China’s Miracle Stumbles as Trump & the Almighty Dollar Approach. @GordonGChang. Anne Stevenson-Yang, J Capital Rsearch in Beijing.

Dec 22, 2016, 04:44 AM

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China’s Miracle Stumbles as Trump & the Almighty Dollar Approach. @GordonGChang. Anne Stevenson-Yang, J Capital Rsearch in Beijing.

The exaggerated reactions in China to the Fed move suggest the markets there are fragile, Beijing’s technocrats have no solutions, and that country is at the mercy of factors beyond its control. We start with the redback. The onshore renminbi, already weak, fell close to the 7-to-1 level, closing at 6.9467 to the dollar Thursday. Friday, it dropped again, landing at 6.9615. Bonds caught the worst of the Fed’s move. For the first time ever, the country’s benchmark 10-year and 5-year futures stopped trading Thursday. The People’s Bank of China, the central bank, injected the equivalent of $22 billion in short-term money, and that allowed trading to resume. ngIf: initialized && active end ngIf: initialized && active The yield on the Chinese government’s ten-year hit 3.4%, a 16-month high. “I think it’s not a sign of huge distress,”said Nicholas Lardy of the Peterson Institute for International Economics to CNBC. “The likelihood is the markets are overreacting to a very short-term development. http://www.forbes.com/sites/gordonchang/2016/12/18/yellen-tanks-chinas-bond-market/#781bb46f4fe8