11-11-2007
Overheating China
| While Chinese are happily ignoring hopeless requests from western central bankers for a faster revaluation of yuan, there are signs that politicians are increasingly worried at surging inflation in mainland China. Last night they have increase reserve ratios requirements for banks, in an effort to curb liquidity. This fact, together with slumping equity markets around the world might very soon prompt a correction, for the Hong Kong and Shangai stock exchanges of proprtions that China has never witnessed before. The sooner the better. |