A late in the evening (US evening that is) piece from the WSJ
They compare the fall of GBP in 1992, helped along by speculators such as George Soros, but point out the bright side (bolding mine):
Britain devalued after squandering its reserves in a vain defense. Mr. Soros walked off with $1 billion or more. To the surprise of many, though, the U.K. economy soon picked up once the pound found its proper level.
But, says the Journal:
- China's battles with currency speculators are unlikely to end as happily
- Turmoil in the currency markets reflects a much more perilous imbalance than an overvalued yuan: China is now lopsidedly dependent on ever larger inputs of local bank credit to keep sputtering growth from declining further.
- "zombie" factories, empty apartment blocks, mothballed power stations and other infrastructure that nobody needs. But yet more wasteful projects are in the pipeline
- If debt keeps piling up at the current rate, China faces an eventual financial crisis, perhaps leading to years of subpar growth
- A sharp devaluation won't fix these distortions, and might even make matters worse if, as likely, it were to trigger financial mayhem in China's trading partners
Journal is gated: Yuan's Fall Is Just 'Noise' Amid Deeper China Woes
Some decent points in there. But ... I must say I am a longer term China bull, and also a bull who reckons a freer floating yuan would be of benefit. I know China is trying to restructure away from export-reliance ... but more exports might be helpful at present.
