Fed throws China a curveball just when it seeks stability

So far, Beijing’s ability to keep its markets steady appears to be working.

CHINA'S capacity to maintain stability in its financial markets is being tested by the Federal Reserve’s sudden hawkish shift.

Beijing has repeatedly voiced concern that liquidity-fueled bubbles overseas would burst when monetary conditions finally started to tighten. Bullish speculation domestically already prompted intervention by Chinese authorities, particularly in commodities.

As such, a move by the Fed that starts to head off such a risk would be welcomed by the Communist Party, if its 100th anniversary wasn’t days away.