China Has Printed A Lot of Money

FT: China’s money supply growth dwarfs the rest of the world
“The Chinese money wall may well dwarf anything in the international financial system including unconventional monetary policy [such as quantitative easing],” says Mr Mandeng, who describes China’s growth of M2 broad money — a measure that includes cash in circulation, savings and time deposits — as “scary”.

This is a reflection of massive expansion of bank balance sheets in China. It’s a big, big thing and it is lost on most people,” he says.

...“The Chinese will have to print money. That is predicated on the economy growing quite fast and that you have quite a leaky capital account. If they print money, foreigners are likely to flee,” he argues.
I have no idea what the common wisdom on China is today, but considering few people were betting on the yuan devaluing only a few months ago, I will assume they are unaware. If that is the case, financial markets have a long way to go before they fully price in reality.

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