Lu Jing: Crisis Comes with Opportunities

    Lu Jing, former senior bank examiner with the Federal Reserve Bank of New York, holds that the financial crisis is spreading all over the world. China faces a potential threat because of its large foreign exchange reserves. In such an uncertain financial situation, it is not advisable to inject capital into financial markets. “More American banks are teetering on the brink of bankruptcy, so are insurance companies and funds (monetary funds, hedge funds and privately offered funds). And most financial institutions lack transparency,” claims Lu Jing. From a long-term perspective, Lu advises, we still need to be mindful of risks in exchange rates and interest rates of the US dollar. Do not put all your eggs into one basket. Try to decentralize investments. Investing in the tangible economy, in areas like real estate, is a good way to moderate the effects of the downturn in the US economy. Meanwhile, some technical industries, which were off limits to China in the past, may open the door and utilize Chinese capital. “Crisis comes with opportunities, and China could create a better investment environment by taking this opportunity,” says Lu Jing.