Richard: thanks for posting that Wall Street Journal article. It is a fairly long article, however, it failed to mention about what is the beneficiary for China to devalue Yuan, or Hong Kong to delink the peg. I read somewhere there is only around 20% overlapped export industries between China and SE Asian countries. So even if China does devalue, it will mainly help only those 20% or so export industries. It will do more harm than good to the China's economy as a whole.
Now about Hong Kong economy, I think at least 70%, if not higher, of Hong Kong industry is in service sector. So can this service sector be helped by delinking peg? I don't think so.
When Westerners, or even some Chinese themselves, talk about China/Chinese fear losing face, they oftentimes forget China/Chinese are much more likely being practical than fearing losing face. If it is really good for the Chinese economy or the people, they will do it even if they shall lose face.
Best |
