To do or not to do industrial policy is not the question. But how and by whom? Michael Pettis: "The US is already subject to aggressive trade & industrial policies but these policies have been designed at least as much abroad as they have in the US" carnegieendowment.org/china-financia…

WSJ: "Since last summer, cities across China have been doubling down on selling and leasing out state assets—anything from unused buildings and parking lots to mineral reserves." wsj.com/economy/housin…

China Daily: "China's manufacturing data put up a mixed performance in August, thus increasing the necessity of launching additional macroeconomic policy support measures to ensure the achievement of the country's annual growth target, economists and analysts said."

Interesting story about La Rioja creating a provincial currency effectively “pegged” to the Argentine peso. There’s a kind of double Gresham’s law going on here. bloomberg.com/news/features/… via Bloomberg Markets

Good Noah Smith piece on evaluating Biden's industrial police.

Great work Michael Pettis! We're honored to inform you that "Trade Wars Are Class Wars" made it to the list of best Global Markets books of all time! bookauthority.org/books/best-glo…

Yicai: "The total remuneration paid out to employees by China’s 42 listed banks tumbled in the first six months for the first time, and the average monthly salary also contracted, as banks’ net interest margin continues to come under pressure." yicaiglobal.com/news/salaries-…

I arrived in Phnom Penh a few days ago. I’m spending nearly four weeks here doing seminars at CamEd and meeting with policymakers in finance and commerce. Cambodia has a very unique history.

Bloomberg: “China should explain widening discrepancies in its balance of payments data that are obscuring growing global imbalances, a top US economist said.” bloomberg.com/news/articles/… via Bloomberg Economics

Bloomberg: Former People’s Bank of China Governor said his nation should focus on fighting deflation, in a rare admission by a prominent figure in China that falling prices are threatening the country’s growth outlook.” bloomberg.com/news/articles/… via Bloomberg Markets

3/3 It’s especially worth reading Brad Setser’s explanations of why this is happening, but it’s worth remembering that in the 1980s, Japan had an “alternative” FX intervention mechanism.