Comment on "West sends inflation tsunami" (China Daily, Jan 31)

While I have found a great deal of evidence from other sources that support Dan Steinbock's analysis in the article that the West is trying to "inflate away its massive debt", I don't quite agree with his prognosis that this "massive financial tsunami may eventually sweep away the emerging and developing economies alike". That's because, in the case of China, it has a very different system with a very different set of checks and balances from the US, the EU and, for that matter, most developing countries.

The strength of China's system is that the government and the people can be unified to respond to an impending crisis. For example, the measures taken to dampen property speculation were comprehensive and undoubtedly designed to reduce the effects of hot money. Likewise the new rules being designed in relation to applying capital gains tax on qualified foreign institutional investors will also reduce the effects of the quantitative easing monetary policies of some Western governments.

Once the Chinese government decides firmly to act in the face of a looming crisis, it does and does so successfully. Take last year's main concerns, rapidly rising house prices and food inflation, for example. The government successfully curbed both.

I'm sure China will take further measures to deal with the "financial tsunami" created by both Europe and the US in their attempts, as Steinbock says, "to force the emerging world to accommodate drastic inflation and thus nominal rate depreciation".

Ross Grainger, via e-mail

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(China Daily 02/16/2012 page9)