The Pentagon cares as much about how money moves around the world as it does about the movement of arms. Small wonder the recent bobbling in Beijing’s economy has caught the armed services’ attention.
After owning bragging rights to one-third of global economic growth, the Chinese economy just hit a major speed bump. Growth slowed. The market nosedived. The People’s Bank of China (PBoC) devalued the renminbi by about 4 percent, the currency’s biggest drop in two decades.
Global economic disruption that might lead to armed conflict remains a fixture on the Pentagon watch list. Since the 1997 Asian Financial Crisis sparked a round of alarms, the Pentagon has kept one eye on its gun sights and the other on global markets.
Beijing’s recent financial woes have triggered warnings that the end may be nigh for the uber-bullish dragon economy. China watcher Gordon Cheng, for one, argues that the day of reckoning might be at hand. But others caution that we should not confuse a “hard landing” for the high-flying Chinese stock market as a harbinger of a collapse of the world’s second largest economy.