China’s central bank walks a tightrope

Seven years on, emerging markets remain traumatized by the Federal Reserve’s “taper tantrum.” 

In late 2013, just the hint that the world’s most powerful central bank might trim asset purchases tanked markets from Jakarta to Johannesburg.

Fast forward to today. What happens if the tapering is being done by the developing world’s biggest monetary authority?

Multiple signals from Beijing suggest that the People’s Bank of China is on course to withdraw its Covid-19 emergency support. If that is the case, it is flying in the face of powerful headwinds.