China Acts Like a Grownup, US Gov Should Pay Attention

The irony is delicious. 

Many people unfamiliar with recent economic history walk around each day with the notion that investing in a foreign country like China, whether through debt or equitites, is inherently more “risky” than owning US-based stocks or bonds.

Indeed, this was one of the first things most of us were taught on The Street early on.  Funny how things have changed.

The news overnight out of China is that the authorities are telling the banks that they must now raise reserve capital to meet new higher requirements.  China watched how our real estate boom/bust cycle played out and apparently, they’d like to be more responsible than we were.  This comes on the heels of a moratorium on new commercial bank loans that China mandated in January.

Soft landing or not, China is preparing itself to weather any unforseen hiccups in their growth machine.  If only American regulators and pols had acted with even a trace of that maturity.

Read Also:

Yesterday it was Greece, Today it’s China (DJ MarketTalk)

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