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No, the British did not steal $45 trillion from India
This is an updated copy of the version on BadHistory. I plan to update it in accordance with the feedback I got. I'd like to thank two people who will remain anonymous for helping me greatly with this post (you know who you are) Three years ago a festschrift for Binay Bhushan Chaudhuri was published by Shubhra Chakrabarti, a history teacher at the University of Delhi and Utsa Patnaik, a Marxist economist who taught at JNU until 2010. One of the essays in the festschirt by Utsa Patnaik was an attempt to quantify the "drain" undergone by India during British Rule. Her conclusion? Britain robbed India of $45 trillion (or £9.2 trillion) during their 200 or so years of rule. This figure was immensely popular, and got republished in several major news outlets (here, here, here, here (they get the number wrong) and more recently here), got a mention from the Minister of External Affairs & returns 29,100 results on Google. There's also plenty of references to it here on Reddit. Patnaik is not the first to calculate such a figure. Angus Maddison thought it was £100 million, Simon Digby said £1 billion, Javier Estaban said £40 million see Roy (2019). The huge range of figures should set off some alarm bells. So how did Patnaik calculate this (shockingly large) figure? Well, even though I don't have access to the festschrift, she conveniently has written an article detailing her methodology here. Let's have a look.
How exactly did the British manage to diddle us and drain our wealth’ ? was the question that Basudev Chatterjee (later editor of a volume in the Towards Freedom project) had posed to me 50 years ago when we were fellow-students abroad.
This is begging the question.
After decades of research I find that using India’s commodity export surplus as the measure and applying an interest rate of 5%, the total drain from 1765 to 1938, compounded up to 2016, comes to £9.2 trillion; since $4.86 exchanged for £1 those days, this sum equals about $45 trillion.
This is completely meaningless. To understand why it's meaningless consider India's annual coconut exports. These are almost certainly a surplus but the surplus in trade is countered by the other country buying the product (indeed, by definition, trade surpluses contribute to the GDP of a nation which hardly plays into intuitive conceptualisations of drain). Furthermore, Dewey (2019) critiques the 5% interest rate.
She [Patnaik] consistently adopts statistical assumptions (such as compound interest at a rate of 5% per annum over centuries) that exaggerate the magnitude of the drain
The exact mechanism of drain, or transfers from India to Britain was quite simple.
Drain theory possessed the political merit of being easily grasped by a nation of peasants. [...] No other idea could arouse people than the thought that they were being taxed so that others in far off lands might live in comfort. [...] It was, therefore, inevitable that the drain theory became the main staple of nationalist political agitation during the Gandhian era.
The key factor was Britain’s control over our taxation revenues combined with control over India’s financial gold and forex earnings from its booming commodity export surplus with the world. Simply put, Britain used locally raised rupee tax revenues to pay for its net import of goods, a highly abnormal use of budgetary funds not seen in any sovereign country.
The issue with figures like these is they all make certain methodological assumptions that are impossible to prove. From Roy in Frankema et al. (2019):
the "drain theory" of Indian poverty cannot be tested with evidence, for several reasons. First, it rests on the counterfactual that any money saved on account of factor payments abroad would translate into domestic investment, which can never be proved. Second, it rests on "the primitive notion that all payments to foreigners are "drain"", that is, on the assumption that these payments did not contribute to domestic national income to the equivalent extent (Kumar 1985, 384; see also Chaudhuri 1968). Again, this cannot be tested. [...] Fourth, while British officers serving India did receive salaries that were many times that of the average income in India, a paper using cross-country data shows that colonies with better paid officers were governed better (Jones 2013).
Indeed, drain theory rests on some very weak foundations. This, in of itself, should be enough to dismiss any of the other figures that get thrown out. Nonetheless, I felt it would be a useful exercise to continue exploring Patnaik's take on drain theory.
The East India Company from 1765 onwards allocated every year up to one-third of Indian budgetary revenues net of collection costs, to buy a large volume of goods for direct import into Britain, far in excess of that country’s own needs.
