China’s just-so growth no balm for slowdown fears

January 19, 2016

The world’s second-largest economy grew 6.9 pct last year, in line with government targets. The official picture of a gradual slowdown is at odds with market jitters. Yet the numbers do little to ease investors’ key concerns: yuan devaluation and the risk of a messy debt crisis.

Weaker yuan would be no panacea for China Inc

January 14, 2016

A sharp devaluation would yield some winners and losers: machinery-makers would gain and airlines would suffer. But overall this would do little for the real economy. Exports are a declining driver of Chinese growth.

China’s troubles catch Japan off-guard

January 12, 2016

Japan is highly sensitive to its larger neighbour’s economic health. Market turmoil is also strengthening the yen, threatening profit and prices. This could hardly come at a worse time: policymakers already battling deflation and stagnation have few levers left to pull.

An unstable yuan is part of China’s new normal

January 11, 2016

Surprise moves in the currency have left global investors guessing about foreign exchange policy in the People’s Republic. Doubts about the central bank’s ability to manage the exchange rate add to the uncertainty. After years of tight control, instability looks here to stay.

China market confusion has investors fearing worst

January 7, 2016

The tumbling yuan may be a sign the People’s Republic sees currency devaluation as a solution to its economic woes. Or maybe planners are struggling to adapt to more liberal markets. Suspended stocks heighten the sense of chaos. For the rest of the world, the signs are ominous.

China will find schmoozing IMF was the easy bit

November 30, 2015

The yuan has made it into the global lender’s basket of reserve currencies, despite China’s patchy reform record and clumsy market interventions. For Beijing politicians, getting into the IMF’s club is itself a reward. Persuading investors to want more yuan will be tougher.

Yuan’s new global status matters most inside China

November 16, 2015

The renminbi is on the verge of joining the SDR, the International Monetary Fund’s reserve currency club. The symbolic step won’t send foreign investors rushing into yuan assets. But the move endorses China’s recent financial reforms, and makes them harder to reverse.

China’s campaign to stabilise yuan comes at a cost

October 9, 2015

After the shock of August’s mini-devaluation, some calm has returned to the currency. Yet restoring stability required hefty central bank intervention and a crackdown on capital outflows. China is still a long way from letting its exchange rate be set by market forces.

G20’s promise to avoid currency wars is feeble

September 7, 2015

Finance ministers and central bankers from large countries did not ask the United States to delay raising interest rates. They have no other plan to stop capital fleeing China and other emerging economies. That makes their pledge to resist “competitive devaluations” ring hollow.

Impossible trinity gives China a difficult choice

August 26, 2015

Not even the People’s Republic can go on cutting interest rates, keep the yuan stable, and allow capital to flow freely. It must choose two out of three. Huge foreign exchange reserves give Beijing some room to muddle through, but not enough to reverse self-fulfilling outflows.