Changes in China

Michael Pettis on the 17th Chinese National Peoples' Congress

If either of Bo (Xilai - current trade minister) or Zhou (Xiaochuan - Governor of the Peoples' Bank of China) are promoted onto the Standing Committee, I think we may end up seeing smarter and more preemptive activity in dealing with China’s monetary imbalance. If inflation figures for September and October stay above 5% or even accelerate I think we may see an acceleration of RMB appreciation even earlier than expected. This is all speculation, but like a lot of people in China I will be following the NPC rumor mill very closely.