Number One Reason China Has Begun to Scare Me

chinese-15511_640I haven’t really been too concerned with the recent market gyrations the past few days, but yesterday’s news that China is lowering interest rates again and is now easing bank reserve requirements by 0.5% is, quite frankly, troubling.

A few weeks ago I wrote in a LinkedIn Pulse piece that “…confidence in Beijing’s ability to support the equity markets may be fading, and the real issue is the underlying Chinese economy” but that we didn’t expect a sustained wider sell-off. Last week’s downturn, just as many started their end-of-summer vacations, set off what began to look like a wave of follow-the-sun mini-crises. Yesterday’s move shows just how immature China’s economic policy making really is.

To read why it’s so immature, click here to see the whole text in LinkedIn.

 

 

 

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