China Banker Rumor Refuted: What Does It Mean?

The Chinese love to game the media as much as the West. I prefer to follow the money and leave the talk to the media. Still where there's smoke there is fire. It's not exactly breaking news that China is getting a negative real rate of return on its Treasury holdings. Not every position is motivated by profit alone. At some point, however, the costs of holding these positions will outweigh the political and social benefits.

Rumors about the standing of various Chinese officials are likely to continue in the future and proliferate widely and rapidly across China’s vast pool of internet users,” Stratfor continues. “This is due to the uncertainties and potential disturbances relating to the mixture of increasing economic challenges, fierce debates about appropriate policy responses and China’s future path, and the upcoming leadership transition in 2012, in which the fifth generation of Chinese leaders will take power.”

Source: blogs.barrons.com