Many western people fearfully view China. China is seen as a great capitalist opportunity and as a geopolitical and economic rival. The numbers that come from China look far better than numbers from anywhere else. Why? Because it’s Standard Operating Procedure for most companies in China to keep two sets of books – and it’s customary to pay a higher price if you actually want tax receipts. In short: China numbers are like ENRON, but much bigger…
The horrible news today is that the best corruption watchdog: Caijing Magazine is slashing it’s scope of reporting by 20-30%. There will no longer be reporting on politics or social issues. Source: foreignpolicy.com.
In related news, Caijing does have a very interesting article about why the Yen failed to reach reserve currency status, and that article is eriely similar to the situation that China is facing right now:
In the 1960s, when the yen was fixed at 360 to the U.S. dollar, the Japanese economy grew at an average 10 percent per annum. In the 1970s, when the yen began to appreciate during an oil shock, growth slowed to an average 5 percent.
Following massive stock market and real estate bubbles after the 1985 Plaza Accord, the yen appreciated sharply against the dollar. In 1992, the Japanese currency rose to 128 to the dollar from 239. Appreciation continued until April 1995, when the yen hit 80, and then followed a reverse course until falling to 147 in June 1998, a decline brought to a halt only after joint intervention by the Bank of Japan and U.S. Treasury.