SINGAPORE – The talk was about global rebalancing. U.S. President Barack Obama arrived in Asia on his first official tour, talking about a "rare inflection point in history". A time where "we have the opportunity to take a different path." A chance to rebalance the model where Asia consumers consume more and US exporters export more.

Chinese President Hu Jintao was among world leaders at the APEC summit in Singapore.

APEC leaders fully endorsed the strategy; virtually every economy in the world does. But look inside the APEC meeting in Singapore, and see the problems of turning this into reality. One of the biggest may be China.

More than two years ago, China began to allow its currency to appreciate against the dollar. By the time the financial crisis exploded, it had risen in value by about 20 percent. The crisis was the signal for China to freeze the exchange rate there at about 6.83 to the US dollar.

That was a year ago. Even China's Asian trade partners are now worried that the Chinese yuan is undervalued against the sinking dollar. So one of the key issues in Singapore was to put subtle pressure on China to unfreeze its currency.

Finance ministers talked about flexible exchange rates, the APEC leaders were expected to talk to about "market oriented" exchange rates - all aimed at prodding China to become a little more "market oriented" in its own exchange rates.

But by the end of the gathering, all reference to market-oriented exchange rates in the final statement from leaders had been erased. There had been debate behind closed doors between the U.S. and China about the statement. In the end China appears to have won out.

The message seem to be China will move only when its ready. And for all its newfound goodwill and push for re-engagement, there's not much the U.S. can do about that.

I've got my own piece of Berlin Wall stuffed away somewhere in my house. I had borrowed a hammer and chisel from a man at the wall and hacked off my very own piece.

West Berliners crowd in front of the Berlin Wall as they watch East German border guards demolish a section of the wall.

It was a week after "Checkpoint Charlie" - a crossing point between Easy and West Germany - in Berlin had been thrown open, a week after a divided city and a divided Germany were reunited.

I had flown over from London with friends for a first-hand view of history. We arrived late on a snowy Friday evening, found a cheap place to stay and headed out into the night. Every bar, every cafe was packed with exuberant West Germans and uncertain East Germans. But everywhere we went, the air of German brother/sisterhood was palpable. Everyone was so positive. We were all Germans, they told us. It would be a seamless unification. Only a few people voiced their concern about how exactly this would work.

We stayed up all night, drinking and talking to Germans. In the morning we headed for the checkpoint ourselves. It was packed with people; all along the wall people were busy trying to knock it down. One other snapshot that still stays with me is the East Germans pulling overloaded shopping baskets full of consumer goods back across the dividing zone to their homes. Little things like washing up trays for the kitchen sink, boot polish, soft drinks. Anything, as long as it wasn't made in the German Democratic Republic.

We snatched a few hours sleep that afternoon and went back out into the night to join the party. The feeling of optimism was still burning.

Well, as history shows, reunification turned out to be much harder, more expensive and longer than anyone could have seen. A few months after the wall came down I visited the former East Germany working on a story about East Germany Inc. being up for sale. An enormous firesale of outdated factories and machinery. Buyers were only interested in the property, and as long as they could get rid of most of the workforce.

Fast forward to today. Think of another communist economy. And think of the difference. This economy is leading the world out of recession, this economy is, at the moment, one of the great hopes for global economic growth, this economy now lectures the U.S. on economic policy. This economy is China. Two decades ago this day, East German communism was finally put to rest. In China, it's going from strength to strength.

HONG KONG, China - "Asia's astonishing rebound", says the front cover in today's edition of The Economist newspaper (yes, they call it a newspaper). It is astonishing, too, when you look at the headline economic numbers coming out of the region at the moment.

Asia’s steady rise: Can it continue without consumers in the U.S. and Europe increasing their spending?

Take second-quarter economic growth for example: China up 7.9 percent, Hong Kong up 3.3 percent, South Korea up 2.3 percent, and even poor, lumbering out-of-shape Japan is expected to break its 18-month recession on Monday with Q2 growth of 1 percent. In Europe, recession is ending, too. But look at the numbers. Germany and France can manage growth of just 0.3 percent in the second quarter; Britain and Spain are still in recession.

Why? Why are these export-driven Asian economies leading the global recovery, when their key markets are still only now just stirring after the knockdown punch of the global crisis of late last year?

In a word: stimulus. It's not just China's $585 billion funneling into the economy; it's also Japan's $150 billion, and South Korea and Hong Kong's $11 billion apiece. Tax breaks, enormous investment projects, and government-funded property incentives all helped to keep the Asian consumer afloat, and generate economic growth. Restocking in the United States and Europe also helped, as companies broke from their deep-freeze and started building up inventories.

But. ... and there is a big one here: In its current form it's not sustainable. Asian policy-makers have done a remarkable job lifting economic growth out of the gutter, but until the real engines of global growth get off the ropes, the Asian rebound isn’t going to go anywhere.

What's needed is strong, sustained demand from consumers in the U.S., Europe AND Asia. It's starting in Asia, but this is still an export-focused region.

Glenn Maguire, chief economist at Soc-Gen, says it will be decades before Asian economies have rebalanced so that domestic demand can keep economies growth healthy by itself. And here's a clear statistic to back that up: Maguire says the U.S. consumer market in 2007 was about $10 trillion. China, by contrast, was $1 trillion. Even taking into account the rest of Asia (except Japan) but including India it comes to about $2 trillion. Some other estimates put the total at $4 trillion, but you can see Asia is still a long way behind.

It's a given that the U.S. consumer has changed his/her buying habits. Job security and rock-bottom home values and big, big personal debts will do that. It will be a long time, perhaps many years if ever, before the U.S. consumer, or for the matter the European consumer, is prepared to go on the sort of buying binge we've seen build up during the past two decades.

