Walter Hutchens’ Blog

I am flattered to have been invited to speak at the Wharton China Business Forum (WCBF), a student-run conference now in its seventh year. This year the theme is “Feeding the Dragon: Sustaining China’s Growth.” I am invited to appear on a panel “which focuses on the structure of China’s capital markets and its current state amidst the global economic slowdown.” The conference will be held February 21, 2009 at the Huntsman Building on Penn’s campus (I once met Jon Huntsman, years ago, in my first job out of college).

There are lots of interesting developments in China’s capital markets that I might talk about. However, I am thinking it would be fun to gather some of the predictions and analysis—the advice—that has been given to China over the years concerning how it ought to reform of its banking system, stock markets and economy generally. My guess is that is will be quite comical to read some of that advice now in light of current global economic conditions.

Specifically I am thinking of dire predictions that flaws in China’s banking system will destabalize their whole economy. Right, as in lead to the insolvency and failure of massive institutions, requiring a massive government bail-out or intervention to avert financial catastrophe.

I am also thinking of predictions—some of which I have myself made—that unless they change their approach to capital market regulation they will not have thriving, efficient capital markets. Indeed, think I once argued in Shanghai that China ought to allow and should not overly-regulate financail derivatives. Here I think I must join Alan Greenspan in saying that, ah, it seems I was, ah, wrong . . .

I do still think China’s capital markets require substantial reform if they are to serve certain purposes (like encouraging innovation and helping efficiently allocate capital among competing entrepreneurs), but surely at this moment we should all approach these subjects with some humility if not contrition, yes?