Posts Tagged ‘RMB’

Warning: China MAY be near an economic crisis

Monday, October 3rd, 2011

More than a month ago, we were listening to a video interview with Victor Shih, of Northwestern University, and Carl Walter, co-author of Red Capitalism, on China?s banking system. It is a very interesting interview by experts who really know their stuff.

In this interview, one thing stuck in our mind. The question was put forth to Victor Shih on what he thought may be the trigger for a financial/economic crisis in China. The usual suspects of what the trigger may be usually comes in the form of an external shock (e.g. collapse of Euro-zone, global recession) that crunch China’s export industry. Surprisingly, that wasn’t his consideration. Victor Shih offered his favourite theory (though he emphasised that it is by no means a prediction) that when it comes to the point when China’s elite begin to pull its vast wealth out of China, that will be the thing that trigger a crisis. This could happen, for instance, when the elite find that the returns on/of their investments inside China is floundering.

Indeed, we notice that one of our favourite China experts, Patrick Chovanec is getting more and more nervous about China over the course of past several months. Today, we read from his latest blog post,

For the moment, I?m reminded of that song: “Something?s happening here; what it is ain?t exactly clear.” But ? and this is the real point ? something is happening, and people both inside and outside of China are right to be nervous.

…

My experience, talking to numerous investors and economists, is as follows: the closer you are to running an econometric model, the better you feel about the Chinese economy; sure, there may be bumps along the road, the models tell us, but fundamentally the momentum is so strong that growth will stay on track. The more you go out and look around, and listen to your gut, the more worried you become. Something?s happening here, what it is ain?t exactly clear ? but it feels bad, very bad. The problem with models, and the reason I?m inclined to stick with my eyes and my gut, is that models work very well when prior patterns of perception and behavior remain constant, but are very poor at noticing inflection points where the way people think and act undergo a shift. In other words, they are very poor at identifying moments of crisis.

Indeed, some sort of a credit meltdown is brewing in Wenzhou. If you have friends in China, you can ask them about Wenzhou because it is in the Chinese media lately. We are heard a story that the Bank of China is offering an extremely high overnight interest rate for high net-worth investors with a big sum of cash.

There is another interesting observation that is quite unusual. China’s RMB is widely perceived to be undervalued. This can be seen by the fact that the RMB is always bumping against the upper band of the government-imposed US dollar exchange limit. But today, the RMB is bumping against the lower limit of the band. It looks like the RMB ‘wants’ to depreciate against the US dollar.

Why?

As Patrick Chovanec wrote,

Presumably because the capital account had flipped, and speculators were now rushing to turn their RMB into dollars in order to take their money out of China.

…

What the new downward market pressure on the RMB does indicate, however, is that China ? for so long a no-brainer destination for investment ? has turned into a big question mark. And it suggests that at least some domestic Chinese investors who have been inclined to sock their money into empty villas and condos ? or big stockpiles of raw materials ? are now looking for a way out.

That’s exactly Victor Shih’s pet theory about a possible trigger for a financial/crisis in China. Although Patrick Chovanec reckons that this does not mean a collapse in the RMB because China’s vast hoard (US$3 trillion) of US dollar reserve can allow it to defend the RMB, we aren’t so sure.

Why?

As we wrote early last year at Is China allowed to use its US$2.4 trillion reserve to spend its way out of any potential crisis?

According to the chart provided by Pivot Capital?s report, only a little over 20% of China?s total currency (plus gross external debt) are ?backed? by their US dollar reserves, which isn?t spectacular compared to other emerging economies. In fact, South Africa is the winner in this aspect because their reserve coverage ratio is almost 160% i.e. it has $16 of reserves for every $10 of currency.

Since China had been printing copious amount of money too, the People’s Bank of China’s (PBOC) liabilities (RMB) far exceeds its asset (US dollars). If say 30% of China’s RMB wants to exit China, this could easily trigger a currency crisis for China. Is this too far fetched? We don’t know and we do not have the data to give a definitive answer. But this is something you have to watch out for.

It is no secret that Australia’s economy is highly reliant on China. In light of what’s happening in China, Australian investors better be prepared. By the way, in this Youtube video, Marc Faber advised that some sectors of China’s economy may crash.

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Posted in Looking Forward | 9 Comments »

What can you do to protect yourself from increasing currency volatility?

