Remember that issue with the Chinese currency? As markets await this week’s economic data releases from Beijing, it is easy to be complacent over its mercantilist exchange rate policies, now concern is shifting to whether China has a hard landing ahead.
Foreign exchange reserves have stabilised at about $3.2tn. The renminbi has appreciated by about 30 per cent against the US dollar since 2005. Despite all this, however, the renminbi problem is still not a thing of the past.
The good news is that there is an opening for the reformist wing of the current Chinese leadership to follow the model of Deng Xiaoping’s protégé and former prime minister Zhu Rongji to look abroad to address the problem. It should do so, for the benefit of China and the world.