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Money talks, and China's in serious trouble and it desperately needs to cooperate with US. That's why the Chinese president came to US to resolve issues with c

Money talks, and China's in serious trouble and it desperately needs to cooperate with US. That's why the Chinese president came to US to resolve issues with cyberhacking. - $141.66bn capital left China in August http://bit.ly/1jh7E7z http://bit.ly/1jh7E7z - "by 2018 all of China's excess reserves — cash that it has on hand to use immediately — could be gone." http://read.bi/1jkK6hv http://read.bi/1jkK6hv - "actual Chinese GDP is probably a third lower than is officially reported" http://bit.ly/1JsjaC0 http://bit.ly/1JsjaC0 - "The exodus of factories moving out of China in search of lower-cost options in southeast and central Asia is accelerating, as manufacturers face increased pressure to reduce unit costs." http://bit.ly/1hw8Zp3 http://bit.ly/1hw8Zp3 - "average new home prices in China’s 70 major cities dropped 6.1 per cent" http://bit.ly/1jh9eGp http://bit.ly/1jh9eGp - "Total debt has reached 282 percent of GDP" http://bloom.bg/1evYSQ5 http://bloom.bg/1evYSQ5

toomuchtodo 11y ago
Wow, those are absolutely terrible economic indicators. That's not just reduced GDP; those are recession numbers.
- sharetea 11y ago
  If you think that's terrible, this would be frightening. http://www.thestar.com.my/Business/Business-News/2015/10/10/If-you-think-Chinas-equity-bubble-is-scary-check-out-bonds/?style=biz http://www.thestar.com.my/Business/Business-News/2015/10/10/... "While an imminent collapse isn’t yet the base-case scenario for most forecasters, China’s 42.2 trillion yuan (US$6.7 trillion) bond market is flashing the same danger signs that triggered a tumble in stocks four months ago: stretched valuations, a surge in investor leverage and shrinking corporate profits. A reversal would add to challenges facing China’s ruling Communist Party, which has struggled to contain volatility in financial markets amid the deepest economic slowdown since 1990."
  - toomuchtodo 11y ago
    I am now sufficiently frightened into making changes to my personal financial strategy based on this (no longer contributing additional funds to non-retirement investment accounts, instead directing those funds to paying off debt at a faster rate). Shit appears to be getting real shortly.
huac 11y ago
That the Chinese government likely over-estimates GDP is widely known (some indicators are reported magnitudes faster than any other country). The increased debt and factory exodus are probably uniformly bad. On the other hand, a decrease in cash reserves is almost certainly in China's favor. The government has been struggling for years to get rid of its enormous US currency holdings. Especially as we start to see the yuan strengthening and the Fed raise interest rates, it's important for China to extract as much value out of the USD as soon as possible.
- sharetea 11y ago
  1.) Dollar is strengthening. Janet Yellen said she'll raise rates by the end of the year. Most emerging market currencies have crashed 25-40% this year. 2.) Yuan is weakening. Otherwise Chinese corporate dollar-denominated debts, which is around 1 trillion, will crush the economy right away when the fed raises rates. Plus the government already signaled it is willing to guide yuan lower a month ago. 3.) That's kinda like saying 'well, my 3 houses in the hamptons are burning down, but at least wood structure is the strongest right now!'
  - huac 11y ago
    Hmm. Haven't followed the econ beat in the last couple months, my bad. I don't follow your 3rd point though. What do you mean?

toomuchtodo 11y ago

Wow, those are absolutely terrible economic indicators. That's not just reduced GDP; those are recession numbers.

sharetea 11y ago
If you think that's terrible, this would be frightening. http://www.thestar.com.my/Business/Business-News/2015/10/10/If-you-think-Chinas-equity-bubble-is-scary-check-out-bonds/?style=biz http://www.thestar.com.my/Business/Business-News/2015/10/10/... "While an imminent collapse isn’t yet the base-case scenario for most forecasters, China’s 42.2 trillion yuan (US$6.7 trillion) bond market is flashing the same danger signs that triggered a tumble in stocks four months ago: stretched valuations, a surge in investor leverage and shrinking corporate profits. A reversal would add to challenges facing China’s ruling Communist Party, which has struggled to contain volatility in financial markets amid the deepest economic slowdown since 1990."
- toomuchtodo 11y ago
  I am now sufficiently frightened into making changes to my personal financial strategy based on this (no longer contributing additional funds to non-retirement investment accounts, instead directing those funds to paying off debt at a faster rate). Shit appears to be getting real shortly.

huac 11y ago

That the Chinese government likely over-estimates GDP is widely known (some indicators are reported magnitudes faster than any other country). The increased debt and factory exodus are probably uniformly bad. On the other hand, a decrease in cash reserves is almost certainly in China's favor. The government has been struggling for years to get rid of its enormous US currency holdings. Especially as we start to see the yuan strengthening and the Fed raise interest rates, it's important for China to extract as much value out of the USD as soon as possible.

sharetea 11y ago
1.) Dollar is strengthening. Janet Yellen said she'll raise rates by the end of the year. Most emerging market currencies have crashed 25-40% this year. 2.) Yuan is weakening. Otherwise Chinese corporate dollar-denominated debts, which is around 1 trillion, will crush the economy right away when the fed raises rates. Plus the government already signaled it is willing to guide yuan lower a month ago. 3.) That's kinda like saying 'well, my 3 houses in the hamptons are burning down, but at least wood structure is the strongest right now!'
- huac 11y ago
  Hmm. Haven't followed the econ beat in the last couple months, my bad. I don't follow your 3rd point though. What do you mean?