Despite widespread speculation that China’s economy is in crisis and that the recent devaluation of the yuan represents a desperate attempt by the authorities to revive export-led growth, the Telegraph’s Ambrose Evans-Pritchard says the country’s nationalized big banks, regulated financial system, and massive capital account surplus will easily allow it to weather the storm as it has in the past.
“At the risk of sticking my neck out, I think that Gothic warnings of a Chinese collapse this year will look silly by Christmas…The ‘devaluation' saga this month is a red herring. The PBOC has switched from a dollar peg to a ‘managed float’ to protect itself from any further surge in the US dollar as the Fed tightens policy.” The IMF shares Evans-Pritchard’s view of the devaluation as a positive step towards a market-based exchange rate rather than a competitive devaluation aimed at rival exporting nations (http://www.bloomberg.com/news/articles/2015-08-15/imf-calls-china-s-yuan-moves-welcome-step-to-more-flexible-rate). Full: http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/11810420/Chinas-August-scare-is-a-false-alarm-as-fiscal-crunch-fades.html _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