Sunday, September 19th, 2010

Six months ago, we wrote about America’s consideration to label China as a “currency manipulator” in Watch April 15 2010: simmering tensions between US and China. Just before the deadline, China appeared to make a little concession about their RMB, thus avoiding the “currency manipulation” label.

Today, currency tension between the US and China is rising again. The little concession that the Chinese government made was simply not enough. American lawmakers are getting impatient and are itching to enact laws to slap China with trade sanctions. Should that happen, it will be the beginning of a damaging trade war between the world’s largest economies. Their charge is that China’s artificially low currency is responsible for (or at least contributed to) America’s economic woes. But as we wrote in Watch April 15 2010: simmering tensions between US and China,

But the mob wants to find a scapegoat to blame for their woes. It so happens that the most convenient scapegoat is China (specifically, China?s policy of artificially holding its currency down) because at this point of the cycle, China is looking very good. It is perceived that this policy worsen America?s unemployment rate. By implication, it is perceived that with China?s official unemployment rate much lower, China is ?prospering? at America?s expense.

Currency tensions between China and the US are nothing new. As we wrote in that article, it’s been around for the past 3 to 4 years. Many times, the rhetoric about America labelling China a “currency manipulator” came and went away without eventuating into reality. However, that does not mean that it will never happen. As America’s economic woes worsen, the pressure to find a scapegoat will increase. As a result, the probability of a trade war will increase.

The Chinese, on the other hand, are not standing idle, waiting for a trade war to happen. For starters, they are establishing trade and investment links with Asia, Middle-East and Africa. Secondly, it is no secret that they have been diversifying their colossal hoard of reserves away from the US dollar. Given the well-known intention of the Federal Reserve to print more money, diversification has become increasingly urgent. But that in itself is not easy because given the colossal size of the money involved, any whispers and hints about any particular Chinese diversification strategy will move the markets quickly in a big way. For example, the recent rumours that China was buying up Japanese government bonds probably helped to contribute to the surging yen. As a result, the Japanese government became very unhappy because a very strong yen will negatively impact on their export-oriented economy. In response, the Japanese government may take concrete actions (beyond just talking about it and taking token measures) to weaken the yen, in which the end result is more Japanese purchase of US government debt.

In such an environment of competitive currency devaluation and price volatility, what should investors and savers do?

To us, it is clear that having all your savings and investments confined to a single country or currency is an increasingly risky proposition. Currency exchange rates will become more volatile, with implications on asset values, price inflation and economic growth (see Real economy suffers while financial markets stuff around with prices). For example, in Japan, real businesses are suffering as a result of the rising yen. The Germans, on the other hand, are secretly gloating whenever the euro weakens. In Australia, should the banking system fall into a crisis as a result of the bursting of the property bubble, the consequence of a resulting collapsing Australian dollar will be price inflation (see Can price inflation occur in the midst of debt deflation?).

If currency volatility goes to the extreme, investors will even have to question the idea of national currency as a store of value. So, what can investors and savers practically do to mitigate against this?

Quite some time ago, we talked to the guys at GoldMoney.com and learnt of how a lot of their clients (presumably the “rich”) use them. In case you do not know, GoldMoney.com (a regulated company operating in the financial services industry) enables

… you to hold gold, silver & platinum that is fully insured and stored securely in specialised bullion vaults in London, Zurich and Hong Kong. All metal is owned directly by you with no counterparty risk.

You can “easily buy gold, silver & platinum and take delivery of physical bars of gold.”

What their clients did was to use their GoldMoney.com account as a conduit to link their bank accounts all over the world. This strategy makes sense as it gives investors and savers the flexibility to shift their savings all over the world, using gold, silver and platinum as an anchor for the store of value. In an environment of currency volatility, this flexibility is a valuable aid in helping to protect your hard-earned savings from hare-brained government interventions.

However, for those who are ultra-pessimistic and distrust any assets that have any hints of paper, the only way to go is to take possession of physical gold and silver (see How to buy and invest in physical gold and silver bullion).

