 12, 2012 — Frank Newman joined Asia Society for a luncheon discussion of his new book, Six Myths That Hold Back America – And What America Can Learn from the Growth of China’s Economy, the latest in an ongoing series of events centered on the the Asia Pacific Region's growing economic and geopolitical ascendancy.
In his discussion, Newman examined one of the most fundamental questions facing global economic policy makers today: What are the fundamental differences between government financing and the banking systems of the U.S., China and Europe, and what are the future challenges that each will face? How do we recognize the strengths and weaknesses of each and draw upon them for a stronger financial future?
Newman currently serves as Chairman - China of Promontory Financial Group. He recently completed five years as Chairman of the Board and CEO of Shenzhen Development Bank in China. He also draws upon his extensive experience as a former senior U.S. Treasury official, and as chairman of leading banks in the U.S. and China.
Newman began by outlining his six myths, which included the misconceptions that “Asian nations are bankrolling the United States,” that “if people save more, GDP and unemployment will rise,” and that “deficits create a great burden of repayment on our children,” among others. Newman walked the audience through each of his six myths, explaining the logic behind the misconstruction and outlining the realities of each situation.
The crux of Newman’s argument, however, was his belief that China is managing its economy more successfully than the United States. One of the things that impressed him most, he told his audience here, was China’s enduring confidence in late 2008, the grimmest economic moment in recent memory.
“Everyone in the U.S. was saying, it’s tough times, and that we need to be really cautious. In the meantime, the message I was hearing in China was very, very different. China told its people: we will undertake big infrastructure programs that will make up for the loss in imports. We will do whatever is necessary, so don’t worry.”
Newman argued that this confidence was a fundamental component of the Chinese economic success story, and that the U.S. has a lot to learn from this positive outlook and attitude.
Reported by Maddie Gressel
Video: Watch the complete program (47 min., 55 sec.)