But is China that intent on restraining asset bubbles?
At about the same time, the government announced that it moving to allow greater leverage for stock market players:
The government said it had approved, “in principle,” the creation of stock index futures, trading on margin and short selling, investment tools that are commonly used in New York, Chicago, London and many other financial markets, according to Xinhua, China’s state run news agency.
Is this just a case of poor policy coordination? Or something else?
For the intermediate term (3-5 years), I believe that the Chinese growth story remains intact. Tom Friedman is right: Never short a country with $2 trillion in foreign currency reserves (at least for the time being.)
2 comments:
great ...........................................................
What was the United States account surplus in 1930? What percentage of the world's gold did it own then?
What about Japan in 1989? How much did in foreign assets did it have before its great bubble popped?
I don't think the future of China will unfold like either of these two scenarios, but the future is precarious for both China and the US. My prediction is for bumpy development at best, with a serious risk of escalating global tensions and economic de-globalization.
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