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Posted in Advertising/Affiliates, Currencies | 4 Comments »

Watch April 15 2010: simmering tensions between US and China

Tuesday, March 23rd, 2010

April 15, 2010 is a day worth watching. It will be the day when the US Treasury will issue a report, designating whether China is a “currency manipulator” or not. While the repercussions of China being labelled a “currency manipulator” are worrying, this issue is hardly new. In fact, as we wrote in US shooting own foot with tariff on Chinese goods three years ago,

At present [April 2007], the US Congress is simmering in antagonism against China for her trade surplus against the US. They see China as a convenient scapegoat for America?s economic woes, accusing her of misconducts that includes currency ?manipulation,? unfair trade practices and so on.

For the past three years, both sides seem to be going round in circles regarding the Chinese currency peg issue. It seemed that China was repeatedly on the verge of officially being accused of currency manipulation, only for that charge to be withdrawn from the final assessment. Based on statistical probability, the chances for that charge to be issued again are slim. But as our long-time readers know us, we are no fans of using statistical probabilities to ‘predict.’

One thing is clear: the pressure for officially labelling China as a “currency manipulator” is much strong today than three years ago. Firstly, President Obama is more inclined towards that than former President Bush. Secondly, the US economy today is at a more advanced stage of deflation (i.e. unemployment, fall asset values, economic stagnation) than three years ago. Thirdly, mid-term elections are coming and consequently, there are a lot of domestic pressures for Obama to get tough on China.

In the face of further economic stagnation, the US is sliding downward towards mob rule. With a clear understanding of Irving Fisher’s debt deflation theory of the Great Depression, we can easily understand that for an economy heavily addicted to debt, all it takes for the economy to slow down is a slowdown in credit growth. As we wrote in Australia?s credit growth is still falling,

Marc Faber once said that for an economy that is addicted to debt, all it needs to tip it into a recession is for credit growth to slow down- no contraction of credit is required. Also, as Professor Steve Keen explained, at this stage of the debt cycle, the aggregate spending in the economy is made up of income plus change in debt. In the absence of income growth, a slowdown in credit growth implies declining aggregate spending by the private sector.

Currently, the US is in the midst of a generational shift in culture/mindset from borrowing to saving. That is, in economic terms, the US private sector is de-leveraging. The symptoms of de-leveraging will be asset price deflation, economic stagnation, rising unemployment and so on, which will be counteracted by increase in government debt and spending (which itself is limited by market’s confidence in government debt).

In lay-person’s terms, the US is suffering because they are on cold turkey from debt. In contrast, the Chinese are postponing their pain by going further into debt (i.e. policy of inflation and force-feeding of credit into the economy). This result in an illusion that America is suffering while China is ‘prospering’ (which is worsened by Chinese government’s propensity to doctor the figures to look good in order to save ‘face’).

But the mob wants to find a scapegoat to blame for their woes. It so happens that the most convenient scapegoat is China (specifically, China’s policy of artificially holding its currency down) because at this point of the cycle, China is looking very good. It is perceived that this policy worsen America’s unemployment rate. By implication, it is perceived that with China’s official unemployment rate much lower, China is ‘prospering’ at America’s expense.

The problem is that if China is to acquiesce to America’s demands today, it will not solve the America’s problem tomorrow. In fact, the immediate effect will be to worsen America’s (and China’s as well) economic woes. Price inflation will rise and market based interest rates will go up, worsening America’s debt deflation problem. The reason is because the Chinese currency control had been in place for too long and that resulted in long-term structural changes to both the US and China’s economies. Removing the control immediately means that both economies will have no time to adjust, compounding the current level of pain for both sides.

For China, if the words of its Vice Commerce Minister Zhong Shan are accurate, the profit margins of many Chinese exporters were less than 2%. By appreciating the yuan, many Chinese exporters will go under, which by implication will have serious impacts on unemployment in China, and by extension, on social stability.

SEO Secrets e-bookBut as we wrote before in Chinese government cornered by inflation, bubbles & rich-poor gap, China has their own inflation problem that will eventually threaten social stability. They are already taking tentative steps to rein in inflation (see Is China going to allow its banks to fail in the upcoming (potentially gigantic) wave of bad debts?). Letting their yuan appreciate is very likely part of their overall plan to re-balance their economy. It will happen eventually. But the problem is, the Chinese wants to do it gradually. But the US politicians, on the other hand, want China to do it quickly in order to appease their electorates. Already, we have American economists like Paul Krugman (who is of the same ideology as Ben Bernanke with regards to money printing to solve economic problems) writing inflammatory articles and egging for a economic fight with China.

