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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Mohan Marette who wrote (804)	1/14/1998 3:19:00 AM
From: danderso	Read Replies (1) \| Respond to of 9980

Bonnie Bear, who frequents the Mohan and Kahuna threads, has made a few statements about Chinese strategy being driven by a desire to transition from Hong Kong to Shanghai as the financial center. Just a pointer... Dave

To: Mohan Marette who wrote (804)	1/14/1998 6:58:00 AM
From: GuinnessGuy	Read Replies (2) \| Respond to of 9980

Mohan, -you wrote- "Craig, Stratfor or not, don't expect China to default on any dollar denominated debt any time soon as China coupled with Hong Kong has a massive foreign currency reserve,healthy by anybody's standard." Since you mention STRATFOR, I have found a passage in one of their daily updates that discusses China's reserves. In their opinion, China does not have very high quality reserves and so a meltdown ala Mexico is by no means out of the question. And, of course, if you remember Mexico, nobody, either in 1980 or 1995, thought that they were at the bottom of their foreign reserves. Here's the excerpt: "The Chinese obviously know they are in trouble. A report in Hong Kong's Ching Chi Tao Pao reports that the State Planning Commission is grappling with the problem of China's "hidden debt." According to a report by the Commission, much of China's foreign debt is not recorded by the State, because of false reporting designed to hide borrowing. This threatens China's ability to control its economic policy. Li Yang, Chairman of the Financial Research Center at the Academy of Social Sciences put it bluntly in September: "China's foreign reserve is not of high quality. In view of the substitutability between quality and quantity of foreign reserve, optimism in the scope of China's foreign reserve is not unconditional." He went on to say, "Nobody can guarantee that what happened or is happening in (Mexico or Thailand) will not happen in China." " stratfor.com BTW -- The founder of STRATFOR has enthusiastically accepted my invitaion to join in the discussion here. He has told me that asia is his specialty, so we're in luck. I'm not sure when to expect his presence as he is not yet a member of SI. I assume that membership is only a phone call away but since I've been around for over two years I've never had to go through the process. Craig