So what's going on here? Well Roy (2019) explains it better:
Colonial India ran an export surplus, which, together with foreign investment, was used to pay for services purchased from Britain. These payments included interest on public debt, salaries, and pensions paid to government offcers who had come from Britain, salaries of managers and engineers, guaranteed profts paid to railway companies, and repatriated business profts. How do we know that any of these payments involved paying too much? The answer is we do not.
So what was really happening is the government was paying its workers for services (as well as guaranteeing profits - to promote investment - something the GoI does today Dalal (2019), and promoting business in India), and those workers were remitting some of that money to Britain. This is hardly a drain (unless, of course, Indian diaspora around the world today are "draining" it). In some cases, the remittances would take the form of goods (as described) see Chaudhuri (1983):
It is obvious that these debit items were financed through the export surplus on merchandise account, and later, when railway construction started on a large scale in India, through capital import. Until 1833 the East India Company followed a cumbersome method in remitting the annual home charges. This was to purchase export commodities in India out of revenue, which were then shipped to London and the proceeds from their sale handed over to the home treasury.
While Roy's earlier point argues better paid officers governed better, it is honestly impossible to say what part of the repatriated export surplus was a drain, and what was not. However calling all of it a drain is definitely misguided. It's worth noting that Patnaik seems to make no attempt to quantify the benefits of the Raj either, Dewey (2019)'s 2nd criticism:
she [Patnaik] consistently ignores research that would tend to cut the economic impact of the drain down to size, such as the work on the sources of investment during the industrial revolution (which shows that industrialisation was financed by the ploughed-back profits of industrialists) or the costs of empire school (which stresses the high price of imperial defence)
Since tropical goods were highly prized in other cold temperate countries which could never produce them, in effect these free goods represented international purchasing power for Britain which kept a part for its own use and re-exported the balance to other countries in Europe and North America against import of food grains, iron and other goods in which it was deficient.
Re-exports necessarily adds value to goods when the goods are processed and when the goods are transported. The country with the largest navy at the time would presumably be in very good stead to do the latter.
The British historians Phyllis Deane and WA Cole presented an incorrect estimate of Britain’s 18th-19th century trade volume, by leaving out re-exports completely. I found that by 1800 Britain’s total trade was 62% higher than their estimate, on applying the correct definition of trade including re-exports, that is used by the United Nations and by all other international organisations.
While interesting, and certainly expected for such an old book, re-exporting necessarily adds value to goods.
When the Crown took over from the Company, from 1861 a clever system was developed under which all of India’s financial gold and forex earnings from its fast-rising commodity export surplus with the world, was intercepted and appropriated by Britain. As before up to a third of India’s rising budgetary revenues was not spent domestically but was set aside as ‘expenditure abroad’.
So, what does this mean? Britain appropriated all of India's earnings, and then spent a third of it aboard? Not exactly. She is describing home charges see Roy (2019) again:
Some of the expenditures on defense and administration were made in sterling and went out of the country. This payment by the government was known as the Home Charges. For example, interest payment on loans raised to finance construction of railways and irrigation works, pensions paid to retired officers, and purchase of stores, were payments in sterling. [...] almost all money that the government paid abroad corresponded to the purchase of a service from abroad. [...] The balance of payments system that emerged after 1800 was based on standard business principles.India bought something and paid for it.State revenues were used to pay for wages of people hired abroad, pay for interest on loans raised abroad, and repatriation of profits on foreign investments coming into India. These were legitimate market transactions.
Indeed, if paying for what you buy is drain, then several billions of us are drained every day.
The Secretary of State for India in Council, based in London, invited foreign importers to deposit with him the payment (in gold, sterling and their own currencies) for their net imports from India, and these gold and forex payments disappeared into the yawning maw of the SoS’s account in the Bank of England.
It should be noted that India having two heads was beneficial, and encouraged investment per Roy (2019):
The fact that the India Office in London managed a part of the monetary system made India creditworthy, stabilized its currency, and encouraged foreign savers to put money into railways and private enterprise in India. Current research on the history of public debt shows that stable and large colonies found it easier to borrow abroad than independent economies because the investors trusted the guarantee of the colonist powers.