So, April 15, 2010 will be an interesting date to watch. If China gets labelled as a “currency manipulator,” then trade tensions jump up a level. If left unchecked, that will result in trade war. If trade war is left unchecked, the gloves will come off and there will be more unsportsmanlike actions from both sides (i.e. covert dirty war). If dirty war goes unchecked, there is a risk of shooting war. We are not saying all these things will happen- our point is that there will be a time and sequence for things to happen.

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Posted in Currencies, Economics/Finance, Looking Forward | 4 Comments »

Is China allowed to use its US$2.4 trillion reserve to spend its way out of any potential crisis?

Thursday, February 11th, 2010

Everyone knows that China has US$2.4 trillion of reserves. This has led to many (including some analysts from big financial institution) to believe that such gigantic reserves are akin to ‘cash’ that China can spend its way out of any potential crisis.

Actually, this is one big misconception that this article will address.

The US$2.4 trillion of reserves is only half the picture. Looking at that alone is analogous to looking at the asset column of a company’s balance alone. What’s also important is the liability side of the picture. When you put the two together, then you will get a better idea of how much of the ‘cash’ (i.e. the reserves) that the Chinese government can really spend.

First, we will look at the liability side of China’s ‘balance sheet.’ According to this report from Pivot Capital Management,

… the size of the Government?s debt is vastly understated. Not included in the public debt figures are the liabilities of the local governments, which the Ministry of Finance estimated at $680bn as of the end of 2008. In addition to that, a large part of the loans extended this year (estimated at $350bn) went to finance public infrastructure projects guaranteed by local governments. Furthermore, when the Chinese government bailed out its banking system in 2003, it set up Asset Management Companies that issued bonds to the banks at par for the non-performing loans that were transferred to them. These bonds, worth about $260bn, are explicitly guaranteed by the Ministry of Finance and the Central Bank and sit on the balance sheets of the big four banks. The Chinese government also explicitly guarantees $400bn worth of debt of the three ?policy banks?. In total, these off-balance sheet liabilities are equal to $1.7tn, which would bring China?s public debt to GDP ratio up to 62%, a level that is comparable to the Western European average.

These debt guarantees within the off-balance sheet liabilities are what we call “contingent liabilities.” Australia’s bank deposit and wholesale funding guarantee are examples of contingent liabilities of the Australian government (see Australian government?s contingent liability to exceed AU$1 trillion).

These off-balance sheet liabilities are not the only liabilities. The Chinese currency in circulation is also a liability. Remember what we wrote in How does China ?save?? Story of the circuitous journey of a US$? In that article, we explained how a US dollar travelled from America (in the hands of an American consumer) to China, and then exchanged as RMB and then travelled back to the US as Treasury bond purchases. The crucial intermediate step to examine in this circuitous journey is when the US dollar is exchanged for RMB. As we all know, the RMB is pegged to the US dollar at a specified ratio. Currently, the ratio is at 1:6.833. To simplify matters, let us round up the number to 1:7. What happens (in a very highly simplified form) is that for every US dollar that gets presented to the PBOC, approximately 7 RMB will be issued.

One way to look at it is that the RMB in circulation are ‘backed’ by US dollars in the form of currency reserves. That was exactly the same situation that America faced in the 1920s. Back then, under the gold standard, the US dollar was pegged against gold in the ratio of approximately 1:20. In reality, not every US dollar was backed by gold. In other words, the US dollar was partially backed by gold in the same way your ‘cash’ at bank was partially backed by physical currency and your bank’s deposit on the central bank. That is, there was a theoretical possibility that there could be a run on the Federal Reserve’s gold if every citizen decided to redeem all their currencies for gold at once. In the same way, China’s RMB in circulation are partially ‘backed’ by their US currency reserve. According to the chart provided by Pivot Capital’s report, only a little over 20% of China’s total currency (plus gross external debt) are ‘backed’ by their US dollar reserves, which isn’t spectacular compared to other emerging economies. In fact, South Africa is the winner in this aspect because their reserve coverage ratio is almost 160% i.e. it has $16 of reserves for every $10 of currency.

Of course, in reality, it is unlikely that there’s going to be a run on China’s US dollar reserves. But according to Pivot Capital, since 2007, there are approximately US$500 billion of “hot money” in China that can easily leave the country at a moment’s notice. That US$500 billion is money that China cannot spend and must be ready to meet the ‘redemption’ demand of the “hot money.”

