Author: UYA

China thinks long-term on financial stability — so should we   [Copy link] 中文

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Post time 2018-7-30 05:54:12 |Display all floors
This post was edited by TruismStrike at 2018-7-31 03:08
UYA Post time: 2018-7-24 08:30
You are confused.
China debt is at 5 trillion.
While US debt is at 23 trillion.
US is king of debt.

Actually Chinese debt is said to be around or over 300% of GDP. China is emperor of debt.

And the biggest bubble in history in its real estate.

Your stats just show how much need the US has for China goods.

Not really. US exports/controls the IP rights to medicine, food, and advanced technology China can't live without.

Anything China exports the US can get for cheaper these days from a new factory in Vietnam, India, or Indonesia.

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Post time 2018-7-30 05:59:40 |Display all floors
This post was edited by TruismStrike at 2018-7-30 09:46
UYA Post time: 2018-7-24 08:30
You are confused.
China debt is at 5 trillion.
While US debt is at 23 trillion.
Another note....
China holds 2 trillion of US debt.
So that cuts China debt by almost half.

It doesn't get to decide when that debt is called though. And actually the US decides the real value of the debt by printing $$. So it doesn't work as leverage. And dumping it probably will have zero effect. It would just allow the US, its citizens, and other to make money off of china by buying the bonds that are artificially low from their dumping. US could just issue new debt to buy back its old debt on a discount...

And 2 trillions is probably only 3% or so of China's real overall debt anyway...


and any actually China seems to only hold about 1.12 trillion in US bonds. It lost a bunch of forex reserves around 2015.

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Post time 2018-7-30 16:12:45 |Display all floors
TruismStrike Post time: 2018-7-30 05:54
Actually Chinese debt is said to be around or over 300% of debt. China is emperor of debt.

And th ...

Ok.....
where did you get the figure of 300%?
And the biggest bubble in history in its real estate.

I read about this for the last 10 years....
never happened.
as the OP states, "most of the debt is in state industries".
Easy to absorb and control
Anything China exports the US can get for cheaper these days from a new factory in Vietnam, India, or Indonesia.

If this was the case....
The US would be buying from them in the first place.

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Post time 2018-7-30 16:15:18 |Display all floors
TruismStrike Post time: 2018-7-30 05:59
It doesn't get to decide when that debt is called though. And actually the US decides the real val ...

Are you telling me, the 1.3 Trillion $ American debt, China owns is meaningless and insignificant?

I think that is big muscle.

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Post time 2018-7-30 17:00:41 |Display all floors
UYA Post time: 2018-7-30 04:20
I disagree....
China provides significant trade all over the world.
To say China does not have suc ...
China provides significant trade all over the world. To say China does not have such global influence, is just "wrong".


Now you are talking of two different issues. Yes, China is a big source for cheap trade goods, but in terms of global financial stability (short or long term), far bigger source for that stability from China is the trade (and political) protectionism that China practises - and it does not translate to well-being of global citizens, only to global GDP average.

Explain, what long term policy does the US have?


To begin with, 4 years post limit for presidency (with option for 4 more) and similar terms for other politicians. Whether people like Trump or his policies or not, we will get rid of his person in a few years anyway, and his successors may or may not learn from his successes and failures.

As I wrote in my earlier comment in this thread, the differences of financial systems cannot be separated from differences of political systems, especially when talking about China in comparison to almost any other country.

While China clings to single party rule, it's political landscape beyond that is far less stable than in USA for example. Developments within past year, decade, or century are examples of that. Whether it is because of that or not, Chinese state seeks to enforce stability within the financial system instead.

In USA (and elsewhere) it is the other way around. The political system is more stable, while financial system is more self-governed by market mechanisms. States there usually try to steer the financial system by taking part in the market mechanisms, instead of controlling the system directly.

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Post time 2018-7-30 17:08:13 |Display all floors
Jaaja Post time: 2018-7-30 01:00
Now you are talking of two different issues. Yes, China is a big source for cheap trade goods, b ...

You are incorrect in a very big way.
It was the USA that started imposing tariffs on trade.
That is market manipulation, plain and simple.
China was forced to respond in kind.
The USA is abandoning its claim to supporting free trade, free markets, and worldwide competition.
There is no double speak that can change these truths.
If capitalism promotes innovation and creativity then why aren't scientists and artists the richest people in a capitalist nation?

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Post time 2018-7-30 18:26:27 |Display all floors
robert237 Post time: 2018-7-30 17:08
You are incorrect in a very big way.
It was the USA that started imposing tariffs on trade.
That i ...

Well you are in wrong thread.

This is not about added tariffs or trade wars, but the overal long-term contribution of each country's financial (and I argue political) systems to their own nations and into the globalized world.

In that context, China has applied and continues to apply tighter restrictions on foreign investments and exchangeability of its currency than USA or any western country. This is not about which country increases their trade protectionism more, but who has the bigger to begin with.

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