Thanks for the article, Mish. He has a good take on what is happening in China. When most of western media talks about China wants to slow down its economy, they fail to mention that China only wants to slow down in those over-heating sectors (like fixed asset, especially real estate sector, steel industry, as well as some other heavy industries). China does not intend to slow down in other sectors that grow normally or not enough (like service sector, bio-tech, agriculture, etc.). So one should not look at the general growth rate and say China has failed to slow down. They should look at sector by sector in order to tell whether the macro management has been a success or not.
One thing China has learned from 1993 boom-bust cycle is that the economy in China is dynamic and complicated, and there is NO any one-size-fits-all approach. The macro management taken in 1993 was too simple and one-sided, so the economy had a hard landing (the official GDP growth rate was definitely overstated for those couple of years). This time China is trying to avoid that.
As for RMB revalue, I think China is basically ready, but has to wait for the right moment, i.e. the hot money withdraws. And someone speculates that China wants to burn speculators so bad that they would never come back<g>
>>always think stability when it comes to China -- whether the issue is economic or geopolitical. <<
This is only true under most circumstances. Taiwan (as well as the US and Japan) should not get a wrong message from that, since China will risk anything to keep its territory intact. |
