Yesterday’s NYT had an odd little article describing the net outflow of yuan and yuan-denominated assets from China, into other countries. Odd for two reasons: first, this mid-sized length article didn’t bother to offer any statistical evidence for this supposed phenomenon until the tenth paragraph of the story, and even then, it did so in a less than convincing spirit:
Total outflows in the fourth quarter were as much as $240 billion, but this is using the broadest possible definition and includes everything from capital flight to a slowdown in repatriation of overseas profits by Chinese companies. There is no good data assessing the motives of those moving money out of China.
Instead, the article, and its author (Keith Bradsher) offer a series of short, sharp anecdotes, highlighted by anecdotal accounts of Chinese traveling to Hong Kong to buy diamonds:
And in Hong Kong, wealthy mainlanders are turning up at jewelry stores in growing numbers seeking diamonds, big ones.
“They’re looking for five-carat diamond rings and six-carat diamond earrings — three carats for each ear,” said Yollanda Lam, the marketing manager for the King Fook jewelry store chain here.
Second, the article seems to skirt around the obvious issues. So, for example, this passage:
Another motive for money coming out of China may be simply a perception, among individuals and companies, that better bargains are available elsewhere.
Why? And where (outside of Hong Kong diamond shops)? The NYT article mentions an (undated!) over-subscribed tour of foreclosed US real estate, but otherwise the paper doesn’t seem too enthusiastic about pointing out what becomes obvious if you spend even a few minutes around financially flush Chinese: they want their assets in dollars, and now. Perhaps this is a function of the general sense of financial unease that currently plagues the US media (not to mention, its other citizens). But if the NYT is silent on the subject, the same cannot be said of the always essential Beijing-based Caijing, which – one day after the puzzling, half-assed NYT story – offered an unsolicited answer to the questions it posed. The title and subheading, really, say it all: Macro Review: Holding US Dollar Still Safe: None of any other major currencies is believed to perform better than the dollar in 2009. The lede completes the equation:
Worried about the U.S. economy and in a rush to sell your dollars? Do it after you can think of a more desirable currency to take its place.
To be fair, the Caijing article offers little more statistical evidence than the NYT piece, but – unlike the NYT piece – it doesn’t bury its uncertainty in unconnected anecdotes.
I bring this up for two reasons. First, I recently had dinner with a well-regarded European journalist (not a China expert) who expressed bristling contempt for the “life-sapping” fact-based approach practiced by American magazine journalists. Not that there’s anything wrong with facts, he suggested, but at some point a journalist not only should follow his instincts, but express them, and then get on with the next story (sounded like blogging to me). And second, this instance of Caijing v. NYT is one more example of a phenomenon that I’ve been witnessing more and more: given the freedom, the Chinese (English-language, original or translated) press can and does trump the resident foreign correspondent corps in China, both as reporters, and as entertainers.