Wednesday 16 April 2014

Thursday 10 April 2014

China: Reform Policy vs. Optimal Policy

Reacting to New Growth Model

I had a much much longer post sketching out my concern with the Chinese hard GDP and Inflation target. My worry was that the CPC would subordinate reform progress in order to the achievement of GDP targets. I'm still wandering around the Philippines and haven't been following too closely.

My hope was for a move off of a hard target. Even if just a signal from the government to set the stage for a miss. The need for China to rebalance remains priority number one in my eyes. The reaction to a perceived miss on current GDP might lead to a policy response that would be more likely to produce sub-optimal future GDP numbers (due to failure to rebalance).