By Zarathustra, the founder of Hong Kong blog Also sprach Analyst. He was educated at the London School of Economics and the Chinese University of Hong Kong and was once a Hong Kong-based equity research analyst focusing on Hong Kong real estate (which he did not really like), with a secondary coverage on China real estate sector (which he actually hated). Cross posted from MacroBusiness
Let’s face it, China is manipulating its currency. You can call it whatever you want, but China is manipulating its currency.
As part of its trade policy, China has been trying to prevent they Yuan from appreciating quickly. They have also taken the lesson from 1985 Plaza Accord in which the US and others forced Japan to float Yen, and are quite determined not to repeat that. Of course, that did not help with the US’s trade deficit, and Japan is still running trade surpluses two and a half decades later.
Even though the consensus seems to have ruled out a hard landing in China, and that the consensus seems to believe the yuan is a one way bet upward, it is always good to ask the question of whether something opposite can happen when the consensus is leaning to one extreme.
The fact about monetary policy is that you cannot have all of the following three things at the same time:
1. Fixed exchange rate
2. Absence of capital controls
3. Independent monetary policy
China is attempting to do all three, but cannot reallyaccomplish all three things in full. It has a sort of fixed exchange rate with a moving target. It has some capital controls (for instance, capital is easier to be getting into the country than out). And its monetary policy seems to be independent, but in reality isn’t.
Because of the allegedly undervalued yuan, China has been running a persistent trade surplus. And because of its capital control which favours in-flow and limits out-flow, it also has surpluses in the capital account. As a result, we seem to always have too much money sloshing around in China, and the growth of its money supply makes the effect of quantitative easing in the United States looks insignificant (that also means that China has to intervene in the market by buying foreign currencies and assets, and hence the large foreign exchange reserve). That’s particularly true when the $US weakens. As I have shown previously, even though Chinese Yuan has been creeping higher against the $US dollar, it has not appreciated against many other currencies.
There are two questions here. The first is what if the $US strengthens? This remains a contentious issue here among investors, with many still convinced that $US will become toilet paper. But if $US strengthens against all other major currencies, and if the Chinese wants to keep that peg with $US dollar, it means that they have to allow the yuan to appreciate against all other currencies. Chinese exporters will not like it, and not only that. Strengthening of the $US will bias the monetary policy of China towards the tightening side.
The second question is that in the face of a potential hard landing, how will the People’s Bank of China respond though monetary policy? As mentioned above, the monetary policy of China is not 100% controllable in the hands of the PBOC because the currency peg would impose some limits as to how much easing or tightening PBOC can actually do (although we cannot be sure exactly where the limitations are). If the Chinese economy entered into a hard landing and a massive monetary stimulus is required, my conjecture is that there might be a possibility (not high for the moment) that China could hit the limit of monetary easing if things get too bad and the peg with $US is maintained. In that scenario (the probability does not look very high at the moment), China would have to make the currency fully convertible in order to perform completely independent monetary policy. And if they float their currency during the bad times, the outcome would probably be exactly opposite what the West has been hoping for. It will not go up, but go down. In fact, China would want to see depreciation of its currency in the even of hard landing. Which may help explain why the yuan forwards market is currently pricing depreciation not appreciation.
I have to stress that the probability of this happening is remote, and it’s a contentious argument. But the key point is that when China finally does float its currency, the outcome might surprise everyone. For investors who are betting on the long-term appreciation story of the yuan, it would be best if you are aware of the risk. And for politicians in the United States, forcing China to float its currency does not guarantee the outcome you want.
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how can they have a capital account surplus and a trade surplus? do they have huge factor payment and transfer payment deficits? if so, that would seem to be the real story behind china.
nope, i looked up the current account in the cia factbook. china does indeed have a current account surplus. somebody needs to take basic accounting into account when they make an argument.
We are entering final stages of great unravelling. The rulers of western kleptocracy are determined to pull everyone down including China.
In a fiat money system every currency is manipulated. ZIRP and QE policies are ultimate Ponzi style monetary manipulation. They will do everything to divert attention from the real causes of ongoing disaster.
We have less than 5 years to the endgame.
I’m glad I’m not the only one thinking it’s a bit hypocritical to call out China when basically the Fed is and has been doing the same thing(insofar as manipulating our currency.) It’s not like flooding the market with dollars doesn’t weaken the dollar.
