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Fed’s rate rise: little impact on China

The rate hike operated by the Fed should not lead to particularly negative consequences for China. In my view, the main reason for this is that China, contrary to the common narrative, is adopting measures to take a step back from reforming the financial system. The RMB exchange rate, domestic interest rates, the internationalization of the RMB and the opening of the capital account are all initiatives that were proudly heralded until a few months ago, while now they are, instead, experiencing a turnaround. No more openness but re-trenching.