Matters of changing perspectives
If one was ever in doubt as to the important position now occupied by China in the world economy, one would only need to observe the scale of coverage it receives from the global financial press, in academic circles and among international institutions.
The space devoted to China in, for instance, the International Monetary Fund's half-yearly world economic outlook or the Bank for International Settlements' (BIS) annual report far exceeds what it was even a couple of years ago, and tends to eclipse the coverage given to all but the largest of the advanced economies.
I have always enjoyed dipping into the BIS annual report, with its sober, but analytical and finely nuanced round-up of the world's economic performance and prospects, despite its length - this year's runs to some 150 pages.
It may, in deference to the central bank governors who sit on the BIS board, leave some things unsaid, but there is never any doubt as to what the reader is supposed to infer from between the lines.
In discussing China's economy, it says that 'the numbers describing the performance ... in recent quarters are truly staggering'. It acknowledges that the authorities face challenges of possible overheating.
It notes the stories about over-investment, and reminds us that China's place in the world economy has now reached the point where any slowdown in its imports might have discernible adverse effects on growth rates elsewhere.
It recognises concerns over the possibility of rising domestic inflation, and the impact of China itself on global commodity prices. It reviews the exchange rate dilemma but counsels against the simple solution of dismantling capital controls and letting the currency float, preferring the possible option of a revaluation followed by a fix against a basket of currencies - although cautioning against regarding even that as a panacea. But nowhere does the BIS imply that there is an imminent crisis, or that the Chinese authorities could not deal with one if it arose.
It has a sanguine view of the world as a whole, identifying a consensus of opinion that steady and essentially non-inflationary growth is in prospect. And China is, of course, a big part of that. We must all, especially in Hong Kong, hope that the BIS has got it right.
On a different topic, I ventured the opinion here on July 8 that, unless compelled to do so, leaders in London probably preferred not to court controversy over democracy for Hong Kong - a suggestion which no doubt led to the swift removal of my name from any invitation list at the British consulate here.
A fortnight later, British Foreign Secretary Jack Straw released the latest of the six-monthly reports on Hong Kong which he is mandated to submit to Parliament.
Encouragingly, it represented something of a sea-change, not simply by expressing strong concern over the manner and extent of Beijing's interventions in Hong Kong's constitutional development but, most significantly, by very pointedly not reconfirming the conclusion of the run of previous reports to the effect that 'generally, 'one country, two systems' is working well in practice'.
The mood of the latest report was echoed in Hong Kong in some plain speaking about the situation from Consul-General Steven Bradley, earning his colours by provoking predictable outbursts of indignation from a couple of mainland officials.
Yet, one is still left wondering whether Britain can ultimately pack much punch in this arena. The report's closing paragraph, saying that it will 'continue to follow developments closely and to take appropriate action to fulfil our commitments', begs a number of questions.
For readers who have ever followed the classic satirical television series, Yes Minister, it may even strike an uncannily familiar chord.
Tony Latter is a visiting professor at the University of Hong Kong