Against India’s net foreign earnings he issued bills, termed Council bills (CBs), to an equivalent rupee value. The rate (between gold-linked sterling and silver rupee) at which the bills were issued, was carefully adjusted to the last farthing, so that foreigners would never find it more profitable to ship financial gold as payment directly to Indians, compared to using the CB route. Foreign importers then sent the CBs by post or by telegraph to the export houses in India, that via the exchange banks were paid out of the budgeted provision of sums under ‘expenditure abroad’, and the exporters in turn paid the producers (peasants and artisans) from whom they sourced the goods.
Sunderland (2013) argues CBs had two main roles (and neither were part of a grand plot to keep gold out of India):
Council bills had two roles. They firstly promoted trade by handing the IO some control of the rate of exchange and allowing the exchange banks to remit funds to India and to hedge currency transaction risks. They also enabled the Indian government to transfer cash to England for the payment of its UK commitments.
The United Nations (1962) historical data for 1900 to 1960, show that for three decades up to 1928 (and very likely earlier too) India posted the second highest merchandise export surplus in the world, with USA in the first position. Not only were Indians deprived of every bit of the enormous international purchasing power they had earned over 175 years, even its rupee equivalent was not issued to them since not even the colonial government was credited with any part of India’s net gold and forex earnings against which it could issue rupees. The sleight-of-hand employed, namely ‘paying’ producers out of their own taxes, made India’s export surplus unrequited and constituted a tax-financed drain to the metropolis, as had been correctly pointed out by those highly insightful classical writers, Dadabhai Naoroji and RCDutt.
It doesn't appear that others appreciate their insight Roy (2019):
K. N. Chaudhuri rightly calls such practice ‘confused’ economics ‘coloured by political feelings’.
Surplus budgets to effect such heavy tax-financed transfers had a severe employment–reducing and income-deflating effect: mass consumption was squeezed in order to release export goods. Per capita annual foodgrains absorption in British India declined from 210 kg. during the period 1904-09, to 157 kg. during 1937-41, and to only 137 kg by 1946.
If even a part of its enormous foreign earnings had been credited to it and not entirely siphoned off, India could have imported modern technology to build up an industrial structure as Japan was doing.
This is, unfortunately, impossible to prove. Had the British not arrived in India, there is no clear indication that India would've united (this is arguably more plausible than the given counterfactual1). Had the British not arrived in India, there is no clear indication India would not have been nuked in WW2, much like Japan. Had the British not arrived in India, there is no clear indication India would not have been invaded by lizard people, much like Japan. The list continues eternally. Nevertheless, I will charitably examine the given counterfactual anyway. Did pre-colonial India have industrial potential? The answer is a resounding no. From Gupta (1980):
This article starts from the premise that while economic categories - the extent of commodity production, wage labour, monetarisation of the economy, etc - should be the basis for any analysis of the production relations of pre-British India, it is the nature of class struggles arising out of particular class alignments that finally gives the decisive twist to social change. Arguing on this premise, and analysing the available evidence, this article concludes that there was little potential for industrial revolution before the British arrived in India because, whatever might have been the character of economic categories of that period,the class relations had not sufficiently matured to develop productive forces and the required class struggle for a 'revolution' to take place.
Yet all of this did not amount to an economic situation comparable to that of western Europe on the eve of the industrial revolution. Her technology - in agriculture as well as manufacturers - had by and large been stagnant for centuries. [...] The weakness of the Indian economy in the mid-eighteenth century, as compared to pre-industrial Europe was not simply a matter of technology and commercial and industrial organization. No scientific or geographical revolution formed part of the eighteenth-century Indian's historical experience. [...] Spontaneous movement towards industrialisation is unlikely in such a situation.
So now we've established India did not have industrial potential, was India similar to Japan just before the Meiji era? The answer, yet again, unsurprisingly, is no. Japan's economic situation was not comparable to India's, which allowed for Japan to finance its revolution. From Yasuba (1986):
All in all, the Japanese standard of living may not have been much below the English standard of living before industrialization, and both of them may have been considerably higher than the Indian standard of living. We can no longer say that Japan started from a pathetically low economic level and achieved a rapid or even "miraculous" economic growth. Japan's per capita income was almost as high as in Western Europe before industrialization, and it was possible for Japan to produce surplus in the Meiji Period to finance private and public capital formation.
