Since its devaluation in August 2015, the yuan has depreciated 6.9% against the dollar. After losing about $800 billion of its foreign reserves, China has managed recently to slow capital flight. But the stability came “at the cost of delaying reforms,” said Hung Tran, executive managing director at the Institute of International Finance. To sustain growth, China has postponed overhauls of its state-owned enterprises, many of which are plagued by overcapacity and bad debt. Private fixed-asset investment in June and July registered back-to-back monthly declines from year-earlier levels, the first time that happened since at least 2012. The country’s total debt has climbed to 298% of its gross domestic product from 274% a year ago. A net $55 billion left China in July, according to Goldman Sachs Group Inc., compared with an estimated $49 billion the previous month.
More: Chinese robot makers are heading towards a debt-filled crisis. Growth in demand for industrial robots in China fell by more than 2/3 to 17% in 2015 and yet more than 40 robotics parks have sprouted throughout the country in the last 2 years. Earlier this year, a robot monk that can chant religious mantras, move via voice command and hold a simple conversation was installed in a Buddhist temple near Beijing.
Unfun bonuses: Good piece by Spengler on foreign policy. As for domestic policy, we’re amused by the huffy, self-described constitutional conservatives who blather on about “limited government” when government is spending $7 trillion a year, and putting out over a million pages of regulations per decade, including these lovely contributions to limited government. Great job, guys!