China seeks Western take on its policies

[Randy W]

in the SCMP

 

China seeks Western take on its policies as it invites scholars to point out problems hindering country’s progress

External advisers set to assess country’s latest five-year plan at government forum on Saturday

 

“Unless there is adequate demand, if you move people from low productivity to unemployment, it doesn’t increase growth,” the Columbia University professor said before his expected attendance at a high-level government forum in Beijing on Saturday.

 

China’s key issue right now was demand, and supply-side measures such as cutting corporate income tax might fail to spur investment, he said.

Better, faster, stronger: China's new ambitious five-year plan aims to make the nation more efficient

 

In the long run, Stiglitz said, the political system should “co-evolve” with its economic system to ease social tensions.

“It would be difficult to run a modern economy if you try to control every aspect of the internet,” he said.

Jan Svejnar, a former economic adviser to late Czech president Vaclav Havel, said China’s gradualist approach in transforming its planned economy to a market-based one had “turned out better”, compared with the big-bang privatisation programmes in the former Soviet bloc.

 

 

[Randy W]

. . . and in the stock market crash

 

Revealed: China asked for US Fed’s advice on how it handled ’87 Wall Street crash amid turmoil in nation’s stock markets

 

The request came in a July 27 email from a People’s Bank of China official with a subject line: “Your urgent assistance is greatly appreciated!”

The People’s Bank of China New York-based chief representative for the Americas, Song Xiangyan, pointed in the email to a member of staff at the Fed to the day’s 8.5 per cent drop in Chinese stocks and said “my Governor would like to draw from your good experience”.

. . .

“Could you please inform us ASAP about the major measures you took at the time,” Song asked the director of the Fed’s international finance division, Steven Kamin in the July 27 email.

The message registered in Kamin’s account just after 11 am in Washington. Kamin quickly replied from his Blackberry: “We’ll try to get you something soon.”

What followed five hours later was a 259-word summary of how the Fed worked to calm markets and prevent a recession after the S&P 500 stock index tumbled 20 per cent on October 19, 1987.

Kamin also sent notes to guide Chinese central bank officials through the many dozens of pages of Fed transcripts, statements and reports that were attached to the email.

All of the attached documents had long been available on the Fed’s website and it is unclear if they played a role in shaping Beijing’s actions.

. . .

Kamin pointed out in his email that everything he was sending was publicly available.

“I hope this is helpful,” he said.

Edited March 22, 2016 by Randy W (see edit history)