12 ms·

These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). Similar to Eurodollars in

by veqq 3y ago

These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). Similar to Eurodollars in the past yielding outsized interest rates, increasing demand and thus dollar outflows, this shows a (perhaps?) unrecognized accumulation in China, which may very well either allow them to essentially print their own dollars or mean that they already have been, synthetically. The article has an interesting premise, calling it a problem for China to have cash - because China is an adversary. I've not seen this stated so explicitly in normal business news before. Warning of the potential for it to be invested abroad in the B&R initiative really shows that the US is gearing up for great power competition again. N.b. Brad Setser is perhaps the most insightful expert on debt and international monetary flows. He often speaks about African refinancing deals - or why they're nearly impossible to refinance, due to insane complexity.

superchroma 3y ago
I mean it's the gigantic elephant in the room. The reported narratives have aligned over the years as if they were our enemy. Here are some: Economically, they're an adversary; they undercut western manufacturing and all our manufacturing went there. They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Ethically, they're our adversary: They use (basically) slave labor, unethical materials (e.g. live plucking), environmentally damaging materials (e.g. banned CFCs), they happily pollute the earth as if tomorrow isn't a concern. They are scraping the ocean clean to feed their people. They oppress their citizens, they operate a crude faux-democracy, they have embarked on an extremely damaging zero covid approach long after it ceased to be relevant to save face for creating it, etc, etc. Politically, they're our adversary, insulting foreign politicians, trying to annexe land and sea that definitively isn't theirs (Tibet, "South China" Sea), engaging in brinksmanship to force the issue, etc. These are all things from media stories that I can think of from the top of my head. Not exactly representation as a best friend.
- bugglebeetle 3y ago
  > They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn’t want any competition.” > they undercut western manufacturing and all our manufacturing went there. America’s oligarchs did this to the country. China just leveraged their short-sightedness and greed to the country’s own advantage.
  - glompers 3y ago
    [flagged]
    - kelipso 3y ago
      Please don't do a whatabout, thanks.
      - glompers 3y ago
        [flagged]
    - Spooky23 3y ago
      The Civil War was about the future, not the past. The South was kinda fucked anyway - land rich agricultural barons were an endangered species everywhere at that point. The point was to bring slavery to the West. Not just for the free labor, but because slaves suppress the wages of everyone. The sons of the south getting mowed down in the trenches were fighting for those barons whose prosperity was dependent on their poverty. African slaves meant there was always readily identifiable people worse off than you.
  - viraptor 3y ago
    Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?
NicoJuicy 3y ago
> These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). I think you missed a crisis in Africa. Those loans can hardly be paid off, the interest rates are too high and the borrowed loans Kuch for infrastructure projects aren't leading to any improvements / revenue. If so, show me which have a net benefit for the country where loans are used to pay off mostly Chinese workers. Every project by China in Africa seems to have failed and putting those countries in debt ( fyi, those projects which China introduced with big fanfare when announced have literally gone mute, business as usual it seems)
- paganel 3y ago
  You’re saying that building roads and bridges is not beneficial to countries which deeply lack roads and bridges?
  - _s 3y ago
    Not when they are built by Chinese companies, using Chinese sourced labour and supplies, and then the locals are taxed / billed to use them which many can't afford to begin with. Not to mention the governments now owing that loan money plus interest, none of which really went into the local economy. Not arguing against China, nor infrastructure projects, but B&R initiative is very China-centric, with a lot caveats that are often overlooked by short-sighted politicians.
    - paganel 3y ago
      So what do you suggest as a better alternative? The West has tried and failed with countless “solutions” for more than six decades now, in many places making the situation worse compared to the start of the decolonization process. Also, road taxes is a measure that it is also heavily promoted by the European Commission in the Eastern European countries where “its” money is now helping build bridges and highways (I live on such an Eastern European country).
      - 3y ago
paganel 3y ago
> Similar to Eurodollars in the past yielding outsized interest rates, increasing demand and thus dollar outflows Genuinely curious, do you happen to have a link about that? When did it happen? The ‘70s, the ‘80s? I’m on my (small-screen) phone and I’m also a little lazy to try and search for it right now. More generally, I feel that the outside investments that bring in lots of money for those involved is not a topic that has been given too much attention, all the focus is on stuff such as trade deficits and the like. The British Empire managed to partially thrive on that kind of investment philosophy for much of the 19th century, the French, too, from a certain point on (even though 1917 and the Bolsheviks getting to power did them a good one). I suspect the same thing has been happening to the US for a long time now (from just after WW2? I couldn’t tell), they’re not balancing their trade deficits based on “money printing” alone.
- mooreds 3y ago
  > Genuinely curious, do you happen to have a link about that? When did it happen? The ‘70s, the ‘80s? There was a recent Odd Lots podcast on the genesis of the Eurodollar market. https://www.bloomberg.com/news/articles/2023-06-19/josh-younger-on-the-origins-of-eurodollars-and-petrodollars https://www.bloomberg.com/news/articles/2023-06-19/josh-youn... Or, if you prefer video or don't pay for Bloomberg: https://www.youtube.com/watch?v=-0EN8_WuvK8 https://www.youtube.com/watch?v=-0EN8_WuvK8