The circumstances that led to Meiji Japan were extremely unique. See Tomlinson (1985):
Most modern comparisons between India and Japan, written by either Indianists or Japanese specialists, stress instead that industrial growth in Meiji Japan was the product of unique features that were not reproducible elsewhere. [...] it is undoubtably true that Japan's progress to industrialization has been unique and unrepeatable
So there you have it. Unsubstantiated statistical assumptions, calling any number you can a drain & assuming a counterfactual for no good reason gets you this $45 trillion number. Hopefully that's enough to bury it in the ground. 1. Several authors have affirmed that Indian identity is a colonial artefact. For example seeRajan 1969:
Perhaps the single greatest and most enduring impact of British rule over India is that it created an Indian nation, in the modern political sense. After centuries of rule by different dynasties overparts of the Indian sub-continent, and after about 100 years of British rule, Indians ceased to be merely Bengalis, Maharashtrians,or Tamils, linguistically and culturally.
But then, it would be anachronistic to condemn eighteenth-century Indians, who served the British, as collaborators, when the notion of 'democratic' nationalism or of an Indian 'nation' did not then exist.[...]Indians who fought for them, differed from the Europeans in having a primary attachment to a non-belligerent religion, family and local chief, which was stronger than any identity they might have with a more remote prince or 'nation'.
Chakrabarti, Shubra & Patnaik, Utsa (2018). Agrarian and other histories: Essays for Binay Bhushan Chaudhuri. Colombia University Press Hickel, Jason (2018). How the British stole $45 trillion from India. The Guardian Bhuyan, Aroonim & Sharma, Krishan (2019). The Great Loot: How the British stole $45 trillion from India. Indiapost Monbiot, George (2020). English Landowners have stolen our rights. It is time to reclaim them. The Guardian Tsjeng, Zing (2020). How Britain Stole $45 trillion from India with trains | Empires of Dirt. Vice Chaudhury, Dipanjan (2019). British looted $45 trillion from India in today’s value: Jaishankar. The Economic Times Roy, Tirthankar (2019). How British rule changed India's economy: The Paradox of the Raj. Palgrave Macmillan Patnaik, Utsa (2018). How the British impoverished India. Hindustan Times Tuovila, Alicia (2019). Expenditure method. Investopedia Dewey, Clive (2019). Changing the guard: The dissolution of the nationalist–Marxist orthodoxy in the agrarian and agricultural history of India. The Indian Economic & Social History Review Chandra, Bipan et al. (1989). India's Struggle for Independence, 1857-1947. Penguin Books Frankema, Ewout & Booth, Anne (2019). Fiscal Capacity and the Colonial State in Asia and Africa, c. 1850-1960. Cambridge University Press Dalal, Sucheta (2019). IL&FS Controversy: Centre is Paying Up on Sovereign Guarantees to ADB, KfW for Group's Loan. TheWire Chaudhuri, K.N. (1983). X - Foreign Trade and Balance of Payments (1757–1947). Cambridge University Press Sunderland, David (2013). Financing the Raj: The City of London and Colonial India, 1858-1940. Boydell Press Dewey, Clive (1978). Patwari and Chaukidar: Subordinate officials and the reliability of India’s agricultural statistics. Athlone Press Smith, Lisa (2015). The great Indian calorie debate: Explaining rising undernourishment during India’s rapid economic growth. Food Policy Duh, Josephine & Spears, Dean (2016). Health and Hunger: Disease, Energy Needs, and the Indian Calorie Consumption Puzzle. The Economic Journal Vankatesh, P. et al. (2016). Relationship between Food Production and Consumption Diversity in India – Empirical Evidences from Cross Section Analysis. Agricultural Economics Research Review Gupta, Shaibal (1980). Potential of Industrial Revolution in Pre-British India. Economic and Political Weekly Raychaudhuri, Tapan (1983). I - The mid-eighteenth-century background. Cambridge University Press Yasuba, Yasukichi (1986). Standard of Living in Japan Before Industrialization: From what Level did Japan Begin? A Comment. The Journal of Economic History Tomblinson, B.R. (1985). Writing History Sideways: Lessons for Indian Economic Historians from Meiji Japan. Cambridge University Press Rajan, M.S. (1969). The Impact of British Rule in India. Journal of Contemporary History Bryant, G.J. (2000). Indigenous Mercenaries in the Service of European Imperialists: The Case of the Sepoys in the Early British Indian Army, 1750-1800. War in History
