Yesterday, U.S. Treasury secretary Timothy Geithner spoke by phone with his Chinese counterpart, Vice Premier Wang Qishan, to discuss the challenges facing global markets after a tumultuous week for the U.S. economy. China's stock market plunged on Monday (along with the U.S.'s), following the news that Standard and Poor downgraded America's credit rating. Chinese investors are concerned that the current poor economic climate in the U.S. will lead to decreased demand for Chinese exports. China is the largest U.S. foreign creditor, but over the weekend on Chinese websites many people were calling for China to invest less money in the U.S.
Niall Ferguson is the Laurence A. Tisch professor of history at Harvard University, William Ziegler professor at Harvard Business School, and author of "The Ascent of Money: A Financial History of the World" and the forthcoming "Civilization: The West and the Rest." He talks about how what role China will play in the U.S.'s economic recovery and whether this is a turning point in world financial history.