Financial reforms seem to get on its way, as China removed last week the deposit interest rate ceiling. Financial analyst Sara Hsu calls it in the Diplomat a milestone in the promised financial changes.
Category Archives: People’s Bank of China
A high PBOC official has speculated about using the Tobin tax, a fee on capital flows, to discourage short-term speculation. Financial analyst Sara Hsu explains why the Tobin tax would be a bad idea for China in the Diplomat.
The badly handled crisis at the stock markets and the unfortunate devaluation of China´s currency are still casting shadows on the country´s financial future, says economist Arthur Kroeber at CNBC. At this stage it is very unclear whether the central government has the capability to handle needed financial reforms.
The central government wrongly used the upswing in stock markets as a proxy for real reforms, says associate professor Victor Shih in the Washington Post. Until those shares came down and created mayhem in China and globally. “”In dictatorships, when things are going well, nobody wants to end the party.”
The government has really messed up almost anything they did on the financial markets, says financial analyst Arthur Kroeber on NPR. Internal divisions between different factions did not help to make sound financial decisions.
China´s central bank decided on Tuesday evening to step in with a few minor measures. Too little, too late to have any effect on the stock markets, tells business analyst Shaun Rein in Money Control. But since the real economy is doing pretty well, he sees little reason for real worry.
Financial analyst Sara Hsu strongly disagrees with former US ambassador to the UN John Bolt as he accuses China it manipulated its currency by the recent devaluation. China is just doing what politicians in Washington have asked them to do, Hsu argues in PressTV. “They wanted China to become more market oriented.”
One of the reasons for China to drop the value of its currency was to get into line with the IMF requirements to become a global reserve currency. Much of the country´s actions is about prestige, says associate professor Victor Shih at WFDD.
There are two schools of thought on China´s recent devaluation of the Yuan. A group of analysts, like Victor Shih and Tom Doctoroff, believes the central government is in panic and tries to jump-start economic growth. Others like Arthur Kroeber and Nicholas Lardy join the official explanation, telling us the move is market-driven, and good for its international standing. Financial analyst Sara Hsu joins the last group, in the Diplomat.
The devaluation of the yuan was right, argues economist Arthur Kroeber, according to the Washington Post. But the timing was most unfortunately, leading to the – wrong – conclusion the central government was taking panic measures.