I love this bit.
Would the government allow all this to happen?
Eventually, we believe that the Chinese government can handle any potential financial market turmoil in China this time because of high domestic savings. However, this doesn’t mean that the ride will always be smooth.
One of the biggest misperceptions about China in our opinion is a belief that the government is monolithic, and run by “a few wise men in Beijing” whose policies are followed to the letter. In our view this could not be further from the truth (A big misperception about China, 23 Feb 2010). Many policies in China are the result of negotiations and compromises between different interest groups, and the policies are often behind the curve and sometimes bring about unintended consequences.
Our overall thesis is that the government has been too aggressive applying both monetary and fiscal stimulus to counter the last global financial crisis and that we are now living with the unintended consequences, chiefly among them economically, high inflation pressure and instability in the financial market.
Cui BAC Part 2 - Cleanv