Category Archives: China

Past Crashes, Current Lessons, and China’s Externalities

John Plender in the Financial Times wrote a very solid piece, “Credit squeeze could be harbinger of a Chinese crash,” which looks at the major financial train wrecks of the past century and finds a common element: immature but rapidly growing economies acting as major global creditors. The efforts to manage the resultant imbalances lead […]

IMF and G-7 at Cross Purposes on the Dollar?

In an odd happenstance of timing, the IMF published a report on Wednesday that declared the dollar to be overvalued. As we have noted before, this isn’t the first time they’ve come to this conclusion (they issued a similar finding at the beginning of August). That view, by the way, isn’t one that has made […]

Paulson Facing Heat From G-7 on Regulations and the Dollar

I’ve been having so much with SIVs that I am late to this piece from Bloomberg. It describes how Paulson will face a great deal of criticism from his G-7 peers this week due to his stance on regulation (more accurately, the desirability of a lack thereof) and the dollar. The writer believes Paulson is […]

Jeffrey Garten on Forestalling a Dollar Rout

Yale Professor Jeffrey Garten has long argued that letting the dollar fall will do little to remedy America’s chronic balance of payments deficit. In a recent Newsweek article that picks up on themes he presented in a 2004 New York Times op-ed, namely, that America is so addicted to imports that a big fall in […]

IMF Chief Talking Up the Dollar

In an interview published in today’s Financial Times, soon-to-retire IMF managing director Rodrigo Rato declares the dollar to be undervalued. Now we have noted that some technically minded traders see the dollar as oversold at current levels. But “oversold” is not the same thing as “undervalued.” Oversold suggests that there will be a near-term rebound, […]

Vietnam and Qatar Retreat From Dollar

In a further blow to the dollar’s standing, Vietnam and Qatar both announced that they are cutting their holdings of dollar assets. Note that this isn’t merely “diversifying away from the dollar” which could be accomplished by effectively reducing ongoing dollar purchases (both run trade surpluses which oblige them to buy dollars) via exchanging them, […]

China Launches Price Freeze

Do you remember “Whip Inflation Now,” Gerald Forf’s program to reduce inflation by exhorting consumers to spend less? WIN buttons, part of a public awareness campaign, quickly came to symbolize the cluelessness of the Ford Administration. The Chinese are about to learn Ford’s lesson the hard way. Rampaging domestic inflation has led the government to […]

Shopping for Currency Appraisals (Yuan Edition)

The Treasury department has been struggling to persuade China to let the yuan appreciate (the Chinese now engage in a dirty float in place of their former hard peg). Congress has threatened to impose trade sanctions if the Chinese do not let their currency float. However, the Chinese do not take kindly to threats, and […]

Mirable Dictu: Businesses Want More Regulations (If They Write Them)

We’ve never understood why regulation has such a bad name in America. Yes, there are all kinds of terrible specific implementations of the concept “regulation.” But the difficulty of getting it right doesn’t mean the concept should be rejected out of hand, since it turns out the alternative of “no regulation” isn’t so hot. And […]

Chinese Military Hacked Pentagon Computers

This story, on the Chinese successfully making a cyber attack on the Pentagon, is admittedly a bit wide of the subject matter of this blog, but it’s a major story that the Financial Times seems to have broken. I don’t see it on the New York Times, Wall Street Journal, CNN or Bloomberg sites. Bizarrely, […]

Paulson Hoist on His Own Petard (Yuan Version)

One of the Treasury Department’s big campaigns has been to put pressure on the Chinese to allow the yuan to float more freely (the Chinese now engage in a dirty float in place of their former hard peg). Most analyses of the value of the yuan show it to be undervalued, some by as much […]

iPhone Cloned

An excellent story, “China’s iClone,” in Popular Science on the Chinese cloning industry, which uses the miniOne, an iPhone clone that runs on Linux and offers improvements such as the ability to run on any phone network and a replaceable battery, at about half the price of the iPhone, as a point of departure. What […]

The Environment: China’s Achilles Heel?

My Japanese friends have often said that China has a 5,000 year history of not living up to its potential. When I’ve passed that view along to Westerners, they’ve scoffed, viewing the Chinese juggernaut to be unstoppable. The Japanese may yet be proven correct. This post at Gristmill points to an article by Christina Larson […]