Commentary: China can well cope with U.S. rate hike

The recent U.S. rate rise has caused worry about its impact on developing countries. With growing strength, China could cope with it with a relatively easy mind.

With abundant forex reserves and a strong economy, China has lots of resources to use to maintain financial stability.

The underlying strength of the Chinese economy will stop the yuan from falling too far. The depreciation of the last two weeks was only a market phenomenon spawned by expectations of the rate hike.

Some worry that a recovery in the U.S. will suck money out of emerging economies. This is not true.

Cross-border money seeks higher yields, either higher interest rates from financial instruments or bigger returns from investment in the real economy. Narrowing the interest rate gap will not blemish the appeal of emerging economies because there are so many more opportunities to make money there these days.

China, for instance, has transformed itself from a factory of cheap plastic gimcrack to a maker of high-speed trains, satellites and supercomputers.

With innovation and consumption propelling the country forward, a smorgasbord of new opportunities to make money will present itself. Endi