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Although “Hot Money” Flees China the Red Dragon Will Emerge From Financial Crisis Unscathed
On the surface, it appears as though the Chinese economy is suffering along with the rest of the world. The economic crisis that has ensnared Western economies is expected to dampen Chinese exports and there is already evidence of capital flight.
But the real story is that China’s foreign exchange reserves – at $1.9 trillion – remain at an all-time high, and the outflow of capital, or “hot money,” will actually deflate many of the asset bubbles that speculative investment has created over the past several years.
Ultimately, the so-called “global recession” that many analysts have projected as a virtual certainty…
20Oct2008 | Money Morning | 1 comment | Continued
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