Regardless of the motivation, however, there was some negative reaction inside
More to the point, though, people started asking the question what
The most prevalent answer, if you are curious, is no, the Chinese should not be worrying about the rest of the world. Not a big surprise, most concerns are closer to home, quite literally. There is more interest in figuring out whether the experience in the
What is really interesting about all this though is that the real lesson may be exactly the other way around. The US, and European governments responded loudly, and hopefully effectively, panic stricken that the financial markets would collapse and leave everyone jobless. To look at the Shanghai Stock Exchange Index, which dropped from 6000 last October to 2000 this October, you would definitely conclude that
Though many people are calling for the Chinese government to do something about the stock market, it has not been quick to take drastic action. I have no doubt though, that should producers find demand dropping away for their product, the government would step in. Certainly such steps would be clumsy, the norm for a command economy, but they would be strong. The knowledge that this would be done might very well be enough to mean the action never needs to be taken. McCain and Obama talk about hatchets and scalpels. What the Chinese government holds in reserve is more like a bulldozer. That level of control is often problematic, but at times like this it comes in handy.