In casting about for a decent topic of the day, I found that Bill D has a new domain, http://thisischinablog.com/
One of my failings is that I do not search the English China-Web, and do not run through a list of good sites regularly, which I should. I believe I mentioned before somewhere or another, I just came late to the China blogosphere as a reader, and am much more stuck in the US liberal blog-world, or whatever its called. The echo chamber perhaps.
Anyway, I thought I spied a likely target: A post about the WSJ talking China finance. But I found the WSJ piece fairly lacking in teeth, having been written by a (presumably left-wing and socialist) professor instead of one of the many ideologues (wingnut welfare personified) skipping about over there.
The takeaway that I like in the piece is:
Capital account convertibility for the yuan would subject Beijing’s policies to the judgments of individual investors at home and abroad capable of contributing to large capital flows, including highly temporary and speculative gushes. It would put China’s economy much more at the mercy of global financial forces.
Which really means subjecting China’s assets to the whims of unregulated hedge funds, sovereign wealth funds, and the like. I love the ‘individual’ stuck in there, so disarming. These predatory institutions, rationalized by a failed ideology, look for profit wherever they can and care nothing for the social, economic and political fallout that results.
Bill, with his long memory, comments:
Mind you, it’s understandable after the Asian Financial Crisis of 1997 that the powers that be do not want to expose the yuan to Homerian struggles. Hong Kong, though…
Remember all the lectures from quarters such as the WSJ to China about its currency? And yet, while steadily ignoring all the advice, China has managed to maintain a stable currency for over a decade now. Indeed, over the past eight years, China has done a much better job than the US about managing its currency. Funny how that worked out, isn’t it?
I left that little snippet about Hong Kong in Bill’s quote to remind me of something: Does anyone remember the role that hedge funds played in fomenting the 97 crisis? Well, they attacked Hong Kong’s currency and stock market at one point, and were beat off by the Mainland.
Beijing knows all about the games. However, I am surprised to note that the WSJ piece is pretty good, and makes some solid points on the continuing integration of China’s economy into the global economy, which I believe to be inevitable, for a variety of reasons that will not be presented today.