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A Short Story that Describes Imaginary Events and People of Worldwide Calamities and the Aftermath (the 2nd Edition)
The following story, all names, characters, and incidents portrayed in this post are fictitious. No identification with actual persons (living or deceased), places, buildings, and products is intended or should be inferred. However, the LINKS to real-life events and inspiring sources are placed here and there throughout the story. -------- Truth is the Only Light -------- INTRO ☞ [As of 2019] there are plenty of reasons to think the Chinese system will implode spectacularly without Japanese feeling the need to do a thing. — Peter Zaihan, Disunited Nations (Mar 03, 2020) It's apparent that two nations have been engaged in a high-stakes military & economy arms race. The current US admin has been hitting China with waves of tariffs, but that was merely a small part of what's actually going on.         On Oct 11, 2019, when they reached a tentative agreement for the first phase of a trade deal, the fact that China made the concession actually made my jaw drop. From where I sit, it was a worrisome scene. Aren't people saying, when challenging situations are bottled up, they will just grow and mutate into another terrible complications? Admittedly I was not certain how they are going to adhere to the agreement: It left most of the US tariffs (on China's exports) in place, and at the same time, came with an additional USD $200 Billion burden for China over the next two years. This agreement might seem a bit insignificant, but now China would need to purchase almost twice the size of the US products & services they did before the trade war began. With their current economic climate? I murmured, "No way." While watching Trump brag and boast around with said agreement, I expected China would soon come out and fling some improvised excuses in order to delay the document-signing process. It wouldn't be their first time. More importantly, even if China does so, there wouldn't be many (real) counterattack options left for the Trump admin during this year, the US presidential election year. Then, on Jan 16, 2020, the world’s two largest economies actually signed a partial trade agreement aimed at putting the brakes on an 18-month trade war. China would almost surely not sit down but come back to bite, I thought. Enter the worldwide chaos following so called the COVID-19 outbreak. -------- BACKGROUND ☞ Globalists have been heavily investing in China's economy and its components overseas. • Here are a couple of well known names: the Great Old One; George Soros; Koos Bekker; and Bill Gates. • For the sake of convenience, from here on, let's call these globalists, who are foreign investors in China's top tier state-owned/sponsored/controlled enterprises, Team-Z. • Team-Z has adopted big time lackeys like Henry Kissinger or small time ones like Larry Summers, Stephen Hadley, or Bill Browder as matchmakers to court Team-Z for China's top tier enterprises. When Israel's highest echelons chimed in, it has been through Israeli IT companies and the BRI projects. • Naturally, multinational investment banks have also been employed; such as Morgan Stanley, Goldman Sachs, Royal Bank of Scotland (RBS), UBS Group AG (formerly Union Bank of Switzerland), Blackstone Group, Canaccord Genuity, BlackRock, Hermitage, or Mirae Asset. ☞ Note: The Great Old One didn't use any matchmakers, something peasants would need. Because the Great Old One's power level is over 9000. • China's Shanghai clique used to keep the nation's state-sponsored enterprises under their firm grip: Enterprises such as Alibaba Group, Tencent, Baidu, Wanda Group, HNA Group, Anbang Group, Evergrande Group, CEFC Energy and Huawei, all of which Team-Z has massively invested in. • Here is how Shanghai clique and Team-Z, esp. Bill Gates, started to get together:[LINK] • However, in the name of anti-corruption campaign, Xi Jinping & his Princelings have been taking those businesses away from Shanghai clique's hand, and transforming those state-sponsored private enterprises into the state-owned enterprises, declaring the 國進民退 movement. • Slaying Shanghai clique's control =       • 國進民退 + Slaying Shanghai clique's control = [A] [B] [C] • Xi's reign didn't arrive today without challenges though: the BRI projects' poor outcome has frustrated Israel's great expectations. And since the US-China trade war has started, the problems of China's economic systems started