Can China End The Credit Crunch?

Chinese premier Wen Jiabao is due to arrive in Britain for talks with Gordon Brown. The two are expected to discuss how they can co-operate to tackle the global financial crisis. Holly Williams reports on how China could be crucial to the recovery.

Could these women help save us all from the financial crisis? China has transformed itself from drab Communism to the world's third biggest economy with 1.3 billion consumers hungry for the decade of fruits of Capitalism. And they might be the ones who give the keys of life to the world's economy.

While people in Britain and America have been taking on too much debt, the Chinese have spent the last two decades carefully saving their money. In fact, this country has one of the highest national savings rates in the world. If the Chinese can now be coked into spending their money, economists say that will be key to a global recovery.

The Chinese premier Wen Jiabao was in Davos this week, talking up how China can revive the world's fortunes. Gordon Brown wants to do business with Mr. Wen, and more trade and investment will be top of their agenda when they meet.

But there are others who blame China for the financial crisis. China's become the workshop of the world, exporting far more than it imports. China used those export earnings to buy American debt, which helped fuel the mortgage bubble. And some say the credit crunch (信贷紧缩）.

Timothy Geithner was sworn in this week as America's new Treasury Secretary, he's accused China of currency manipulation that created trade imbalances leading to the financial crisis, though most experts disagree.

"It's much better to believe there's some conspiracy in Beijing to artificially overvalue the Chinese currency so as to make Chinese manufacturers and exporters wildly and unfairly competitive and to put American worker out of business, all that is economic debut?."

But if China is not to blame, how much help can it give Britain? The country has its own money problems, rural poverty, slowing growth and laid-off workers. In this global crisis, many Chinese consumers would be lucky to keep themselves afloat, never mind the world economy. Holly Williams, Sky News, Beijing.