by veqq 3y ago

superchroma 3y ago

I mean it's the gigantic elephant in the room. The reported narratives have aligned over the years as if they were our enemy. Here are some: Economically, they're an adversary; they undercut western manufacturing and all our manufacturing went there. They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Ethically, they're our adversary: They use (basically) slave labor, unethical materials (e.g. live plucking), environmentally damaging materials (e.g. banned CFCs), they happily pollute the earth as if tomorrow isn't a concern. They are scraping the ocean clean to feed their people. They oppress their citizens, they operate a crude faux-democracy, they have embarked on an extremely damaging zero covid approach long after it ceased to be relevant to save face for creating it, etc, etc. Politically, they're our adversary, insulting foreign politicians, trying to annexe land and sea that definitively isn't theirs (Tibet, "South China" Sea), engaging in brinksmanship to force the issue, etc. These are all things from media stories that I can think of from the top of my head. Not exactly representation as a best friend.

bugglebeetle 3y ago
> They manipulate their currency. They interfere with foreign owned businesses. They steal IP. They're seeking to upset the global money standard. They entrap other nations with predatory loans for infrastructure. They trade with our other enemies and flaunt sanctions, etc, etc. Aside from the money standard and zero COVID bits, every part of this is true of the US. This conflict just boils down to “the hegemon doesn’t want any competition.” > they undercut western manufacturing and all our manufacturing went there. America’s oligarchs did this to the country. China just leveraged their short-sightedness and greed to the country’s own advantage.
- glompers 3y ago
  [flagged]
  - kelipso 3y ago
    Please don't do a whatabout, thanks.
    - glompers 3y ago
      [flagged]
  - Spooky23 3y ago
    The Civil War was about the future, not the past. The South was kinda fucked anyway - land rich agricultural barons were an endangered species everywhere at that point. The point was to bring slavery to the West. Not just for the free labor, but because slaves suppress the wages of everyone. The sons of the south getting mowed down in the trenches were fighting for those barons whose prosperity was dependent on their poverty. African slaves meant there was always readily identifiable people worse off than you.
- viraptor 3y ago
  Can you provide the examples for US part in pervasive IP stealing, predatory infrastructure loans, trading with sanctioned countries? Not single issues (every country will have some examples here and there), but actually using those as long term strategies?

NicoJuicy 3y ago

> These currency reserves largely represent loans China issued abroad, which have been paid off (or are in the process of being served). I think you missed a crisis in Africa. Those loans can hardly be paid off, the interest rates are too high and the borrowed loans Kuch for infrastructure projects aren't leading to any improvements / revenue. If so, show me which have a net benefit for the country where loans are used to pay off mostly Chinese workers. Every project by China in Africa seems to have failed and putting those countries in debt ( fyi, those projects which China introduced with big fanfare when announced have literally gone mute, business as usual it seems)

paganel 3y ago
You’re saying that building roads and bridges is not beneficial to countries which deeply lack roads and bridges?
- _s 3y ago
  Not when they are built by Chinese companies, using Chinese sourced labour and supplies, and then the locals are taxed / billed to use them which many can't afford to begin with. Not to mention the governments now owing that loan money plus interest, none of which really went into the local economy. Not arguing against China, nor infrastructure projects, but B&R initiative is very China-centric, with a lot caveats that are often overlooked by short-sighted politicians.
  - paganel 3y ago
    So what do you suggest as a better alternative? The West has tried and failed with countless “solutions” for more than six decades now, in many places making the situation worse compared to the start of the decolonization process. Also, road taxes is a measure that it is also heavily promoted by the European Commission in the Eastern European countries where “its” money is now helping build bridges and highways (I live on such an Eastern European country).
    - 3y ago

paganel 3y ago

> Similar to Eurodollars in the past yielding outsized interest rates, increasing demand and thus dollar outflows Genuinely curious, do you happen to have a link about that? When did it happen? The ‘70s, the ‘80s? I’m on my (small-screen) phone and I’m also a little lazy to try and search for it right now. More generally, I feel that the outside investments that bring in lots of money for those involved is not a topic that has been given too much attention, all the focus is on stuff such as trade deficits and the like. The British Empire managed to partially thrive on that kind of investment philosophy for much of the 19th century, the French, too, from a certain point on (even though 1917 and the Bolsheviks getting to power did them a good one). I suspect the same thing has been happening to the US for a long time now (from just after WW2? I couldn’t tell), they’re not balancing their trade deficits based on “money printing” alone.

mooreds 3y ago
> Genuinely curious, do you happen to have a link about that? When did it happen? The ‘70s, the ‘80s? There was a recent Odd Lots podcast on the genesis of the Eurodollar market. https://www.bloomberg.com/news/articles/2023-06-19/josh-younger-on-the-origins-of-eurodollars-and-petrodollars https://www.bloomberg.com/news/articles/2023-06-19/josh-youn... Or, if you prefer video or don't pay for Bloomberg: https://www.youtube.com/watch?v=-0EN8_WuvK8 https://www.youtube.com/watch?v=-0EN8_WuvK8