Then again we do love to wag our fingers at people and insist they act in our interest(even if their responsibility is first and foremost to their own country;just like our government is SUPPOSED TO BE putting our interests over other countries.)
LOL, fiat? The Gold Standard was so manipulated, nobody followed it………to they could make money off of it. 1907 was the tops.
What a dumb post. China deserves the blame it gets. The US has the right and power to completely destroy and halve China’s population in half.
Heh, because our “plan” to destroy folks we disagree with so far is going swimmingly.
I definitely agree that we should be looking carefully at rewriting our trade deals but making this good versus evil is dumb.
No need to be violent.
Just don’t buy their stuff if you don’t like them.
Hi,
You need to incorporate the great China subprime-mall-and-useless-business-real-estate bubble into the loop. That is the massive over-building with use in sight. Why should we call it a subprime-like development?
Because of the way it has been financed since the time the government started to engineer an accross-the-board tightening. Via non-bank entities.
Patrick CHOVANEC – who by the way has been in China for quite a long period of time – has been instrumental in tackling the issue in his recent postings.
Patrick has been trying to grasp the whole picture, including the recent growing risky role of non-bank institutions, in a great way.
Plain and simple conclusion:
1- THE YUAN IS EXTERNALLY ROBUST,
2- INTERNALLY IT IS AS ROBUST AS ITS CREDIT-AND-BANKING SYSTEM AND INSTITUTIONS IE EXTREMELY WEAK. IT COULD NOT EVEN STAND AGAINST REAL POSITIVE RATES ON SAVINGS.
In such a scenario, calling on the Chinese authorities for a voluntary revaluation of the yuan is at best badly timed.
A currency spoiled on massive negative-value-building over-investment is not a robust currency at this stage. These kind of currency never is…
The US will to find other ways to handle the situation…
Zarathustra does not understand the basis for China’s economic policy, which is warfare, not welfare. China will keep its currency weak relative to the USD. It will continue to exchange shoddy goods for treasury bonds (an exchange of drek if there ever was one) and use its power in the US bond market to lever ever increasing control of vital defense technologies it could not develop internally in 200 years. Everything else is opera.
As for speculation in the Yuan, there isn’t anything you can buy with it except empty malls and overbuilt condos. This post epitomizes economic intelligence as an oxymoron. Nietsche is peachy but Freud I avoid.
Jake, the China becoming the world reserve currency is a feature, not s bug. The accelerated schedule of both Western and Eastern financeers did not factor in greed of rulers or the faster rate of business due to the Internet. What has been created is a Frankenstein monster the entire world will regret creating. I wish the Chinese people well but the long-term relationship with China is like a love-hate marriage.
The Chinese won’t get what they expect in terms of value that the currency peg prize usually represents. It all comes down to investor confidence and harmonization of cultures between East and West is still a few decades off.
Jack Chase is correct. China is our enemy and has been so since the Opium Wars. The Hainan Island incident should have woken Bush up. But with the brains of the neo-cons and the morals of Prescott Bush they raided the hen house. And our participation in the building and arming of China put the Marshall Plan in the shade. This Yuan bill pushed by Schumer and Graham is the first really proactive move toward China si
since 9/11.
“The fact about monetary policy is that you cannot have all of the following three things at the same time:
1. Fixed exchange rate
2. Absence of capital controls
3. Independent monetary policy”
Zarathustra is correct. But in China’s case I believe that it wants to negate 2 and 3. (having capital controls and
non-independent monetary policy) and if my logic is correct, it then cannot negate 1.
And just by this logic the Yuan Bill has the Chinese by the short hairs.
But if I understand Schumer-Graham’s purpose, it is not to have a free floating Yuan (though it might look that way) but to seize control of the level is where it is fixed. If we do do this then faced with the flood of goods that China needs flood other markets with, most other economies needs follow suit.
And it is ironically enough both Marxian (exploited the economic contradictions in Cina) and applying tai chi principles (using the enemies actions to defeat him)
Please list country’s China has invaded in the last 200 yr vs. the west.
Skippy…good / bad…. republican / democrat… infini lol.
That’s the problem with our foreign policy is that we put countries in little boxes. Friend or enemy rather than just acknowledging that sometimes countries have mutual interests and other times they have conflicting interests and that these interests(both theirs and ours) are going to evolve over time.
