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Current financial crises in United States indicate the vulnerability of its economy on the whims of capital scarcity. China’s surplus wealth in capital market is harbinger of hope to bring stability in US economy. Although China is feeling the heat of crisis on account of its heavy investment in American capital markets. It may motivate China to look for other currencies (avenues) of investment. As US economy is underperforming in productive sector, world is concerned on its ramifications for world economy. This article is aimed to identify the reasons for financial instability in United States. It will also highlight the impact of these crises for China.