Fairfax's brilliant John Garnaut on the centrally-planned Chinese economy:
"The cost of having committees of politicians running credit, exchange rate and pricing policies, instead of economists or the market, is that they always act late, they often act arbitrarily and never act with nuance.
Within five months of the November 2008 stimulus package it should have been clear the Chinese economy had recovered and yet it took a further 18 months to take the foot of the monetary accelerator.
In November the leadership switched monetary policy from "moderately loose" to "prudent" and those rivers of liquidity have been rapidly draining ever since...
State firms were the winners when Beijing unleashed its unprecedented stimulus package after the global financial crisis, while private firms survived on crumbs dropped from the state sector table.
Now, as the credit binge is ending, bloated state firms will continue to be protected but efficient private firms face financial suffocation."
Other good Garnaut articles include this one on China Inc, and this piece on the statist left vs. reformist liberal war inside China.
