http://www.bloombergview.com/articles/2015-07-30/china-s-stock-boost-could-make-life-harder-for-the-fed
It's time to call Beijing's aggressive stock-market intervention what it really is: quantitative easing, Chinese style.
With deflation pressures mounting, China's central bank would seem to have plenty of incentive to follow counterparts in Japan, the U.S. and Europe down to zero rates and beyond. Governor Zhou Xiaochuan has held off because of two overriding fears. First, an unknown number of companies might default on dollar debts if a full-fledged QE program depressed the value of the yuan. Second, that kind of stealth devaluation might scuttle Beijing's hopes of adding the renminbi to the ranks of the world's reserve currencies.
Instead of intervening in debt markets as the Fed, Bank of Japan and ECB have, China has thus targeted stocks directly. The goal -- to commandeer assets as a transmission mechanism to gin up growth and confidence -- is the same. Indeed, in some ways the Chinese strategy is even more direct about its aims.
This is the worrying part, though: Just as those other nations have, China is going to have a very hard time exiting from its easing program. And its difficulties are going to compound the challenges faced in Washington, Brussels and Tokyo...
MORE, AND IT'S NOT LOOKING GOOD
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