Today, the story in China is 'hot money', as reported by Geoff Dyer in the Financial Times.
Hot money, as you've probably heard, are funds that move from market to market chasing the highest short-term rate of return. In China, a country with tight capital controls, hot funds entering the country are illegal.
It falls to an agency called SAFE, The State Administration of Foreign Exchange, to police foreign funds flowing into the country.
And so, one assumes, it is in the interest of SAFE to report its own success.
According to the Financial Times:
"As a result [of rumors of large quantities of foreign capital flows], Safe said it had conducted detailed research to try and calculate the real level of hot money and found that it was relatively limited. 'We have not [shockingly!] found evidence of any large-scale capital inflows co-ordinated by any established financial institution,' the regulator said."
But here's the rub—also from the FT:
"However, the figures from the regulator will make it harder for Beijing to suggest that the inflationary pressures in the Chinese economy are the result of the build-up in liquidity in the international financial system caused by the US Federal Reserve policy of quantitative easing."
" In the run-up to the G20 summit in South Korea last November, when it looked that China might come under attack for artificially depressing the value of the renminbi, Beijing joined several other governments in accusing the US Fed of causing huge capital flows and inflation in the developing world."
It's enough to make you wonder: Is the absence of a free press really a material advantage— or does it merely provide government ministers the opportunity to take larger pratfalls?
Questions? Comments? Email us atNetNet@cnbc.com
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC