Chinese Economics Thread

[taxiya]

Oooops, Sorry that was the old new here is an update to recent situation.

The whole "China's dollar reserve goes down" is just a self-serving sedative medicine for the panicked pepole.
These people dare not to ask the next question, where did the money go after China's dollar reserve (in treasure bond or bank account in US)? I have some possible answers.

1. To finance the newly created AIIB.
2. To finance the BRICS development found.
3. To finance OBOR
4. To be invested in the Silk-road development found 40 billion dollar (China investment only)
5. To be invested in CPEC.
6. To be invested (outside the frameworks above) in Europe, Africa, SE Asia. Railroad in Africa etc.

Last and most importantly, you have a severe self-importance mentality in that "if one dump me, one has nowhere to go, earth will stop spinning without me". The reality is different.

 

[manqiangrexue]

Last and most importantly, you have a severe self-importance mentality in that "if one dump me, one has nowhere to go, earth will stop spinning without me". The reality is different.

I don't agree with this part of your post at all. He hasn't even mentioned Japan's part in this. I feel it is completely opposite. Sam's excess schadenfreude is an indication of severe defeatism, as it signifies the belief that the only (or major) way I can progress in comparison to you is if you are pulled down, because I don't have the power to pull myself up. His actions are clearly out of insecurity fueled by Japan's relegated position in the world these past years (decades), the opposite of inflated self-importance.

 

[plawolf]

The whole "China's dollar reserve goes down" is just a self-serving sedative medicine for the panicked pepole.
These people dare not to ask the next question, where did the money go after China's dollar reserve (in treasure bond or bank account in US)? I have some possible answers.

1. To finance the newly created AIIB.
2. To finance the BRICS development found.
3. To finance OBOR
4. To be invested in the Silk-road development found 40 billion dollar (China investment only)
5. To be invested in CPEC.
6. To be invested (outside the frameworks above) in Europe, Africa, SE Asia. Railroad in Africa etc.

Last and most importantly, you have a severe self-importance mentality in that "if one dump me, one has nowhere to go, earth will stop spinning without me". The reality is different.

Indeed, there are a great deal of naivity or outright lies being spread about the meaning of Chinese ForEx reserve depletion.

Aside from all of the above examples, in my view, a far bigger and more important reason for the big falls in Chinese ForEx reserves was the IMF decision to make the RMB one of its global reserve currencies.

That development removed a significant reason for China to need to hold so much ForEx reserves in the first place. Especially in the face of US quantative easing shenanigans.

Holding too much ForEx reserves could be a double edged sword, especially if those foreign currencies depreciate sharply in value, as the USD and GBP both did since the 2008 financial crisis.

China lost an eye watering amount of wealth from US QE driven ForEx looses on the value of its foreign reserve holdings, and its unlikely to want to suffer that again anytime soon.

World wide, we are seeing a 'buying frenzy' as Chinese buy up property, physical and intellectual, companies and other non-liquid assets.

What does people think China was using to buy all that stuff? IOUs?

Yes, weakening exports and speculative pressures are forcing China to spend ForEx to stabilise the RMB, but that's far from the only, or maybe not even the main reason Chinese ForEx has been falling so rapidly and steadily.

 

[taxiya]

I don't agree with this part of your post at all. He hasn't even mentioned Japan's part in this. I feel it is completely opposite. Sam's excess schadenfreude is an indication of severe defeatism, as it signifies the belief that the only (or major) way I can progress in comparison to you is if you are pulled down, because I don't have the power to pull myself up. His actions are clearly out of insecurity fueled by Japan's relegated position in the world these past years (decades), the opposite of inflated self-importance.

I guess it is a misunderstanding, when I replied to SB, I took him as both Sam and Japan because as far as I know SB is a Japanese American or a Japanese citizen resides in US. Anyway, my reply focuses him individually, not towards a country or people.

 

[solarz]

Indeed, there are a great deal of naivity or outright lies being spread about the meaning of Chinese ForEx reserve depletion.

I find that to the western media, it doesn't really matter what the issue is, they're all indicative of imminent Chinese collapse.

Real estate or stock market go up: China's economy is a bubble.
Real estate or stock market go down: China's economy is collapsing.
GDP growth is high: China's growth is reckless and unsustainable.
GDP growth slows: China is entering recession.

 

[AssassinsMace]

We know how the media tries to make lemons into lemonade. Let's not forget the US interest rate hike. When you see how the media is trying to spin how it's bad for China, they're trying to tell China what to do without looking like they're begging for it. Reverse psychology. Remember how they were saying China was keeping US interests rates low because they're buying all these US treasuries? What's China been doing the last year to the point Japan is back being the number one holder of US debt? Yes people like Trump will spin how the market is optimistic because of him but then this is the guy that ran on how horrible the US has been doing despite under Obama where the market about doubled under his watch.

 

[Equation]

We know how the media tries to make lemons into lemonade. Let's not forget the US interest rate hike. When you see how the media is trying to spin how it's bad for China, they're trying to tell China what to do without looking like they're begging for it. Reverse psychology. Remember how they were saying China was keeping US interests rates low because they're buying all these US treasuries? What's China been doing the last year to the point Japan is back being the number one holder of US debt? Yes people like Trump will spin how the market is optimistic because of him but then this is the guy that ran on how horrible the US has been doing despite under Obama where the market about doubled under his watch.