The idea that a country like Pakistan was ever our “friend” is just downright stupid. It’s much more honest to suggest we economically incentivized their behavior. Likewise our behavior towards China(especially in regards to Taiwan) or Saudi is often based on the economic consequences of “not being friends” and the impact that would have on our economy. Why we have to make every decision so personal is beyond me.
China would appear to have two Magic Lamps it can rub; MMT government spending and a currency rigging formula. The former may prop up debt defaulting state industry but hey when you are expanding your GDP at an average rate of 10% a year and sucking in all that greedy capitalist know-how including that relating to military technology you are happily on the road to world domination and a little market inefficiency can be tolerated.
How fast can China retool their manufacturing for internal consumption should consumption in the West collapse?
>frobn They don’t have to “retool” their manufacturing for domestic comsuption. All they need to do is increase wages.
And when you see an official announcement to that effect from an apparently 3rd rank or lower apparatchik on CCTV, pay attention. That’s when the real game begins.
(I prefer to follow their 5 and 20 year plans myself. Imo, they give you a better idea of where the money – and resources, are going – space stations to rival the ISS not withstanding …)
Skippy
If you study “The Art of War” you will realize that the Texas football based attitude is American. Not Chinese.
That kind of waste of resources is the last thing Master Sun would advocate. Instead China did use proxies in Indo-China and Korea. Only when threatened by having MacArthur camped on the Yalu did China invade Korea to directly confront us and arguably invade territory now controlled by the west.
But it did invade Tibet, Eastern Turkistan and would have invaded Taiwan if not blocked by us.
Spheres of influence vs. global projection. Any who, the list is still very loop sided.
Skippy…BTW the Chinese crated the world largest fleet, till was it D-Day? The came home and closed the doors for a wee bit, can’t say the same for the west. The world we live in is a creation of the west and not east, pick your poison…eh.
PS. not a real fan of either at the moment, just saying.
I agree that the Yuan would tank if it were currently floating since it appears that China is in fact in the beginning stages of a decline that will lead to a Chinese recession within 6 to 12 months. I don’t care how much of a surplus China has to supposedly address the souring debt, it’s going to get real ugly over there. No entity (public or private) can experience the level of mal-investment that China has over the last 5 years. Couple that deteriorating mal-investment with a world wide decline in consumption (demand) and you can clearly see the toxic cocktail that will soon be served up in the Mainland.
On the issue of currency manipulation. So what. Every country does it. We, The US, is the worst offender. The Democrats, led by Chucky, have to have someone to blame for the bad trade policies that they have put in place.
The average American doesn’t have a clue (and I’m no expert) about the complexities of foreign trade and “free trade”. It is however easy for a politician to blame our current economic woes on the Chinese since everyone knows that they manufacture (almost) everything we use here in the US and those bad guy’s stole all of our job’s. China hasn’t stolen anything. China has merely reacted to the policies that our so called leaders have put in place. Our current US trade policies are in place for two reasons and two reasons only. One to benefit the corporate financier and secondly to benefit corporate Americas high level management & their boards. The American business leaders have consciously traded American jobs and US public prosperity for Corporate expansion and greed.
So shut up and either sleep in the bed you have made “Chucky and the trade gang” or for once, put the people of America first and legislate your policies so they directly benefit.
“two reasons and two reasons only”. It is convenient to lay total blame on corporations, but it is much more complicated than that.
How about the US consumer? At first, the growth of Walmart rocketed due to their huge retail competitive advantage from lower cost of goods. Today it has morphed into an absolute necessity to have low cost of goods and prices to survive for all retailers.
The America consumer began making a choice for cheaper imported goods versus more expensive American made products decaces ago. We are now facing the unpleasant consequences of this collective choice – outsourcing, unemployment, declining industrial sectors, trade imbalances, etc.
How about a US trade policy mired in a Marshal Plan mentality that seems almost purposely designed to destroy the American economy?
Not all people migrate to the lowest price for goods. If so there would only be Walmart and no Nordstoms or Sachs. The citizens who migrated to the WalMarts are the citizens who were and are so unjustly impacted by the decisions our lawmakers have made. They have no other choice. I’m not an anti-corporate person and I believe in free markets. I’m not placing the blame solely on the corporations. Again, all players are merely operating in the environment that our lawmakers have provided.
