Keanu Reeves, damsels, and the PBoC
“Damsel in distress” is one of those enduring and recurring themes in literature; its tropes of crisis, sacrifice and salvation reveal help us landscape the human condition. It was perfected in 1994 by Keanu Reeves and Sandra Bullock in the hit movie “Speed,” which critics still regard as the greatest piece of art ever created. In the movie, a bomb strapped to a city bus will explode if the vehicle goes under 50mph. The bad guy tells the police that only Keanu Reeves – or a movie character played by him – can save them. And so it was with China’s bankers and investors – those poor, helpless things – as the purchasing managers’ index threatened to dip below the sacred 50 mark, indicating contraction. Fortunately, China’s central bank had a trick up its sleeve, sneakily loosening banks from their required reserve shackles the night before.
And that wasn’t the only rescue in China this week. Coach potatoes, constantly abused by marketers, were saved by the strapping-yet-cranky folks from SARFT (China’s TV regulator), which bravely issued new rules preventing ads from interrupting their cinematic experiences. Embattled property developers, in risk of losing their Bentleys, were helped along by Beijing officials discreetly re-defining the word “normal”. And a big dollop of Chinese financial funding saved the IMF from, well, Europe. Which will, in turn, be imminently saved by Keanu Reeves…. and so the circle of life continues.
A red Christmas
China is getting into the Christmas spirit early as it donned a red suit and white beard this week and got busy drawing up its list of who has been naughty and who has been nice. Economies and agencies lined up around the block, as giddy as school children to ask for that loan or capital injection that they’ve had their eye on all year. First in line was snot-nosed Ecuador, which promised to be good if China would grant a US$1.7 billion loan, after all what’s that on top of the other US$7.3 billion in years past? Then came the United Kingdom, which came away with a promise of a few trains and boats to play with, and maybe some more for its European friends. A wink and a nod indicated China would see the IMF get some funding too, on one condition: None of the money can go to the IMF’s hooligan friend the EU, which has been acting out all year and shouldn’t expect much more than a lump of coal – a measly gift considering Santa capped the value at US$126 per metric ton.
Just as all this merrymaking was beginning to warm our normally frigid hearts at CER, leave it to a scrooge like Hillary Clinton to try to ruin it with a big “Bah, humbug!” The US Secretary of State warned that countries taking gifts and cozying up to China during this global Christmas party could risk waking up the next morning regretting its decisions and less a few natural resources. But troubled countries and agencies seem unlikely to take the advice and more likely to leave swearing off Chinese aid to their lists of futile New Years resolutions.