Paul was joined by Derek Scissors from the American Enterprise Institute to discuss the current state of China’s financial system and the prospects for de-leveraging. Derek focuses on the Chinese and Indian economies and on US economic relations with Asia. He is concurrently chief economist of the China Beige Book.
Derek is a deep skeptic on the long-term sustainability of the Chinese economic model, and while he doesn’t predict a financial crisis, he views a lack of market involvement and direct competition to State Owned Enterprises (SOEs) as doing major harm to the economy. The meat of our discussion comes during the question and answer section, when the conversation moves towards the internationalization of the RMB and the consequences for the Chinese economy.
This discussion will certainly force you to think about the long-term structures of the Chinese economic model.
Founder, View from the Peak
IND-X Advisors Limited