If you read Heisenberg (either in these pages or elsewhere), you should be pretty well versed in China's recent trials and tribulations.
The country has a tendency to move from crisis to crisis with remarkable rapidity as Beijing struggles to keep all of its many plates spinning.
There was, for instance, the stock market crash in the summer of 2015, when hordes of newly-minted day traders (who had managed to drive Chinese equity prices through the ceiling on the back of lunatic margin debt) found out that stocks can go down as well as up. Beijing ended up spending nearly CNY2 trillion to stabilize the market.
Then, just weeks later, the PBoC devalued the yuan, sending shockwaves through global markets and setting in motion a dynamic that has to date cost the country around $1 trillion of its FX reserves.
More recently, we saw how "fixing" one problem tends to create another (or two) when the PBoC's efforts to rein in speculation in the bond market by raising short-term funding costs ended up contributing to what I've variously described as a mini-meltdown in mid-December. As WSJ notes, China's bond market hasn't learned "how to correctly price risk."
But that's ok. Becaus
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