Wise words from El-Erian:
“The Chinese
leadership is discovering that financial markets have a tendency to punish
governments for doing the right thing at the wrong time. …
Just a few weeks
ago, Beijing moved to make its exchange rate setting mechanism more flexible.
This decision — which had been advocated to Chinese officials for years by
economists and US governments — is an important step in the country’s
multi-decade journey towards a truly market-based system. …
From many
dimensions, this was a good policy step. The problem is that it was implemented
at the wrong time.”