(eToro Blog) Policymakers at the Fed and ECB might want to take a cue from the People’s Bank of China. Chinese growth has continued to steadily and inexorably rise, and is only now “moderating” (relatively, of course) and some analysts believe that it’s testimony to the People’s Bank of China and the Beijing government which are exceptionally skilled at manipulating policy to achieve a desired end.
In the last three months, inflation has decreased steadily from a July peak of 6.5% to the current (September) 6.1%. Also in the last quarter, China’s GDP “slowed” to 9.1%. But all of this is exactly where the Chinese government wants it to be and the soft landing they’ve been angling for.
One asset fund manager specializing in China-related securities believes, in fact, that it’s purely a manufactured slowdown, and that Beijing and its monetary watchdog can change the game, and its outcome, at any time. And while he agrees that a general slowdown in global growth had a hand in that moderation it’s still a result of how well Beijing plays the game. Regardless, though, he points out that China has a trade surplus, a fiscal surplus and a foreign exchange surplus, all of which would give them the best odds to weather any Euro-fabricated storm.
Separately, but still in a similar theme, a recent list of the world’s major central bankers published by Global Finance Magazine gives the People’s Bank of China’s, Zhou Xiaochuan, a B grade this year, a whole grade improvement over last year’s C. The ECB’s Jean-Claude Trichet scored a B- slipping down from an A in 2010. And where does the Fed’s Ben Bernanke rank? The Harvard and MIT graduate is, apparently, only a middling central banker, scoring an unchanged C-.
It’s possible that things could change next year in China, as there is to be a change in leadership when both the Chinese president and the Chinese premier step down. Analysts liken that to a U.S. election year, which is typically market-positive, and expect that a reinvigorated China is in the offing.
Copyright 2011 eToro Blog
