We have a couple of big dates coming up, dear readers, so make sure you’re paying attention from next Monday through to Wednesday morning. First up is the eighth US-China Strategic & Economic Dialogue to be held in Beijing June 6-7 which we would guess will be quite a show. It’s been a long time since there were so many tricky issues for the representatives of the two countries to maybe discuss, but more likely argue over. There is the RMB rate of course, which is sliding again, and the mammoth economic overhang of China’s apparent determination to share its over-capacity problem with the whole wide world. There is the South China Sea and cyber-hacking and the environment and a whole bunch of other fun topics.
Next we have the announcement, also on June 7, of the MSCI global index decision on the inclusion or otherwise of China A-shares. Given what looks to our jaded and inexpert eyes like jolly levels of manipulation of stock prices even in the past week, we would agree with the Sinocism view that a decision to include them would be “insane,” but insanity cannot be ruled out in these weird times, and we can imagine the responsible officials in the relevant departments making persuasive arguments that the thin edge of an A-share wedge being inserted into the MSCI global indices would not really be a big deal, surely? What to make of the the sudden rise in the key Shanghai index this past Tuesday morning from 2,800-ish to above the 2,900 mark? Perhaps insider information on the way MSCI will jump? Or perhaps the National Team creating a cushion in the event of an MSCI “no” decision, along with possibly nasty fallout from the US-China Econ confab? Or maybe even positive investor sentiment? You’re right, that last one’s a long shot in the market, but who knows, dear readers? We are all but innocent bystanders on this drama. If anything, things are likely to get even more dramatic over the next few months. The stakes are already high, and we’re still 18 months away from the 19th Party Congress. Speaking of which, it won’t be long before we start reading about how jockeying ahead of that meeting are a factor in all sorts of areas. Who needs TV or even YouTube with so much to follow? Have a good weekend!