So, in reality, the picture of China’s currency reserves is not as rosy as it seems.

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Posted in Currencies | 10 Comments »

How is China slowing the never-ending stream of $US? Part 2: Forex escape valve

Thursday, July 23rd, 2009

In the first article of this series (How does China ?save?? Story of the circuitous journey of a US$), we showed you how the US$ leaked out of America from its current account deficit, streamed into China, showed up as monetary inflation of the Chinese currency and then flowed back into America as investment. In the previous article, we showed you how China opened up an avenue to slow down the never-ending flow of US$ into China. Today, we will explain to you another step that China is going to take to reduce the US$ inflow.

First, let?s take a look at steps 3 to 6of the process in our first article,

  • The remaining US$3 ends up in a factory in southern China. The deal between Oral-B and the Chinese manufacturer is denominated in US$ (i.e. the Chinese manufacturer is paid in US$). But US$ cannot be used in China because the RMB is the currency of China. So, what happens next?
  • The Chinese manufacturer will present the US$ to a local Chinese bank (say, the Shenzhen Development Bank). He has to show the receipts to the Shenzhen Development Bank (SDB) to prove that the US$ is earned by trade and not through speculation.
  • The Shenzhen Development Bank (SDB) will take the US$3 in exchange for RMB.
  • In China, the SDB has to surrender all of its US$ to the PBOC for RMB at whatever the official exchange rate.

Basically, US$ is like contraband in China- banks have to surrender all of them to the State. But things are changing…

Our long time readers may recall that back in October 2007, we wrote China considers leaking money to overseas stock. Back then, the Chinese government was toying with the idea of allowing private investors to punt in the overseas stock market. It was a pilot project back then.

From August 1, a new change will take into effect. As this official Chinese news report said,

China’s foreign exchange regulator said Wednesday it would loosen its controls on overseas investment procedures and foreign exchange management of domestic companies to boost outbound investment.

In other words, the Chinese government is making it easier for US$ to flow out of China as investments by the private sector. This will mean less pressure on the burgeoning official forex reserve.

Along with this new capital freedom, we expect the next logical step will be towards the eventual float of the RMB. This is because capital freedom and currency peg can be a dangerous powder-keg combination. To understand why, you may want to read this article that we wrote back in October 2007. But be warned, a float of the RMB will not happen tomorrow. The Chinese government will take their time reach that eventual destination.

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Posted in Currencies, Economics/Finance | 14 Comments »

Nations will rise against nations

Sunday, March 15th, 2009

A few days, as reported widely in the news media, Chinese Premier Wen Jiabao said at a press conference that

We have lent huge amounts of money to the United States. Of course we are concerned about the safety of our assets.

To be honest, I am a little bit worried and I would like to … call on the United States to honour its word and remain a credible nation and ensure the safety of Chinese assets.

Those words, when translated into English in writing, sound bland. But if you watch what he said in full video in the original language, then you will be able to appreciate the immense gravity of the situation from the tone of his voice.

But dear readers, you must understand that Premier Wen was just stating the obvious. There’s nothing new in what he said. All you have to do is to turn back to what we wrote in December 2006 and read Will the US dollar collapse? and Awash with cash?what to do with it? to see the big picture of what’s going on for years. As we wrote back then,

Lately, we are again hearing that central bankers are murmuring about diversifying their foreign reserves away from the US dollar. Does it mean that there is an imminent liquidation of their US dollar reserves? Well, this is not the first time they murmured about it and it is definitely not in their (including the Federal Reserve?s) interest to see a collapse of the US dollar. The Chinese, with their US$1 trillion of reserves, would not want to see their stockpile of US dollars to lose significant value.

That paragraph was written in the final days of 2006. Today, China’s US dollar reserve had doubled from they had more than 2 years ago. The major difference between today and back then is the emergence of the Global Financial Crisis (GFC).

Thanks to the GFC, the status quo, which had been running for decades, is stressed towards a breaking point (but who knows, perhaps that inevitable  breaking point could still be delayed for longer before an almighty snap happens). There are far too many contradictory and conflicting interests among nations.

