Beijing

Late last month in “South Pacific Showdown? Japan May Send Warships To China Islands,” we documented a meeting between Japanese PM Shinzo Abe and Philippines President Benigno Aquino on the sidelines of the Asia-Pacific Economic Cooperation summit held in Manila. 

The two leaders discussed the possibility that Japan could provide Manila with “large ships” that the Philippines can use to patrol the South China Sea. 

This was, of course, a direct response to China, whose land reclamation efforts in the Spratlys have ruffled more than a few feathers in the South Pacific. 

It was exactly one week ago today when we reported that Guo Guangchang, a self-styled Chinese Warren Buffett worth some $7 billion, had disappeared. 

For those who follow developments in China’s capital markets, it was obvious what had happened. Guo was swept up in Xi’s campaign to root out misconduct tied to the country’s equity market meltdown and subsequent government-engineered rescue effort. 

When we first detailed the link between a devaluing currency, increasing restrictions on outflows of China capital, and Bitcoin, the virtual currency soared (driven by Chinese flows, just as predicted). The last few days, as China has once again started devaluing its currency, authorities once again moved to tighten capital outflows - this time through caps on credit-card withdrawals (as warned here) - and sure enough, Bitcoin has been soaring recently.