The IMF’s Article IV on China.

It suffers from one obvious problem.  It is dated.  The IMF completed this report in early July, and it is now almost November.   China’s current account surplus simply is not going to be $180b.  Q3's trade surplus showed  that.   It will be far bigger.   If the IMF thinks the ability to its analysis to stimulate public debate is central to the impact of its assessment, particularly for countries that are not likely to borrow from the IMF, it needs to shorten the lag between finishing the report and releasing the report.   Yes, Board debate is important – but, well, could this still have come out a bit earlier? 

I am eagerly looking forward to the staff report (mentioned in a footnote) which will explore the reasons why China’s current account surplus exploded in 2005.    Among other things, the IMF Article IV indicates that if you adjust for reserves shifted to ICBC and for swaps with the banking system, China’s 2005 reserve growth was $236b, not $208.   That is useful information for reserve-obsessed people like me – among other things, it implies I actually was slightly underestimating China's 2005 reserve growth (the swaps were larger than I had estimated), and thus slight underestimating global reserve growth.

The IMF also notes that China's July revaluation against the dollar has had virtually no impact on China's real exchange rate: "on a real effective exchange rate bases, the renminbi by May 2006 had returned to roughly its June 2005 level despite the revaluation."   Why?  The change in the RMB/ $ was offset by changes in the $/ euro -- and by higher inflation in the US.  Updating the calculation through the end of October wouldn't change much.   The RMB would still be about 15% below its early 2002 levels.

What else jumped out at me as I skimmed the report?