Last weeks spectacular show of military might to mark Chinas 60th anniversary of Communism was difficult to ignore. Even the Empire State Building basked itself in red for China. This display of strength serves as a marked contrast to the status of many humbled Western governments currently dusting themselves down from the humiliation of the banking crisis.The contrast doesnt stop there. Whereas Western bankers have been vilified and scorned in the wake of the credit crunch, their counterparts in China have been lauded as heroes and guardians of national stability by the ruling Communist party. And while this may go a little too far, the praise for Chinas financial sector originates from the undeniable resilience of the Chinese banking system, compared to the weakened banking sectors of western economies.The most recent banking league tables assert Chinas total dominance over the worlds banking system. The latest FT survey based on market capitalisation, shows that China is home to the worlds three largest banks. The sheer scale of these financial institutions is further emphasised by the fact that the smallest of those three banks, the Bank of China, has a market capitalisation of nearly twice that of HSBC, which sits at fourth place in the global banking league table. And if further evidence of China and Asias existing and likely future dominance of the world economy and banking sector was needed, HSBC recently announced that its CEO, Michel Geoghegan is moving from London to Hong Kong. HSBCs Chairman, Stephen Green, was fairly unequivocal about the reasoning behind it, stating that Asia and China are the centre of [HSBCs] gravity and business.With all this in mind, it seems extraordinary that the recent fanfare made by European and US policymakers on regulatory and supervisory co-ordination - epitomised by the ECs OTC jamboree in Brussels last week - omitted any reference to Asia. That said, in my recent conversations with regulators across Asia, it would appear that there is good reason for Asias current reticence in being drawn into the current regulatory maelstrom. First, as there is no Asia banking crisis to mop up, there is no expediency to act. Second, given the assertive nature of Asian regulators, once regulatory reform has been proposed, it can be implemented almost instantaneously. Third, should regulatory regimes implemented in Western economies suffocate market activity; Asia will be perfectly placed to take advantage of regulatory arbitrage. Finally, there is a belief in Asia that much can be learnt from the mistakes made in Europe and the US. By playing the waiting game, the region can cherry pick the parts of the new Western infrastructure that appear to be operating well. This approach of course, epitomises the cautious culture of Asia, which serves as a stark contrast to the Machiavellian behaviour of Western economies. The irony, of course is that it is Western economies that should be looking to the East to learn about the reasons for success, rather than the East looking to the West for reasons of failure. Herein lays one of the many reasons for the downfall of Western economies: the inability to observe and learn.