What I can’t understand is how our government didn’t foresee what the impact on American jobs would be back in the 1990’s when these free trade laws were enacted. They had to have known full well that any large Corporation would jump at the idea of being able to build a factory in a country that pays their employees pennies compared to what they have to pay someone in the US or just abandon their manufacturing facilities and let someone else produce the good at an incredibly lower cost. It doesn’t take a rocket scientist to have the vision to foresee this outcome.
Furthermore we haven’t even discussed the fact that our American Corporations have placed us in the situation wherein we may not ever be able to re-grow our manufacturing capacity because they have given all of our technological advances directly to the Chinese. America could have very well controlled the power they have given the Chinese. The Chinese didn’t come up with the technological know how that they posses on their own. That’s impossible.
My point is that America is reaping what our lawmakers have sewn. We have sat back and allowed our factories to close while not putting enough effort into developing what business will replace those jobs and at the same time we have grown our government immensely while our lawmakers have put forth more restrictions and rules that make operating a business in the US more difficult than in any other period in American history.
Sadly, I think we’ll see more and more Americans leaving America in pursuit of the American dream in other countries. The US knows this and are currently setting up policies that will make expatriating very difficult for Americans. The equation for success in America is not functional anymore.
You can’t decrease jobs and decrease annual incomes while at the same time keep all other prices of goods and services at elevated levels. Especially medical, financial (including insurance), educational and taxes. Do you realize the trillions of dollars that would be available for investment by lowering these costs alone? Guess what, one quickly realizes that our Government highly regulates the industries of each of these industries.
Anyway, People will either leave or you will see a rise in crime and general social unrest if the Obama’s, Geithner’s, Bernanke’s, Greenspan’s and Summer’s stay in power.
It is the decisions of these people who have made all but impossible for goods and services to deflate when you don’t allow for the clearing of all the bad debt in America. It was a GRAVE mistake for our leaders to place the banking system ahead of it’s citizens. It is the debt itself that falsely forced all prices up over the last 30 to 40 years. Please place an emphasis of falsely.
About those free trade laws of the 1990’s, look for more of them to come soon, like the ‘free trade pact’ with Korea.
I saw an interveiw on Democracy Now last night where someone at New York’s Liberty Square say it would require Korea to ban regulations of derivatives.
The government DID think of it. The breaking of American industry in order to break American industrial unions, the spreading poverty all over America as the outsourcing bussiness worked the differential conditions arbitrage rackets to their own social class benefit, etc. are the outcomes which the upper class front government sought on purpose through the weapon of Free Trade. Free Trade was always intended as a social upper class weapon of economic aggression to be directed against the American people.
The results you see are exactly the results which Reagan, Bush, Clinton, and their rich owners and backers wanted in the first place.
collective choice
Does not compute.
No. The American Businessman decided that the goods he would provide through his retail chains would be increasingly shoddy American goods or imported slave labor goods. I have not had the opportunity to buy a new, high quality American made item in quite some time. TV? Curtis Mathes was the last. Stereo? slave laborers made Steve Jobs wealthy. Home appliances? GE has stripped its devices down to firebomb levels of safety-you can buy whirlpool/maytag/roper, but how many of those durable goods can you buy in a year?
As long as we are racing to the bottom the American Businessman will provide slave labor goods from around the globe.
I thought that China’s holding down it’s currency was not necessarily a bad thing for US. I mean the trade deficit is exactly equal to our capital surplus- that means more investment here at lower rates, right. Or if they use the money elsewhere (to buy Oil etc) and never bring it back we basically got stuff for free- aka trading iPads for green paper with dead presidents on it…that either never comes back (costs us nothing) or comes back as investment.
What am I missing?
Sounds like a perpetual motion machine.
Anybody read “The Way Forward…” published two days ago by the New America Foundation? Among the solutions to currency questions (a new global currency) and the movement of money is a new kind of world bank mandate which directly (how?) addresses the problem of deficit nations which need money to keep the system flowing. Taking money from the surplus nations and giving it to the deficit nations? I wish someone would comment on what a more permanent solution might be than just interminable currency wars. It is too mind boggling to even try to understand how each nation tweaks their currency, or for that matter how the value of any currency is ever established in the first place.
Oh No! and A ha all in the same breath. It is the derivatives market stupid. That’s the new monetary system. Of course. The planet needs assurance if not insurance. So if 600 Trillion is the required sum to insure everyone against their bad capitalist bets, then of course this sum can be distilled into its essence, many trillions less, and become a new world bank.
