"US slowdown threatens Chinese export growth"
I have said this before, and I will say it again. Only a little over 24% China's trade is with the US. So yes, the US slow down will hurt China, but NOT as bad as many people claimed. As a matter of fact, S. Korea and Japan and Taiwan will get hurt MORE from the US slow down than China does.
"My friend BC pinged me with these comments:
One can only imagine the extent of the bad loans that will now pile up in the Chinese banking system hereafter.
How many US and Japanese firms investing in China will want their deposits at risk in Chinese banks? How soon before these firms repatriate tens of billions of US$'s out of China and into US$- and Yen-denominated assets?"
Sounds like BC does NOT know much about China. Hot money from the West, although went into China illegally, has done China's economy MORE harm than good! Wonder who are buyers in those million dollar asset in Shanghai and Beijing? So Chinese authority would love to see the hot money going out of China ASAP!
"Asian Crisis II"? LOL, that won't happen in China. The most important reason for China to keep $1.4 trillion Foreign Reserve (more than China's current (maybe overestimated) GDP!) is to prevent something like 1997 Asian Currency Crisis happening in China! If BC thinks most of China's $1.4 trillion Foreign Reserve belongs to Foreign companies and Japanese firms, he is WRONG!
As matter of fact, Japanese capital have pulling OUT OF China for the last 3 some years! And Japanese product really does not sell that good in China either, due to their own effort to damage their own reputation. A survey done a couple of days ago showing Majority of Chinese tech. know-hows do NOT want to work in Japanese firms.
As for "US$ repatriation", same thing, China has TOO many US$ and do not know what to do about it. That is why they gave money to Blackstone to invest, bad move! So take back all those clown bucks belongs to the US and other Foreign firms ASAP will only do good for China.
Even until today, there are still so many people in the West claiming China's banks are going bankrupt if taking into account of bad debt. They are wrong. China's banks are actually healthier than MOST of the US banks! believe it or not! China's banks do have some bad debt, but they are the bad debt from Chinese OWN firms/individuals, NOT from Foreigners. And those bad debt is Nominal, is NO more than what you see on the paper!
And Most important thing is that China's banks owns LITTLE derivatives! So what you see is what you get. Unlike the US banks, they have larger amount of Level III/derivative assets than they do in real asset. This is a REAL equation for going bankrupt in days like now, when sub prime debt/Level III debt/derivatives winding down.
Yes, China's economy is far less sound than they seems, this is THE reason why China takes slow step in currency revaluation. |
