Chinese Economics Thread

Strangelove

Colonel
Registered Member
At the same time, major economies from Saudi Arabia to Japan...but with the exception of UK, are dumping US Treasuries.

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Yuan assets still alluring as investors oversubscribe central bank notes in HK


By Global Times Published: May 23, 2022 09:12 PM

The People's Bank of China (PBC), the country's central bank, issued 25 billion yuan ($3.75 billion) of central bank notes in the Hong Kong Special Administrative Region (HKSAR) on Monday, with the issuance 2.3 times oversubscribed by investors, showing the allure of yuan assets.

The issue, with 10 billion yuan of three-month notes and 15 billion yuan of one-year notes, was broadly welcomed by investors, including banks and funds from the US, Europe and Asia, with subscriptions approaching 58 billion yuan.

"The oversubscription indicates the allure of yuan assets and global investors' confidence in China's economy, despite the pressure of a geopolitical crisis, COVID-19 as well as monetary policy changes in major economies," Dong Dengxin, director of the Finance and Securities Institute of the Wuhan University of Science and Technology, told the Global Times on Monday.

On May 4, the US Federal Reserve announced the rise of its key federal funds rate by 50 basis points, the largest move since 2000 to tame inflation. The move, which may draw capital to the US, has aroused concerns about global economic stability, but "the yuan remains strong with the PBC's sufficient toolbox to boost its economy and fight against COVID-19 flare-ups," Dong added.

Regular yuan notes issuances in Hong Kong have broadened the range of yuan-denominated investment products and liquidity management tools in the HKSAR market, and prompted domestic financial institutions and enterprises to issue yuan bonds in the offshore market.

The number of offshore yuan-denominated treasury and corporate bonds is rising, and the methods and locations are increasingly diversified, showing that the yuan bonds issuances in Hong Kong have helped develop the financial market there.

Wang Jianjun, vice chairman of the China Securities Regulatory Commission, said that this year, long-term funds have maintained net inflows into Chinese mainland market, noting that the opening-up of China's capital market remains well-paced, orderly and risk-controlled despite global turbulences.
 

gelgoog

Brigadier
Registered Member
I think it is a coincidence. It happened partially because of the lockdowns in China. But it is an interesting theory.
The other part of the picture people seldom mention is the total collapse of the US transportation infrastructure.
US ports and railroads are failing hard at carrying cargo.
 

Michaelsinodef

Senior Member
Registered Member
I think it is a coincidence. It happened partially because of the lockdowns in China. But it is an interesting theory.
The other part of the picture people seldom mention is the total collapse of the US transportation infrastructure.
US ports and railroads are failing hard at carrying cargo.
It's gonna be interesting to see how their BBB or B3W will end up performing, as well as if they don't perform well, how the impact of their failing infrastructure is gonna bite them back in the coming years.

We might seriously see lots, an I mean lots of bridge collapses in the US.
 

Coalescence

Senior Member
Registered Member
I think it is a coincidence. It happened partially because of the lockdowns in China. But it is an interesting theory.
The other part of the picture people seldom mention is the total collapse of the US transportation infrastructure.
US ports and railroads are failing hard at carrying cargo.
The increase in gas prices is also making it more expensive to send products to their destinations by truck, and inflation is putting the pressure on trucking companies to increase the wages or lose their workers, this is compounded by old workers deciding to retire during the pandemic. US suburban towns are built around cheap gas and travelling by car.
 

KenC

Junior Member
Registered Member
Singaporean analyst insightful talk about inflation and the state of US economy. He also discussed the Common Prosperity, Digital Yuan, US bridge collapse etc and US strategy to deal with rise of China, including initiating war. I think it is a well researched and realistic analysis.

 

SanWenYu

Senior Member
Registered Member
The increase in gas prices is also making it more expensive to send products to their destinations by truck, and inflation is putting the pressure on trucking companies to increase the wages or lose their workers, this is compounded by old workers deciding to retire during the pandemic. US suburban towns are built around cheap gas and travelling by car.
Speaking of the truck drivers, where did the freedom convoy end up in the US? Did they disappear in vain?
 

ansy1968

Brigadier
Registered Member
The increase in gas prices is also making it more expensive to send products to their destinations by truck, and inflation is putting the pressure on trucking companies to increase the wages or lose their workers, this is compounded by old workers deciding to retire during the pandemic. US suburban towns are built around cheap gas and travelling by car.
@Coalescence bro the Hubris, they don't think things through, any action have an immediate reaction and they govern by virtual means by messaging. Since you had lived here you can compare it to the previous Noynoy Aquino administration, where the head is absence and nobody is minding the store. There is a shortage of oil refinery capacity in the US, The Baytown refinery in Texas is still out of commission after a major accident last year, coupled with 2 more accident fire in Montana and Marathon Louisiana. So they had to import Diesel to meet the shortfall couple with a port congestion so it begins a never ending cycle of inflation, the lesson is there to learn, with the 1973 oil crisis as a reminder. Well we can forgive Brandon to forget the lesson after experiencing through it as he keep on shaking hands with his invisible man...lol
 

Overbom

Brigadier
Registered Member
The 5.5% growth target is most likely dead and buried.
As per what I wrote in the beginning of the month, May will most probably also have negative to neutral economic data

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China’s commitment to Covid Zero means it’s all but certain to miss its economic growth target by a large margin for the first time ever.
Economists’ median forecast for gross domestic product growth this year has dropped to 4.5%, according to the latest survey compiled by Bloomberg, well below the official target of about 5.5%.
IMG_20220526_063929.jpg
 
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