From Ben Bernanke's Blog: China’s transparency challenges
March 8, 2016 10:00am
On August 11, 2015, China simultaneously announced changes to its
exchange-rate regime and devalued its currency by 1.9 percent against
the dollar, a surprise move which sparked market selloffs. Traders
apparently inferred that the Chinese leadership knew more than they did
about Chinese growth prospects and had devalued to offset weakening
domestic demand with increased exports. On the surface, there was no
need to guess about Chinese growth: Only a few weeks before, China had
announced its second quarter figure was right on target at 7.0%. But to
many, this announcement had seemed too good to be true, provoking a flurry of skepticism in the international press.
Are China’s growth numbers wrong?