Good post. However, I do think the chances of floating Yuan depreciating in value are much better than remote.
It is still comical to me that a group of Top Men believe they can determine the proper relative value of a currency. The Fatal Conceit is not a movie.
China will hold the peg until they have bought Alberta. I figure Alberta will cost China somewhere between 7 and 10 trillion in cash (US Treasuries),* so look for China to hold the peg for at least another half decade.
Note: If China continues to grow at it’s current pace, they will need to import 40 to 50 million barrels of oil, per day, in the year 2020. You read that figure right. 40 to 50 million, or more than half the current world supply of oil — and more than 3 times the amount of oil the current Big Dog, the USA (soon to be a Chihuahua), imports every year.
If you are reading a peg article and run across words like “import/export sector,” or “Chinese markets,” or “coastal elites,” or “revolutionary pressures,” etc., and you don’t run across the word “oil,” then the author is either blowing smoke up your ass, or they don’t know what they’re talking about.
This is about oil. This is also NOT about “commodities,” or “raw materials.” This is about oil. If you are the Grand Poobah of China, and you are not thinking about your county’s future oil needs, morning, noon, and night (and having ghoulish nightmares about them, when you are asleep), then you should be shot, and replaced, because you are either an incompetent moron, or a traitor.
*Buying off the Cheap Whores of the East (i.e. the politicians in Ottawa and Washington) will cost China only a few billion. The Big Money, the “real” money, the trillions, will be spent on the actual physical stuff out west.
I’ve heard that Vancouver BC is another China. Have the Chinese already bought up British Columbia? Actually, I don’t even care. Just curious. So… instead of the pipeline going to Houston, it will go to Vancouver?
Good. If we can keep the pipeline out of America, maybe it will go to Vancouver. Canada will make the money until pipeline ruptures and the transformation of Tar Sandistan into a sterile strip-mined asteroid-scape make Canada wonder whether it was such a good deal.
Better for Canada to run the experiment than for America to be forced to run it.
They did try to buy into Libya.
Maybe better luck next time with Nigeria.
The cheapest option could be to buy off/into Vietnam in the South China Sea. But they will have to be polite and nice first to their ‘little brothers.’
And no, Afganistan is taken. Forgettaboutit! The Emperor has spoken.
Maybe Venezuela and Iran.
A short history of the conflicts in which the PRC has engaged since its founding:
1949, 1954-1955, 1958 Taiwan and the Taiwan Straits
1950 Invasion of Tibet
1950-1953 Korean War
1962 Sino-Indian War
1969 Sino-Soviet Border Conflict
1979 Sino-Vietnamese War
The Korean War and the Sino-Soviet conflict were especially dicey since both had the possibility of going nuclear.
This might only have to do with the Yuan as it has to do with the Dollar, but the Vietnam war was never about Vietnam. It was about China. And China certainly knew it. Because we did. It was more about southern China (especially the mineral rich Shan States, and Hong Kong) than China proper or Tibet. But we used all sorts of excuses. Why does China terrify both the US and Russia? Because it has such a huge population. The Russians have literally cajoled and bribed other nations but up until now they have only used their 12-foot-pole with China. And only recently have the Russians begun looking East as the solution and not the problem… All those Chinese looking northward toward all that vacant land in Siberia? How do you say Manifest Destiny in Chinese?
… i guess that would be mostly mandarin?
命 定 擴 張 論
mìng dìng kuò zhāng lùn
fate determined enlarged open up theory
manifest destiny, just for fun and not that I am an expert or anything.
And 命 定 扩 张 论 if you prefer simplified characters.
Vietnam was about a few more things than it got sold as.
One main factor was U.S. nuclear deterrence policy at the time — specifically, the policy of extended deterrence aka the nuclear umbrella that we supposedly extended to allied countries like Japan and S. Korea. Or, for that matter, that Kennedy articulated with his “Ich bin ein Berliner” statement in 1963.
Nuclear deterrence is inherently problematic, since in anything less than an existential situation it’s clearly implausible — and nuts! — to claim that one will respond to an enemy’s aggression with a nuclear strike that will trigger the end of oneself, the enemy and possibly everything else on the planet.
Extended deterrence policy is especially problematic, since by definition the nuclear power isn’t existentially threatened.
