Video: Henry Paulson Discusses 'Certainty' of Financial Crisis in China and How to Manage it

Henry Paulson speaks at Asia Society New York on April 13, 2015. (4 min., 22 sec.)

Speaking at Asia Society New York with New Yorker correspondent Evan Osnos, former U.S. Treasury Secretary Henry Paulson explained Monday that it’s impossible to predict the timing or magnitude of a financial crisis, but any country with government, banks, and capital markets — regardless of political or economic system — will have flawed policies. “Flawed policies will lead to excesses, and they’ll lead to financial crisis,” Paulson said. “That’s a certainty.”

In the above video clip, Paulson explains that Chinese leaders understand the risks, but reform will be difficult in the face of vested interests and powerful state-owned enterprises. “I think the key is to open competition to the private sector,” he said. “When you look at opening up finance, when you look at telecom, when you look at energy sectors, that’s really the key thing.”