The Chinese media have been gunning for George Soros for predicting a ‘hard landing’ for the country’s currency. A headline in the People’s Daily is mild by comparison with some of the invective: ‘Short China and you short yourself.’ But who believes Soros is getting ready to short the renmibi, as he did sterling in 1992? He said nothing in Davos last month about betting against the renminbi.
In the summer of 1997, one Asian currency after another fell. With the financial crisis in full swing, rumours circulated in Beijing that George Soros had placed a bet with China’s prime minister, Zhu Rongji. It had no repercussions in the currency markets, because Soros couldn’t short sell renminbi, as he had with sterling five years earlier: China’s currency was, and still is, not fully convertible. But Soros is said to have bet $100 million that the People’s Bank of China (PBOC) would not be able to defend the renminbi’s parity with the dollar. It did and he lost. China’s currency has been appreciating ever since – until last week, that is.
Voters in Spain have put two outsiders in the office of mayor in Madrid and Barcelona. Both are strong, popular figures heading parties associated with the new Spanish left. Both are women. The similarities between the two candidates and the two cities end there.
Sanctions and low oil prices are forcing Russia to give some serious thought to China. On a recent trip to Shanghai, the owner of a Russian pipeline fittings business was surprised to find three Chinese suppliers of 48-inch ball valves able to withstand 250 bar and 370ºC. ‘I have been lazy for too long,’ he told me. ‘The valves I’ve been buying from Germany, the Czech Republic and Finland were actually made in China: the only difference is that these ones come with a Chinese logo; and they’re 60 per cent cheaper.’
The regional government of Catalonia has backtracked on its promise to hold a non-binding independence referendum on 9 November. Instead it is preparing to hold a symbolic vote, with no electoral roll and volunteers staffing the polling booths. This modest alternative was forced on Barcelona by the constitutional court in Madrid, which agrees that the Spanish government has a legal case against the referendum. Now that it’s gone to deliberation, a real referendum process is automatically suspended. But it looks now as though even a symbolic vote will be challenged.