"No pains, no gains for China's economy"
which could be translated to: "Deflating Bubbles is actually OK!"While many dismiss CCTV (China's state-controlled incarnation of CNN) as an arm of Chinese government propaganda not even worth watching, I believe that this time, it might be different.
Apparently, China's new leadership has decided that the emergency liquidity measures and stimulus packages taken on during and after the crisis of 2008 have created lots of bad investments and - who would have thought that: a credit bubble!
Therefore, as any good incoming executive, the new leaders can now conveniently blame the old leadership and try to restructure and correct the debauchery of past times:
Please see here:
"It is time to deflate bubbles and restore normal practice.
[...] The road-map is clear. [....]
If long-term gains can be secured, short-term pains will be worth it."
http://english.cntv.cn/20130626/106782.shtml
http://english.cntv.cn/program/bizasia/20130701/105152.shtml
It might also be interesting to see how PBOC Governor Zhou Xiaochuan had been quoted in his speech on Friday:
"[....]the People’s Bank of China will continue its prudent monetary policy with timely adjustments."
http://english.cntv.cn/program/newshour/20130629/102553.shtml
http://english.cntv.cn/program/bizasia/20130628/102249.shtml
And here's what had happened recently in Chinese Interbank lending rates:
I am still wondering whether Communist Engineers will finally be able to do what no Capitalist Economist had ever been able to achieve: a central-bank engineered "soft landing" of a major economy while deflating a credit bubble.
But again, the CCTV talking heads are already warning about some minor pain to come, non?
