Just when China's leaders receive conflicting signals of "overheating" and "below-potential growth", they encounter tremendous external pressure to revalue the Renminbi (RMB) substantially. Our conclusion is that the major macroeconomic challenges have their roots in China's inadequate...

In 2008–09, the USA and the UK undertook quantitative easing to drive interest rates to near zero to combat the global financial crisis, and China increased the growth rate of base money slightly. The resulting credit growth was very slight in the USA and UK but very large in China. The US and...