ZHOU XIAOCHUAN sometimes sounds more like a zookeeper than a financial official. China’s central-bank governor has recently spoken of a menagerie of beasts stalking the economy, from black swans to grey rhinos and crocodiles. Chinese investors know what each refers to: swans are unforeseen risks; rhinos are neglected dangers; crocodiles prey on financial weakness. And they have surely all heard Mr Zhou’s warnings by now. In the past month he has commented publicly four times, making the case that debt is too high and that, without stricter regulation, China could face trouble.
Always a straight talker, Mr Zhou has been blunter than usual. To be sure, he insists that the economy is in good shape. But at a news conference last month on the sidelines of a Communist Party congress, he spoke of the threat of a “Minsky moment”—a concept named after Hyman Minsky, an American who postulated that stable economies end up crashing because of overconfidence that benign conditions will prevail indefinitely. In an article published on the...Continue reading
Source: China http://ift.tt/2mcceds
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