The yuan and the markets

“WHAT if we could just be China for a day?” mused Thomas Friedman, an American columnist, in 2010. “…We could actually, you know, authorise the right solutions.” Five years on, few are so ready to sing the praises of China’s technocrats. Global markets have fallen by 7.1% since January 1st, their worst start to the year since at least 1970. A large part of the problem is China’s management of its economy.For well over a decade, China has been the engine of global growth. But the blistering pace of economic expansion has slowed. The stockmarket has been in turmoil, again. Although share prices in China matter little to the real economy, seesawing stocks feed fears among investors that the Communist Party does not have the wisdom to manage the move from Mao to market. The rest of the world looks at the debts and growing labour unrest inside China (see ), and it shudders. Nowhere are those worries more apparent—or more consequential—than in the handling of its currency, the yuan.