Bernanke's Diagnosis and Prescription on China's Trilemma

choi

Ben S Bernanke, China’s Trilemma—and a Possible Solution. Brookings Institution, March 9, 2016 (blog).
http://www.brookings.edu/blogs/b ... 3/09-china-trilemma

My comment:
(a) The blog contains noting novel. But it is plain to read. In the end, there is no "solution."
(b) "However, increased private capital outflows also constitute a flight from the yuan toward the dollar and other currencies; that, in turn, puts downward pressure on China’s exchange rate."

"increased private capital outflows also constitute a flight from the yuan toward the dollar and other currencies"  This is what I meant two days ago (Mar 7) in the posting titled "Components of China's Currency Outflow (I)" that whatever the motives, "money outflow is money outflow." (the last sentence of the posting)
(c) "How can China resolve these conflicts? One approach would be to devalue now and get it over with. * * * The hit to the global economy and financial markets would in turn likely lead, counterproductively, to slower growth in China [due to slacking  global demand for Chinese-made goods]. Moreover, devaluation—by advantaging traded goods over nontraded goods—would work against the goal of promoting services over exports."
(d) In my view, what is new in his blog is the "targeted fiscal action" which, Mr Bernanke maintains, will benefit China both "near-term" and "in the longer term."  I, however, do not see immediate effectl probably it will takes years and lots of political capital to push it (Bernanke recommendations) though.