It is hard to overestimate the importance of the meeting to China’s near-term and longer-term prospects of the 17th CPC Plenum in two weeks. These meetings, held every five years, are the main events of China’s political cycles and it is during these meetings that the big promotions to senior positions within the Party and, [...]
A savings glut doesn’t mean higher global savings
Sep 25th, 2007
One of the comments on one of my earlier posts had me search out a quote from Steven Roach about there being no growth in global savings to support the global-savings-glut thesis. There were also several interesting comments on the topic following the initial comment. But rather than keep the discussion buried in the comments [...]
Guest blog (2)
Sep 24th, 2007
The Chinese sovereign wealth fund (which, following convention I will call the CIC) is expected to be approved later this month or early October, before the October 15 meeting of the 17th National People’s Congress. Much of its expected structure, however, is known and it has already made one very big and visible investment, the [...]
Guest blog (1)
Sep 22nd, 2007
I am guest-blogging on Brad Setser’s site. This is what I posted today. I apologize if it covers some ground from some of my earlier posts, but I put it up here anyway: Post on Brad Setser’s Blog One of my tricks when I want to look smart on the topic of global financial [...]
What is the PBoC doing to repo rates?
Sep 20th, 2007
Dan Rosen was the first to alert me to the fact that short-term rates in China have soared in recent days. The benchmark rate is the 7-day repo rate, which hit a pre-September high of 4.77% in April. Today, however, it went to 6.69%. The one-year repo rate, which had peaked at 4.45% in April [...]
China and the savings glut
Sep 15th, 2007
On September 11 Ben Bernanke, Chairman of the Federal Reserve, gave a very useful presentation at the Bundesbank Lecture in Berlin. It can be read at , and I strongly recommend that my Peking University students all read it. Bernanke argues, as he has many time before, that the world is experiencing a savings glut. According to [...]
This should be an unnecessary posting, but the topic has become so politicized that it has become hard to discuss without recriminations, and a lot of silly things are being said around it. In the eagerness to assign “blame” for the US-China trade relationship, those in the it-ain’t-China’s-fault camp, and especially the Chinese press, love [...]
Keidel on inflation
Sep 13th, 2007
Albert Keidel (http://www.carnegieendowment.org/files/pb54) has a September 2007 Policy Brief for the Carnegie Endowment on the risks of inflation in China titled “China’s Looming crisis – Inflation Returns”. He argues that China’s economy today looks much as it did before the inflationary catastrophes of 1988-89 and 1993-96, and as in the past, China today faces more than [...]
Pesky school kids
Sep 10th, 2007
From Reuters via today’s South China Morning Post, this article doesn’t need much comment: Officials in Fujian province have told schools to caution students against dabbling in the stock market, warning that failed investments could fuel social instability. Students have followed pensioners, housewives and people from all walks of life into the stock market as [...]
What to do about money?
Sep 7th, 2007
The PBoC has raised minimum reserve requirements for the seventh time this year, after three increases last year, from 12% to 12.5%, which is expected to drain about $25 billion from the banking system (equal, by the way, to a little more than two week’s reserve inflows). In a televised speech two days ago premier Wen Jiabao said [...]
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