Views: 678|Replies: 1

What Are "Structural Reforms" Really? [Copy link] 中文

Rank: 8Rank: 8

Post time 2015-5-12 12:39:42 |Display all floors
"Structural reforms" is basically what someone wants to change in the way a system operates so that it will achieve a goal that he or she wishes, in a subversive but "politically correct" manner, such that the system becomes what he or she intends it to be.

As such, "structural reforms" carry absolutely NO INTRINSIC MEANING.  It means what the speaker wants it to mean, wrapped in a candy wrapper called "structural REFORM", even if the changes are tantamount to a revolution, a coup or an inside job that shortchanges the public.

In the past, politicians have to justify their agendas based on "the public good", but now, it is no longer necessary to even consider the public good, as long as it is passable as a "structural reform".  Why?  Because by definition, reform is good, and therefore a "structural reform" must be good.  Unfortunately, what is called "reform" may not be "reform" but "subversion" and calling a wolf a "dog" does not make him a dependable household pet.

Thus, the justification for the overvaluation of the Yuan as being a necessary step or part of China's "structural reform" may be a dog, a wolf, or even a pig with no mind of its own.  But calling a deer as a horse is not being honest with the public.  In fact, in the tradition of Chinese statecraft, it is a form of treason.

With the glaring drop in exports, drop in the foreign currency reserves, and drop in employment, all following the overvaluation of the Yuan, it is clear that this "deer" is no "horse" and will not serve the interest of the Chinese people at all.

It is time for the political leadership to tell the deer traders and breeders, China's structure is doing very well, in fact so well it managed double digit annual GDP growth rates for many years.  If they want to quote Western wisdom, then how about this - "If it ain't broke, don't fix it".  The more these "structural reform" artists try to "fix" China's economy by continually revaluing the Yuan upwards, the worse the Chinese economy has become, until the crisis of factory closures, defaults, and layoffs are all within sight, rather that hidden beyond the far horizon.  It is time to tell the "fixers" that they are "fired."

Use magic tools Report

Rank: 8Rank: 8

Post time 2015-5-12 14:26:04 |Display all floors
Once again, the Western backers of the PBOC's erroneous and deleterious Yuan revaluation policy are out in force to provide counter-weight to the comments arising from websites like this, questioning the PBOC's attempt to hoist China up by overvaluing the Yuan, in order to effect the "structural reforms" of letting foreign banks and brokerages dominate the market-making mechanism of the Chinese financial markets, to allow them arbitrary capital inflows and outflows all in the name of being a "market force", no different from the pirates of yore who forced open China's sea ports in the name of Free Trade, in order to trade, what in effect was simply Opium, as vigorously defended by no less than Adam Smith himself.

Now, we are reading articles attacking the PBOC for not implementing "structural reforms" with greater vigor and speed, faulting the PBOC for allowing the Chinese economy to collapse because of it.  Wish only what they said were true, and the Chinese economy would not be collapsing so fast under the weight of an overvalued Yuan.  To speed this up merely hastens TAMII, which is what they really intend to achieve as they had done with their previous henchman, who was subsequently removed, but only after his true colors came out when the talked with Gorbachev about political succession.

It all means, Good News, there is still time to prevent the collapse of the Chinese economy.

This requires true political leadership, as Deng showed in 1989, and appointed Zhu Rongji to straighten out the inflationary mess left behind by his predecessor.  China will be headed to inflation if the PBOC continues to lower the interest rate and the reserve ratio, which is not the solution, because it does not address the cause of the deflation.  The cause of the deflation, according to several economists, is the overvaluation of the Yuan by some 30%, and it is time the Yuan is rolled back to a truly market-clearing value starting with 6.30, and down to 6.50, 6.60, 6.70, 6.80, and 6.90 if needed to grow the export and import trade to a balanced equilibrium, not the present trend of shrinking the export and import trade to a balanced nullity.

This does not require an act of PBOC.  It only requires an act of political leadership, because in the last analysis, as Deng realized, the buck stops in Zhongnanhai, on his desk, and he rolled back the Yuan exchange rate to 6.37 with the stroke of a pocket pen.

Use magic tools Report

You can't reply post until you log in Log in | register

Contact us:Tel: (86)010-84883548, Email:
Blog announcement:| We reserve the right, and you authorize us, to use content, including words, photos and videos, which you provide to our blog
platform, for non-profit purposes on China Daily media, comprising newspaper, website, iPad and other social media accounts.