Stop China's market manipulations

Washington

THE other day while I was crossing the street in Beijing, a car almost flattened me. Both the driver and I were outraged at the other's ineptitude. In China, if you want to avoid being hit, you keep your head down and avoid eye contact with the oncoming driver, since looking at him would signal that you saw the car and know you should let it pass. In the United States, the opposite rule applies: Making eye contact confirms that the driver has seen you and should yield to the vulnerable pedestrian.

Something similar is occurring now between China and global financial markets. Billions in yuan and US dollars could be lost while trying to untangle the lines of communication.

Chinese bureaucrats believe that they have the right to intervene in their country's economy whenever they want, not only to promote certain industries but also to prevent sudden downturns and reduce volatility. Officials believe that they do not have to defend or explain their decisions in real time to market participants. In fact, being opaque preserves their discretion to make changes …