The news is abuzz with China’s recent stock market crash. The naysayers are all coming out. Not that they were ever hiding, but now it’s a parade – with horns and drums to toot!
Some reports are however darn right silly. For example in this CNBS report titled How China might have given itself a black eye, a reporter would first accuse China of committing the sin of fighting in vain against market forces, then accusing China of not being able to do enough.
Then there are outlets like Wall Street Journal pronouncing China is doomed to fail, and then a few days later pronouncing everything is fine. There are of course also those who swear that they had foreseen the crash all along, for umpteenth obvious reasons.
Here is my take. Continue reading So China is Doomed Because of a 30% market crash … ?
With Iceland close to bankruptcy and the world’s financial system going to hell, China stands somewhat apart in its relative isolation. Asia Times has an intriguing article on this:
“In the past, China has been blamed for the low-degree of internationalization of its financial industries. Now it seems we are profiting from this ‘fault’,” the commentary said.
Many Chinese economists share this view. “Our not-fully-open financial system and not-fully-convertible currency saved China from being rattled during the 1997 Asian Financial Crisis. And now again this seems to be a strong dam to protect us against the current financial tsunami,” an economics researcher with the Chinese Academy of Social Sciences (CASS) said.
“It is evident that the financial industries cannot become entirely market oriented. The semi-market, semi-government-control system may prove a better [system]. The problem in China is that the part of government control is too big and thus reforms are needed to deregulate.”
In early September, Steven N S Cheung, a Hong Kong-born Chinese-American economist living in exile in China, being wanted by the US government for alleged tax evasion, claimed that China “has formed the best system in the history of human kind”.
Continue reading Lessons for China from the world financial crisis