IU: Do you have a sense of how much manufacturing will grow in the future?

Adams: Estimates tend to be all over the map. In fact, some people are estimating that overall GDP growth will finish in 2009 at closer to 3%. Of course, we think it's going to be higher. So there's still a big question mark surrounding both China's manufacturing sector as well as the country as a whole. Nobody can get their arms around how much the U.S. slowdown will impact Asia in the coming year. The tide is clearly still moving away from shore, and it's not easy to determine at this point how far it will keep going out.

IU: What's the good news then?

Adams: Again, as noted earlier, China still has over $2 trillion in reserves. The stimulus package they've announced on a relative basis is four times what we've done so far to spur our economy in the U.S. And that's only counting China's plans for its first set of stimulus programs.

You've also got to remember that the Chinese consumer isn't like those in the U.S. People over there still are saving about a third of their income. When they buy cars, they usually pay cash. And for home financing, they almost always put down 30% or more.

The bottom line is that we're buying bad loans while they've already started to rebuild their economy. So they haven't had to backstop losses before moving forward. That's a huge advantage in such uncertain times.

IU: Is China's growth story gaining more viability with foreign investors despite a slowdown in economic fortunes?

Adams: Absolutely. The Chinese business model is looking a little bit better every time we're forced to bail out another company and industry in the U.S. We've seen a lot of comments recently in the media by economists and other financial experts about how the U.S. and China seem to be moving in opposite directions from an economic development standpoint.

In the U.S., the government seems to be getting its hands involved in more and more private companies. At the same time, China is continuing to privatize its whole economy. The Chinese government still owns most of the bigger companies. But they've sold a lot off and have let foreign investors in.

So we believe China is moving towards striking more of a balance between private and public corporate ownership. But it's going to take time and isn't going to happen overnight. The Chinese tend to move very slowly and cautiously.

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