Chinese Economics Thread


hullopilllw

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More companies are buying Chinese government bonds.

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Yields is king.

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They still need some $US to buy oil. But Russia and Turkey are decoupling from the $US already. More currency swaps need to be done.
Saudi and EAU too are selling partly oil in rmb to China too. Iran's upcoming 400b 25years investment deal with China will see Iran supplying oil to China at highly discounted pricing and Chinese firms will get first right for all Iranian oil project developments. I predict that very soon the US will be expressing concern for the right of the Iranian people and her sovereign integrity(selling off to China).

Also worthy of notice is the development of China's DC/EP, they have started a public trial but remain quiet about it.
 

SPOOPYSKELETON

Junior Member
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Saudi and EAU too are selling partly oil in rmb to China too. Iran's upcoming 400b 25years investment deal with China will see Iran supplying oil to China at highly discounted pricing and Chinese firms will get first right for all Iranian oil project developments. I predict that very soon the US will be expressing concern for the right of the Iranian people and her sovereign integrity(selling off to China).

Also worthy of notice is the development of China's DC/EP, they have started a public trial but remain quiet about it.
Iran is already under cyber attack. The number of mysterious explosions these past few weeks is telling.
 

SimaQian

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They still need some $US to buy oil. But Russia and Turkey are decoupling from the $US already. More currency swaps agreement need to be done with their main trading partners.
It is more long term to hasten to get rid of gas vehicles all together. The technology is already there, the ecosystem is already there.
If China can get rid of all gas vehicles in 3 or 4 years time, its going to be a revolution. It will hit multiple birds with one stone. Less pollution, less dependency of foreign oil, therefore less demand for US dollar or what ever currency they will use later.

If China can demonstrate that this can be done, others will follow. It will be the collapse of oil based economy. And collapse of the US dollar demand too. This is the only thing why US dollar still reigns supreme. Everybody still needs needs because of oil.
 

Tam

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@Tam

Chinese are starting to wake up to the dollar liability.



I'm also diversifying my portfolio to escape dollar problems down the line.
You don't need the China issues to leave the US dollar. There are many issues alone that can panic you to leaving the US dollar. One is the uncontrolled deficits, along with the massive currency printing. The US is now up to 27 trillion up from 22 to 23 trillion just what, a year ago? What happens when you flood currency when there are product and supply shortages? What happens when you have massive currency injections with no significant increase in productivity and product supply? You are looking at hyperinflation scenarios here. Like Venenzuela. Or the Weimar Republic.

As for oil it will get less important in the long run as China moves to NEVs and the EU gets tighter with the environment. Russia and Saudi Arabia will compete with each other heavily, and it will become a buyer's market. Unfortunately for the US, the shale industry is a bust. Because of the high cost of extracting oil from shale, the shale industry needed two conditions --- one is cheap borrowing for these capital intensive works, and the other is a booming global economy with rich buyers like China paying premiums for oil barrels, all to pay for those bank loans that were made for shale extraction infrastructure.

Guess what happens when China stopped buying, the global economy isn't booming, Russia and Saudi Arabia having an oil price war, the market is at at glut. When oil is down, the US shale oil industry goes down faster than the Titanic. Bankruptcies will happen across the shale-oil producing states because when they can't pay their loans. The banks are going to look at those bad loans and they will get shaky. This is a double whammy for the banks because they won't be getting mortgages paid from unemployment, small businesses and restaurants closing which means mall owners are not going to be paying their mortgages. Didn't JC Penny file for bankruptcy? Brooks Brothers? I heard that a major mall owner is suing Gap because Gap owes them tens of millions of rent. Shalepocalypse + Retailpocalypse this is a banking industry nightmare.

And you know what industry is full of loans too? Airlines. Airline use loans to buy new aircraft. Now air travel is down. How do you expect the airlines to pay their mortgages? What industry is full of loans too? The rental car industry. Naturally when people don't travel, they won't be renting cars. Hertz just filed for bankruptcy. Guess what happens when the rental car industry isn't buying cars...the automobile industry takes a major hit. That hit goes down to their suppliers and to their employees...

And so it goes on and on.

Am I scaring you?
 

Tam

Major
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When the oil price went negative, China bought a lot of them, probably single handedly saving the global oil industry. Too much that China has no place to store the massive glut of oil it bought.

Fleets and fleets of tankers are parked offshore at Chinese ports. Its not a first to use tankers as temporary storage. I remember one time Singapore had this massive tanker logjam.

China is not going to run out of oil soon.

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ansy1968

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When the oil price went negative, China bought a lot of them, probably single handedly saving the global oil industry. Too much that China has no place to store the massive glut of oil it bought.

Fleets and fleets of tankers are parked offshore at Chinese ports. Its not a first to use tankers as temporary storage. I remember one time Singapore had this massive tanker logjam.

China is not going to run out of oil soon.

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Hi Tam,

Since oil is up, Do you think China will resell it for a profit?
 

Gatekeeper

Captain
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They should just sell US treasuries gradually and issue appropriate amounts of RMB bonds.
It is not that simple. Besides, these are two different things. Holding US treasuries is like lending money to the USA. whereas selling RMB bonds is like borrowing money from whoever willing to buy.

In the long run, China's goal is to reduce/stop the US dollars as a mean for international exchange. When that happens, the US will find it can't just simply print money to buy up the world for improve living standards at home. Meaning reality check just like the rest of the world.

It is estimated (from memory of my economic student day long time ago) that USA adds around half to a whole percentage point to their growth rate annually because of the advantage as the world's currency.
 

Franklin

Captain
Not only is China buying gold but Chinese consumers are buying gold. I expect a lot of Chinese that bought foreign properties, bonds and stocks to start selling them and buying gold instead.

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China has been gradually selling off US Treasury bonds and buying up gold mines everywhere. Lately from Canada and Central Asia. China is already the biggest gold producer and keeps most of what it produces with some exports to Hong Kong.

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China hoarding gold is that its preparing to back the Yuan or a digital Yuan with gold.
Good idea China (and all other nations) should diversify from the USD into other currencies and assets. Gold and silver are my personal favorites. What is happening in the US now is insane. Not just with COVID but also in terms of fiscal and monetary policies.
 

AndrewS

Captain
Registered Member
China's GDP will be ~$15 trillion

US GDP is $21 without drops.

With 20% drop it goes down to 17 trillion D:.



I personally think China needs to get rid of its dollars and appreciate the yuan so Chinese can consume their own products.

If we appreciate Yuan to $6/USD, we should be over US GDP this year.
Realistically, we are only looking at a 5-10% drop in US GDP this year, as per the IMF and other estimates.

Appreciating the Yuan actually means Chinese consumers buying more foreign-made products rather than Chinese-made products.
What needs to happen is the disposable incomes of Chinese consumers needs to increase.
Higher wages AND lower property costs for lower-income earners would be ideal.
 

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