Who really directs Chinas economic policy?
[Chinese Premier] Wen Jiabao is the focal point on financial policy. Helping him is [Politburo member] Huang Ju. The financial-policy side gets [Wen’s] personal attention, but he is also responsible for the overall economic policy. Do you expect that China will raise interest rates? I don’t see it happening today. But after the U.S. raises its rates, [China] will have more flexibility. If [Beijing] moves interest rates, then [upward] pressure on the yuan will be even greater. Do you expect Hong Kong to adopt the yuan as its currency anytime soon? Even when the yuan becomes fully convertible, I don’t see us using it rather than the Hong Kong dollar. It’s a currency we are all familiar with, and our dollar is pegged to the U.S. dollar. I don’t have any intention of reviewing the peg]. Can Hong Kong ever return to the 2% unemployment level seen before 1997 now that the current rate is 7.1%? It’s going to be a huge challenge to get unemployment down to those levels: 2% is not healthy. I th
