Sometimes, dear readers, it seems to us that gangs are everywhere in China. In politics and in business, from Zhongxiang to Mianyang, we can hardly walk for all these in-groups jostling elbows over the next square centimeter of turf to add to their property portfolio.
We’re not just talking about literal gangs–but don’t let the lack of media attention fool you: There are plenty of those, too. Just take the eight of them that police announced this week had been nabbed in a money laundering and foreign exchange business tied to shell companies in Hong Kong.
That’s not the only way to criminalize cross-border capital flows, either. We expect regulators will soon begin peppering their policy papers and plenum pronouncements with invective against even offshore yuan trading, mark our words. Or better yet, mark those of traders this week who said the central bank had told them to suspend trading in certain products, seemingly to staunch capital outflows—which, we’d note, had already reversed direction as of last month.
But while the authorities may be all too happy to gang up on such traders, it hardly puts them in a better position to form their own with other nations. The latest response from Pacific Rim nations to China’s previously proposed free trade pact was tepid at best, as America’s own pro-trade posse met on the sidelines of this week’s APEC summit to discuss their new gang of twelve, the Trans-Pacific Partnership.
But soon China’s currency will likely join the most exclusive international gang of all—one whose membership the current administration has been hankering for from the start: The International Monetary Fund’s Special Drawing Rights currency basket. Will accession grant any particular benefits to China? No, but given that none other than managing director Christine Lagarde recommended the yuan’s inclusion, we’d say the deal’s going through regardless. (Just don’t act too surprised when China’s currency gets a smaller share than the other currencies, per word on the street this week.)
But not every gang is worth staying in, we’d wager. Sometimes you need to get out fast, as looks to be the case with Citic Securities, where a whole slew of corner offices have been vacated as authorities detain more and more of the firm’s top brass. One office they won’t have to clear out is that of the company’s chairman and party committee head, whose retirement was announced this week.
Not, of course, that such a timely exodus implies anything untoward, dear readers. But in light of recent revelations concerning the continued use of Chinese prisoner organs in transplants, we’d be hard-pressed to fault any executives who value their viscera for skipping town when the biggest gang of all comes snooping around the premises.
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