China is the second batch of the financial tsunami, "delisting" of the country, the first "delisting" of the country is resource-rich countries such as Australia, Indonesia, the financial crisis forcing global printing money, more money, resources, commodity prices, these countries economic recovery on something else.
China is in the second half of 2010 began to "delisting" as inflation began to appear in 2009, the year the price index in China is still negative, was negative 0.7%. A In 2010, however, rapidly rising prices, to October 2010, the rise in the price index has reached 4.4%, far exceeding the 3% target, in addition to price indices, house prices rising faster, a large number of young blame can not afford housing prices soaring dissatisfaction appear in a television drama "dwelling", so a series of measures introduced for the price, there are ten old country, new country five, plus a lot of pressure from local housing price measures.
High costs of direct intervention price In addition to suppress prices, the Chinese government to directly intervene in executive orders related to the livelihood of many commodity prices, of course, the cost of direct intervention price is high, such as intervention in petrol, diesel prices, the result is a row of trucks at the gas station a few kilometers the teams to buy diesel, but you can only buy a small amount of oil, a waste of time drivers. The Chinese government to suppress inflation, the impact of price suppression, the Chinese A share price is often a huge shock therefore, rumors, especially rumors of a rate hike.
Rate hike is a way to suppress inflation, but not the only way to sequelae did not light, because interest rates will attract more foreign hot money inflows into the currency to charge higher interest rates and exchange rates rise, which will increase the appreciation of the renminbi pressure.
November 2010, people's bank of china Governor Zhou Xiaochuan of "Traditional Chinese therapy" to describe China's economic control, is very interesting, worth considering. Zhou believes that western medicine is direct repression, to cure the patient, but the after-effects, side effects of many; Chinese Zeyi multiple drugs simultaneously, mild drug use, and then continue to observe the efficacy of medication is a treatment to cross the river by feeling the stones .
I believe that China Zhongyangzhengfu Zhou is also the method used to deal with the issue of China's economic control, that is, a quote medicine, there are many medicinal herbs, all ingredients are mild, try to see effects, adjusted for dose.
Chan Yan Chong
The author is director of the City University MBA program
From Apple Daily
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