Shots fired the other day as global macro trader extraordinaire George Soros made an unequivocal statement about China’s inevitable hard landing. China struck back with a hilariously titled op-ed of sorts: ”Declaring war on China’s currency? Ha ha”.
But then they did something else that seems like it could be more consequential over the long-term. They announced an investigation of Wang Baoan, the head of China’s National Bureau of Statistics. A snarky friend of mine who covers Asian markets referred to Baoan as “the book-cooker in chief”. Basically he’s in charge of GDP and other pieces of official economic data that virtually no one believes in or trusts.
So the question is, what is Chinese government signaling here? Are they looking to wipe the slate clean and start over with more believable reporting on their own economy? Is this a way of announcing a reform of sorts without actually admitting that reforms were necessary? Will their data collection and reporting be getting an overhaul?
Beijing has aspirations of seeing the yuan become a global reserve currency. It’s obviously occurred to them that it’s not going to happen until faith is restored in the economy by outsiders. And not just faith in the strength of the economy, but in its veracity.
Two things worth reading: