What's Missing in the China Story?

Dramatic events will always prompt breathless speculation and commentary, but real understanding should begin by paying attention to real experts. In the case of the Chinese economy, reading studies by China economists and analysts—for example Nick Lardy, Barry Naughton, Patrick Chovanec, Dan Rosen, Fraser Howie, George Magnus, Michael Pettis, and Victor Shih—would be a good place to start. They represent a wide range of views and, if brought together for a discussion, would be hard-pressed to arrive at a consensus; but anyone taking the time to read or listen to a constellation of them will inevitably become smarter about the Chinese economy. The other much needed commodity is humility. One of my favorite discussions of the Chinese currency devaluation is David Dollar’s interview in the Nikkei Asian Review. He argues that the devaluation is a “move toward a more market-oriented system but not a blatant effort to push up exports.” But, he then continues on to say, “If I’m wrong….” This ability to acknowledge what we don’t know with regard to China is at least as valuable as sharing what we do know—and certainly worth more than pontificating about that which we only think we know.