How could this have happened, dear readers? We find the grisly remains of China’s financial reform program, eviscerated, beheaded, minced and generally just rather making a mess of things on the floor before us. Was it fate? An accident? Systemic regulatory shortcomings produced by half-measure reforms combined with a general lack of political willingness among the leadership to cede more power and actually allow market forces to play a productive role in the economy rather than forcing prices to simply serve at the party’s beck and call?
Or… murder most foul?
Certainly the potential culprits are legion. Perhaps it was those nefarious labor activists we’ve heard are stirring up trouble these days. But… no, they were arrested this week following a record number of worker protests throughout the country last year.
Could it have been the central bank itself? Certainly we’ve been getting strange signals from its various top officials, with notes suggesting slow going on interest rate liberalization, assertions the yuan fix wasn’t a result of a currency weakening policy, and reports that banks are being told to cut yields on their far more attractive wealth management products as the stock market plummets.
Ah, there we go: Perhaps it was retail investors, dear readers! No doubt you’ve heard all about how the Shanghai Composite Index this week fell below the lowest lows of this summer’s rout. We expect they’ve been shuffling what little funds they can out of stocks and into exchange-traded funds, gold and money markets with the express intent to stymie the noble reformist intentions of top regulatory bodies.
Or perhaps they’re pouring it all into theme park tickets, aiming to scalp them for a tidy profit when Shanghai Disneyland finally opens in June.
Maybe we’re thinking too small; could it have been the mighty State Council itself? We heard tell recently it was prepping to elevate its own finance department to ministry-level status. Perhaps all this tumult is really sabotage, presage to a reform plan backed by the council and carried out by its new regulatory authority in a bold grab at power!
Hm. Alright. We’re stumped. Wait! Maybe… Hong Kong book publishers?
There, there–we jest, dear readers. The true culprit was obvious from the start: The one percent! Just this week Peking University released a report that found the top 1% of China’s families owned a full third of its wealth. And whatever individuals might ultimately be behind this week’s regulatory implosion, dear readers, we can guarantee one thing at least: they’re holding the country’s purse strings.