American, European and Japanese efforts to spark growth could devolve into a currency war, the Wall Street Journal (WSJ), on Wednesday, interpreted remarks by Gao Xiqing, president of China’s CIC sovereign-wealth fund. Japan should not use its neighbors as a “garbage bin”, Gao was quoted. The WSJ’s Lingling Wei suggests that [t]he focus on Japan and the yen has taken some heat off Beijing, long accused by critics of artificially holding down the value of the yuan, Wei wrote in an additional article on Wednesday. Gao said that [o]ur job is to preserve the value of the hard-earned savings of the Chinese people.
Ever since the establishment of the Bank of England in 1694, behind almost every big global change, there had been the shadow of international finance and capital, Fu Bilan (付碧莲), a regular contributor to (or regularly republished by) People’s Daily online, mused in an article published by PD online on Wednesday:
They master a country’s lifeline and hold a country’s political fate in their hands. By inciting political incidents, inducing economic crisis, they control the flow directions and the distribution of the world’s wealth. It can be said that a history of global finance is the history of a conspiracy of seeking domination over the wealth of humankind.
China’s central bank is well prepared to react to a currency war, adds Fu. However, a currency war could be avoided. The latest G-20 meeting had drawn a few lines, such as restricting monetary policies to domestic functions. The G-20 meeting had also expressed the hope that monetary policies would not lead to competitive devaluation. But either way, China had taken responsive preparations to meet with any realities of quantative easing (量化宽松) that might occur abroad.
And of course, Fu Bilan hopes for some guiding policy decisions from the Chinese People’s Political Consultative Conference and the National People’s Congress – both of who are currently holding their annual plenary meetings.
The – pretty long – article is much more technical than what these short excerpts might suggest, but I can’t help feeling that some of its paragraphs were written in celebration of the life of Hugo Chavez. The world of finance is evil, of course – with the exception of China‘s world of finance.
However, there also seems to be a reluctance to discuss what measures China’s monetary-policy planners have in mind to react to a currency war. One of China’s deputy central bank directors, Yi Gang (易纲), was quoted on Sunday with remarks about taking realities of quantative easing on the part of foreign central banks into account, but no details were mentioned then, either.
For the time being, the wargames, at least in the press, seem to focus on multinational institutions, and the obvious target, again, is Japan:
Japan’s prime minister Abe shamelessly delcared that a Japanese national should routinely be appointed as the post of the Asian Development Bank’s first director. China should team up with ASEAN and other countries to smash their fond dream.
China’s nationalist Huanqiu Shibao didn’t even have to think this latest little conspiracy in international finance up – they are quoting “The Sun” (太陽報) from Hong Kong.
Patriotism won’t provide you with detailed plans for a currency war. But it helps to kill time until it arrives.