That's the giz, the US media can never be trusted again. They are the mouth piece for special interest groups and hold no moral authority in geopolitical view points what so ever.

 

[AssassinsMace]

That's the giz, the US media can never be trusted again. They are the mouth piece for special interest groups and hold no moral authority in geopolitical view points what so ever.

And let's not forget how Trump threatened not to pay back what is owed to countries who bought US debt without negotiating better terms in favor of the US. And Carl Icahn said the US can just print more money (aka currency manipulation) to pay other countries what is owed to them.

 

[Jura The idiot]

I noticed through the most recent article on a major Czech news-server (

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)
Bitcoin Extends Loss After China’s Central Bank Warns Investors

• PBOC officials tell bitcoin platform to rectify issues
• Bitcoin surged 120% in 2016 as yuan depreciation quickened

Bitcoin extended Friday’s tumble amid concern China will

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rules on the digital currency to curb capital outflows.

The cryptocurrency slid 1.4 percent to $888 at 5:43 p.m. in Hong Kong, after falling as much as 10 percent on Friday. The People’s Bank of China’s Shanghai branch said in a statement late Friday that its officials, along with the city’s financial office, asked bitcoin trading platform BTCChina.com to conduct self-checks and rectify any problems. The State Administration of Foreign Exchange has scrutinized some major bitcoin exchanges, possibly to investigate the use of the digital asset to evade capital controls, QQ.com reported.

Bitcoin rallied since early 2015 as Chinese buyers turned to alternative assets to hedge against the weakening yuan and take cash out of the nation. By buying bitcoin onshore and selling it offshore for another currency, investors can evade the tightening scrutiny on fund outflows. Other than a ban on financial institutions’ involvement, Chinese regulators had largely taken a hands-off approach on the cryptocurrency.

“Bitcoin is one of the rocks they haven’t turned yet in terms of controlling the flows,” said Zennon Kapron, managing director of Shanghai-based consulting firm Kapronasia. “It’s inevitable that there’s going to be something but the question is what the regulations will be when it happens.”

This is not the first time China’s government has sent bitcoin tumbling. In 2013, it banned financial institutions from handling bitcoin transactions, sparking a slide in price. The PBOC reiterated that stance in Friday’s statement, saying that bitcoin is a virtual commodity without the legal status of a currency. It characterized recent bitcoin moves as “unusual.”

Bitcoin has become increasingly volatile since rallying to a record-high $1,162 on Thursday, slumping 11 percent that day after the yuan jumped. In December it surged 28 percent.

Policy makers are likely to require more reporting from bitcoin exchanges and incorporate their flows into the monitoring of the $50,000 quota Chinese citizens are given to convert yuan to foreign exchange -- though it will be more challenging to do so with the decentralized cryptocurrency, said Kapron.

BTCC -- which runs

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, one of the most active Chinese exchanges -- said in a statement on its website that it works closely with the PBOC to ensure that it’s operating in accordance with Chinese laws.

Huobi, another major Chinese platform, will also conduct strict self-checks as required by regulators and it plans to work with other bitcoin firms to establish industry standards, chief operating officer Zhu Jiawei said in a message. The industry can benefit from balanced, risk-based regulation, Star Xu, chief executive officer of OkCoin Co., said in an e-mail. The PBOC’s Beijing and Shanghai branches met with representatives of major bitcoin exchanges, including OkCoin, on Friday to discuss their operations, he said.

“The policy risks of bitcoin trading in China are higher” because the nation has capital controls, said Dong Dengxin, director of Finance and Securities Research Institution at Wuhan University of Science and Technology. “If bitcoin trading disturbs China’s financial order, there’s a possibility it will be deemed illegal or banned.”

Bitcoin surged 120 percent in 2016 as the yuan dropped the most since 1994 and Chinese bonds and equities declined, though its total value of around $15 billion still pales in comparison with most mainstream asset classes in the nation.

The digital asset traded at 6,188 yuan ($892) on Chinese firm OKCoin Co.’s platform, around parity to the dollar price based on spot rates. As recently as Friday morning, bitcoin’s yuan price had traded at a premium to its dollar price.

“Until there’s more clarity over what the PBOC is planning or what exactly they mean, I think it will be difficult for bitcoin price to retrace the rally,” said Kapron.

source:

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[Franklin]

WTF

China has finally made its own ballpoint pen tips after 5 years of trying

They’ve produced airplanes, launched satellites and churned out some of the best smartphones, so it seems almost incredible that China has been stumped by the humble ballpoint pen. Until now.

China, while being the world’s biggest manufacturer of ballpoint pens, has not been able to manufacture the pen tips without relying on foreign imports.

Taiyuan Iron and Steel, one of the country’s biggest stainless steelmakers, has announced that it's finally able to develop the pen tips after five years of trying.

Ballpoint tips require extremely high grade stainless steel and precision equipment, the company told the Xinhua news agency.

For years, China has spent millions importing the stainless steel and other equipment from Japan and Switzerland.

Beifa Group, one of the country’s largest ballpoint pen makers, said it has ordered the first batchof pen tips from Taiyuan, and expects to completely replace the need for imported steel within the next two years.

The issue has been a thorn in China’s side for years, with Chinese Premier Li Keqiang saying it reflected badly on Chinese manufacturing.

China even set up a national initiative to move its domestic pen makers up the industry value chain in 2011.

Now you can finally say that your pen is 100% Made in China.

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