CentralBanking.com has awarded the PBOC the title of “Central Bank of the Year.” According to Deutsche Bank economist Jun Ma, “China’s overall macro condition today is one of the best in history.” In my mind, this is an especially impressive accomplishment considering where China’s economy has been within the past century. Specifically, enduring such economic struggles as KMT-induced hyperinflation, the failed Great Leap Forward (which misguidedly emphasized steel production, even to the degree of encouraging backyard steel furnaces which were a total waste of resources, and disregarded agriculture, which led to massive starvation), and the de-stabilizing effects of the Cultural Revolution.
However, not everybody agrees that the PBOC is deserving of the award. Alex Frangos, of the WSJ’s “Money Beat”, feels that the PBOC really didn’t accomplish much this year. He writes, “What did the PBOC oversee? Three credit crunches and possibly the slowest growth in 23 years…It’s a bit like Barack Obama winning the Nobel Peace Prize in 2009 before he had a chance to make his mark.” Regardless, the PBOC and the Chinese economy are certainly in good shape these days. We will just have to wait and see if the good times are here to stay.