China’s economic policy follows a random path
Financial Times, 13 Oct. 2014,
咱们中国人是得过且过的高手:
(1)
(2)
(3)
(4) 房地产税:
新浪博客
Financial Times, 13 Oct. 2014,
咱们中国人是得过且过的高手:
(1)
(2)
(3)
(4) 房地产税:
还有下文吗？
China's approach to foreign exchange, like many of the decisions of the country's public authorities, could best be described as a banana-skin policy. That is to say: the government has no policy. It simply keeps doing the same thing for as long as possible, until it slips, suffers a nasty bruise, picks itself up and tries something else.
In the early 1980s, a US dollar bought you two renminbi. That was the fixed rate in the official market, anyway; the
To maintain an overvalued exchange rate, China in the mid-1980s introduced a foreign exchange certificate to ration foreign currency. Only approved users would receive a ration. But FECs quickly took on a life of their own; unofficial trading of the certificate boomed. Black market prices fluctuated between
A black market for foreign exchange had existed ever since the 1950s. It only dried up in the mid-1990s, when the central bank drastically reduced the official value of the renminbi. Following that, FECs became worthless and the central bank stopped issuing them in 1995.
That Beijing had maintained an overvalued renminbi for half a century may come as a surprise to westerners who have grown accustomed to grumbling that an undervalued currency gives Chinese manufacturers an unfair advantage. Was the central bank deliberately punishing its own exporters and rewarding foreign businesses? That might have been the outcome but clearly it was not China's intention.
The Chinese are masters of muddling through. They are firmly attached to the status quo, whatever that happens to be. Anyone accusing China of currency manipulation in the past decade is ignorant of the five that went before it. The renminbi now trades 30 per cent higher than its 1994 level. This did not happen by choice. It just happened.
This is not the only instance in which Chinese policy has followed a random path. A little over a decade ago, Beijing became
When a
For decades,
Since 1978,
The writer is author of ‘Party Man, Company Man: Is China's State Capitalism Doomed?’
China's approach to foreign exchange, like many of the decisions of the country's public authorities, could best be described as a banana-skin policy. That is to say: the government has no policy. It simply keeps doing the same thing for as long as possible, until it slips, suffers a nasty bruise, picks itself up and tries something else.
In the early 1980s, a US dollar bought you two renminbi. That was the fixed rate in the official market, anyway; the
To maintain an overvalued exchange rate, China in the mid-1980s introduced a foreign exchange certificate to ration foreign currency. Only approved users would receive a ration. But FECs quickly took on a life of their own; unofficial trading of the certificate boomed. Black market prices fluctuated between
A black market for foreign exchange had existed ever since the 1950s. It only dried up in the mid-1990s, when the central bank drastically reduced the official value of the renminbi. Following that, FECs became worthless and the central bank stopped issuing them in 1995.
That Beijing had maintained an overvalued renminbi for half a century may come as a surprise to westerners who have grown accustomed to grumbling that an undervalued currency gives Chinese manufacturers an unfair advantage. Was the central bank deliberately punishing its own exporters and rewarding foreign businesses? That might have been the outcome but clearly it was not China's intention.
The Chinese are masters of muddling through. They are firmly attached to the status quo, whatever that happens to be. Anyone accusing China of currency manipulation in the past decade is ignorant of the five that went before it. The renminbi now trades 30 per cent higher than its 1994 level. This did not happen by choice. It just happened.
This is not the only instance in which Chinese policy has followed a random path. A little over a decade ago, Beijing became
When a
For decades,
Since 1978,
The writer is author of ‘Party Man, Company Man: Is China's State Capitalism Doomed?’