Hence, in the 1960s U.S. strategic doctrine was that in order for U.S. extended deterrence policy to be made plausible we had at all times to keep out commitments to our allies everywhere on the planet — including Indo-China.
This was sold to the public as the more easily understood ‘domino’ theory of foreign policy. A very stupid strategic doctrine, ultimately.
Maybe it’s comforting to know they are not very good at exporting bad ideas…like deregulating derivatives.
Those things can cause a lot of internal and external conflicts.
How horrible to manipulate! How reasonable to manage. Is there anyone on the planet who things the U.S. model to “managipulate” its economy is a sound one? The Chinese government abhors social disorder and economic turmoil and will managipulate to avoid it. The U.S. government will facilitate disorder and turmoil as it benefits those it truly serves.
Anger and suspicion towards China is all wrong.
1. China’s currency peg means that all they’re doing with their currency is what the USA has been doing with theirs.
2. China has been providing an abundance of real goods in exchange for debt notes which the USA can produce for free.
So there is no reason for the USA, as a nation, to be angry towards China, as a nation.
But there is plenty of reason for working class Americans to be furious with the American gov’t, and plenty of reason for working class Chinese to be at least somewhat annoyed with the Chinese government.
3. The principal beneficiaries of this fiat-fuelled trade bubble have been the elites within both the USA and China.
4. American workers have lost their high-paying jobs to global trade competition, esp. China. American bosses have made wonderful gains by encouraging their workers to borrow heavily to buy Chinese goods, even as those workers’ incomes shrank.
5. Chinese workers have toiled long and hard, they have in many cases lost their rural land holdings which they sold for money which has since devalued, and they have crowded into cities in which many must borrow heavily to ge housing. Due to currency manipulation most Chinese workers are unable to secure the sort of consumption level and living standard which they deserve from their efforts. Meanwhile, Chinese bosses drive foreign-made luxury cars and spend their country’s tax dollars on prestige superhighways for them to drive on.
6. In both countries the elites try to foster excessive nationalism as a distraction. In both countries there are folks like aeolius who are silly enough to buy into the latest line of BS. I don’t think either country’s elite wants an open conflict–they just want to manage their respective worker classes. But will the nationalist genie always do the bidding of the one holding the lamp?
The worst conceit of ruling classes is that the world actually follows their volition.
Final note: China can’t buy Alberta except on paper. Canada can always nationalize it all back, at the stroke of a pen. If Chinese investors don’t like it, what can they do? Try to invade a NATO country? What a joke!
The same really applies to all of China’s foreign loans, and to all their efforts to purchase raw material sources abroad. Without the ability to forcibly collect on debts, what is to stop China’s debtors from defaulting or inflating away the debt?
Without the ability to do regime-change against governments that expropriate Chinese investment holdings, how can China prevent any two-bit raw material producer from holding the Chinese resource investments to political ransom? If the Chinese threaten, the expropriators will seek protection from a certain well-known rival power…
China’s at least 20-30 years away from having global military power-projection capability, and even then the current hegemonic incumbents will see it coming a long ways from completion.
China’s elites have a made a serious blunder in pursuing an energy-and-resource-intensive mode of economic development. But political elites who want to get rich often tend to get shortsighted.
‘China Export Growth Dwindles to Slowest Pace in Seven Months as Yuan Gains’
http://www.bloomberg.com/news/2011-10-13/china-trade-surplus-drops-to-lowest-in-four-months-as-export-growth-slows.html
‘China’s exports rose the least in seven months and the customs bureau warned of “severe” challenges as the global economic outlook dims, giving Premier Wen Jiabao’s government less incentive to let the yuan rise.
‘Exports rose a less-than-forecast 17.1 percent in September from a year earlier, the bureau’s data showed in Beijing. The trade surplus was $14.51 billion, the smallest since May. Growth in shipments to Europe, China’s biggest export market, slumped to 9.8 percent, from 22 percent, amid the sovereign-debt crisis in euro-region nations…
‘… exporters are afraid to accept large or long-term orders, the customs bureau said in a statement. “Serious development problems, high unemployment rates and sliding consumer confidence” in the EU, U.S. and Japan, and slowing growth in emerging economies “present severe challenges,” it said….
Don’t see how any state Bureaucrats in China can run things better than peers across the pond. Although it doe’s help to control the press