That means lower economic growth, for all of us, for a long time to come.

If it looks like a duck and sounds like a duck it's probably a duck, right? Wrong. Just ask the Rolls-Royce motor company. It is mightily unimpressed by a concept car produced by Chinese carmaker Geely, on display for the first time at this year's Shanghai auto show.

At first glance you can see why.

Chinese automaker Geely unveiled its GE in Shanghai.

Geely has produced the GE which looks uncannily like the Rolls-Royce Phantom: from the iconic bonnet (hood) ornament - the Spirit of Ecstasy - to the stately and equally recognizable grille. Even the rear end tapers in on the Geely.

Now you may have expected Rolls to shrug it off, to look down its aristocratic nose and smile benevolently at an upstart paying it a sort of back-handed compliment.

Absolutely not. In the whispering, highly refined world of top-end luxury marques, Rolls was pulling no punches.

"Yes, I've had a good look at it," said Richard Carter, head of worldwide communications for the fabled British carmaker, now owned by BMW.

"It's a copy and we are frankly disappointed with Geely."

Geely's response is to say it's absolutely not a copy. It's an entirely original design, and what's more they really don't want to get into a discussion about it.

Take a look at the pictures and decide for yourself.

Copying is nothing new in the auto industry. The Japanese did it, the Koreans did it and the Chinese are now doing it, said Michael Dunne of auto research house, JD Power.

It's a long-standing joke in the auto industry that R&D stands not for Research and Design, but Receive and Duplicate.

But why is Rolls-Royce so sensitive? After all, it's not likely anyone will buy a Geely GE (if it ever makes it to production) in the mistaken belief it's a Roller. And Rolls-Royce says it can't imagine the car, even if it were in production, having an impact on its own profits.

What Rolls' action does show, according to Dunne, is just how concerned the global auto industry is by the imminent arrival of China on the world stage.

He added that it will take perhaps three to five years for China to start competing against the likes of the mass-produced family cars from Europe, Japan and Korea. It will take longer at the luxury end.

But in the meantime the non-Chinese automakers are sending a message to China that it cannot take anything for granted as it makes its way up the value chain.

It's a tough industry, especially in these times, and no one is going to get a free ride.

Rolls-Royce, quite understandably, defends its reputation vigorously against anyone who uses its designs without asking. This is no exception.

The question, though, is what can Rolls-Royce actually do about it.

"Western auto makers have taken Chinese carmakers to court in the past over what they see as major copyright infringements, but so far they have never won a case," said Dunne.

But, if the reaction of Rolls-Royce, is anything to go by they are not going to stop trying.

HONG KONG, China – "A non-perfect plan is better than no plan at all." So said International Monetary Fund chief Dominique Strauss-Khan in a recent interview. He was talking about the amended and reworked bailout plan going before the U.S. Senate.

But even if the plan is perfection itself, and the credit markets start trusting and loving each other again, we are not out of the woods. Not by a long shot. We then come to the next depressing piece of news: the real economy.

Take a look at this number. It was lost in the hullaballoo of the Dow's rise and bailout hopes yesterday. U.S. house prices in July were 16.3 percent lower than they were in July of last year. And house prices are also falling faster. The much-watched Case-Shiller home index, released by Standard and Poor's, reported the price of a home in the 20-city nationwide index fell 0.9 percent in July, compared with an 0.5 percent fall in June.

Overall prices are are now about 20 percent down from their peak in July 2006. And the really bad news is that many economists now say the fall may not stop until mid-2010.

That could be as much as another 20 months of falling home values, assuming the financial crisis is solved sooner rather than later. And that's the problem. The millions of U.S. homeowners were the backbone of the consumer spending boom that led U.S. economic growth. They're now AWOL. They aren't spending because not only is the value of their biggest asset disappearing before their eyes, they are also worrying increasingly about their jobs and their mortgage rate. Who's going to buy a new car with that in the back of their mind?

And there's no one else to pick up the spending mantle. We've seen the government attempt to kick-start the economy with a tax rebate a little earlier this year. That boost lasted all of a few weeks.

So bring on the bailout. It's just the start of a long and painful road to get the world's biggest economy back on track.

HONG KONG, China - You know what? At the risk of sounding like true believer, I think the credit crisis may actually be coming to an end.

The wild fluctuations on Wall Street left many traders scratching their heads this past week.

Most people are saying it's far too early to call but look at it this way.

The credit crunch, as distinct from the U.S. economic slowdown, is happening largely because banks have been too scared to do their jobs ... lend to other each other. If they aren't doing that the flow of money circulating around the financial world is being cut off. We saw that happening this week.

The banks are afraid that the other party they are lending to may be riddled with the so-called "toxic holding," and be about to go under.

So what's the likely solution?  Take away all that toxic stuff. Actually buy it from the banks. After that, the banks can get back to basics, safe in the knowledge that they aren't doing business with an institution stuffed full of the ticking time bombs of property-backed financial instruments. No wonder stocks of investment banks around the world are having record one-day rises.

So ... who's the loser? Well, I'm glad I'm not a U.S. taxpayer. The estimates of exactly how much toxic stuff there is vary from tens of billions to hundreds of billions, even trillions. All of which will be bought by the U.S. government (i.e., U.S. the taxpayer).

They've done it before. In the 1980s the U.S. government bailed out the savings and loans companies who had hopelessly - and in some cases fraudulently - mismanaged their operations. That cost the U.S. taxpayer about $120 billion. That's nothing compared with what this one could be. Did the US government have a choice? Unfortunately, we will never know. They clearly thought they did not.

And that leaves the banks getting a giant get-out-of-jail card, and the poor U.S. taxpayer cleaning up the mess. Again.