For the US, as we said before in How is the US going to repay its national debt?, is facing a situation in the coming decades of having to pay a colossal amount of public debt. The public sector is facing a massive debt many times its GDP from the unfunded Medicare and social security liabilities. With the GFC, the US government is transferring more and more private debt to the public sector through bailouts, handouts and stimulus. It is either the US mobilise its monetary printing press to massively inflate away (i.e. print copious amount of money) all these debts or they face up to the reality that they are bankrupt and go through the cold turkey of an almighty deflationary collapse (read: almighty depression). If the US chooses the former, China will be furious because that will be doing the very opposite of what Premier Wen called on the US to do, namely to “honour its word and remain a credible nation and ensure the safety of Chinese assets.”

Unfortunately, the big problem is that the US (along with countries like Australia and UK) has been de-industrialising and hollowing out its economy for a very long time, while the China has been doing the opposite. To put it simply, the US is consuming more and more while China produces more and more. This gross imbalance has been playing out for too long. With the GFC, the US consumers are effectively bankrupt and cannot borrow any more to buy from China. China has lost its biggest customer and is in trouble too.

The coming G20 Summit will be filled with countries with conflicting agendas. The US (and UK) wants more stimulus (and of course, bailouts when required), which can only happen if they print money (i.e. devalue the US dollar), which is as good as spitting on China’s face. Europe (headed by Germany and France) wants the focus to be on regulations and prevention, which means they are less keen on stimulus and bailouts. This is because the latter will involve the tax-payers of countries like Germany rescuing the tax-payers of other EU nations. China, on the other hand, wants an overhaul of the current world order so that they can have more power and say to better reflect their status as America’s creditor. Obviously, the US will not like that because that will mean they have to voluntarily descend for an ascending China.

There are plenty of temptations to take the easy way out. For example, if the Chinese expect the US to inflate away their debts by printing money and thereby, devaluing the US dollar, they will be likely to devalue their RMB in order to continue the process of hollowing out the US economy. The US (and the Europeans), in response, could impose trade barriers on Chinese imports. The Chinese could retaliate by dumping their holdings of US Treasuries. Remember, these are just examples of what may happen and they are by no means predictions. But we trust that you get the idea here.

Therefore, outwardly, the world may be at peace. But inwardly, we believe there will be jostling for power, influence and resources between the major nation blocs. Bigger nations will use smaller nations as pawns, international armed non-state groups will intensify their activities and inter-ethnic conflicts will arise. We have no doubt that there will be plenty of Black Swans appearing in the days to come.

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Posted in Currencies, Geopolitics & Politics, Looking Forward | 14 Comments »

Why is China printing so much money?

Thursday, December 7th, 2006

In our previous article, Cause of inflation: Shanghai bubble case study, we explained that the root cause of price inflation is monetary inflation. The Chinese economy is awash with growing liquidity (that is, the economy is soaked with ever-growing supply of money). The next question to ask is: why is money supply growing in China?

One of the culprits for this problem is the inflexible exchange rate of the Chinese currency (RMB). The RMB is not a freely floating currency?its exchange rate is still controlled by the Chinese central bank albeit having some semblance of flexibility. At the current rate of exchange, the RMB is undervalued. Since it is undervalued, foreign capital will want to enter China in the form of foreigners buying up the RMB. If the RMB is a freely floating currency, the demand for it by foreigners will bid up its price, which will reduce its demand as it becomes more expensive. Conversely, as its price rose, domestic sellers of RMB will sell down its price. Finally, a market equilibrium price will be reached where the quantity supplied will meet its quantity demanded. Since the RMB?s undervalued exchange rate is still barred by the Chinese central bank from rising, foreign demand will exceed its domestic supply. So, the question is: where is the RMB going to come from? In the absence of capital controls freedom, the only choice the Chinese central bank has is to print RMB to maintain the undervalued exchange rate. Now, with foreigners armed with freshly printed RMB, they bided up the prices of Chinese assets, including stocks and properties. In the case of Shanghai, real estate prices had reached dangerously bubbled prices. As those newly printed money permeate its way into the rest of the Chinese economy, the result is price inflation. We are hearing reports from the grassroots level that prices of many things (including everyday goods and foodstuffs) in Shanghai are increasing.

Lately (as we mentioned before in Are you being ripped off by fund managers?), we are not keen in handing our hard-earned wealth into the managed fund that is sinking more money into the massive pool of raging liquidity in the Chinese economy. There are better alternatives to take part in the growth of China than to join in the bubble.

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Posted in Economics/Finance | 22 Comments »