to surface, not to mention China's economy has long been decaying. • Coupled with the US-China trade war, the current US admin has been trying to block Huawei from accessing the international financial systems that the US can influence, as well as the US banking systems. This is a good time to remind you again that Bill Gates has had a very close-knit relationship with Huawei. -------- TRADE WAR & INTERNET-BASED COMPANIES ☞ It's the trade war, but why were internet-based companies such as Tencent and Baidu suffering losses? Answer: The state-sponsored companies like Tencent, Baidu, or Huawei have heavily invested in international trade and commodity markets, which are easily influenced by aspects that IMF interest rates, the US sanctions, or trade war can create. Example: Let's say, Tencent invests in a Tehran-based ride-hailing company. Then, through said ride-hailing company, Tencent invests in Iran's petroleum industry. Now, China's most valuable IT company is in international petrochemical trade. The business is going to make great strides until the US imposes trade embargoes oand economic sanctions against Iran. -------- TL;DR China's economy going down = Team-Z losing an astronomical amount of money. ★ Wednesday, Sep 26, 2018 ★ "Gentlemen, you guys might want to do something before it's too bloody late, no? Hisspeechlast night was .... (sniggers) Mr. Gates, now is as good a time as any. Mr.Soros, hm, don't look at melikethat." ".... But," "Yes, Mr. Soros, yourHNAis going down, too. .... Ah,Schwarzmanxiansheng, we're very sorry to learn about Blackstone'sIran&SinopecChinasituation. So, we're guessing, you'd be happy to join Mr. Gates's operation, yes? Of course, We already contactedKissingerxiansheng. ....Okaythen,Gentlemen?" • Now you can take a guess why George Soros has recently been sending out confusing messages regarding Xi Jinping. • Wait, how about Wuhan Institute of Virology? Doesn't this story concern the COVID-19 outbreak? Is the Wuhan Institute also associated with Shanghai clique? Yes, indeed. Here's How Wuhan Institute of Virology and Shanghai Clique are related:[LINK] -------- EIGHT OBJECTIVES ☞ Calling for the tide to be turned, Team-Z and Shanghai clique started to devise the plan. The objectives are: ① By shutting down international trade, crashing world economy, and exploiting its aftermath, the plan should produce an outcome letting Team-Z earn back their loss from the trade war & the US sanctions, and collect additional profits from China's BRI projects & stock markets worldwide, including the US stock markets. • Don't forget this: This point number ① also concerns the developing nations on the BRI with the large deposits of natural resources that Team-Z has invested in through China. If everything comes together nicely, Team-Z will pick up trillions of dollars from those nations alone as if they are light as a feather. Ironically this will reinforce the BRI project governance and mitigate fraud & corruption risks inherent to the international development projects. ② By utilizing the aftermath in the US, a new US administration consisted of pro-Beijing personnels should be fostered at the 2020 election. In a worst-case scenario, the aftermath should be abused enough to make Robert Lighthizer to leave the admin. Mr. Mnuchin could stay. ③ Sometime next year, the phase one trade deal must be reassessed with the new US admin. The reassessment should help China take the upper-hand at the second phase trade talk. ④ The pandemic crisis should yield a situation which allows China to delay the payments for its state-firm offshore debts. With the point number ①, this will give China a breathing room to manage its steadily-fallen forex reserves. ⑤ Since their current turf (in China) is education industry & medical science industry, Shanghai clique will have no issue with earning hefty profits by managing China's export of medical equipments & health care products which can be supplied worldwide mainly by China. People in the west will bent the knees for the clique's support. ☞ Regarding Jiang Zemin's son and medical science industry in China [LINK] ⑥ The outcome should weaken Xi & his Princelings' political power considerably in favour of Shanghai clique & Team-Z. This will let Jiang's Shanghai clique (A) reclaim some of political status & business interest controls they have lost to Xi & his Princelings. • And once this point number ⑥, with the point number ② , is realized, it would be much easier for the clique to (B) recover their huge assets hidden overseas that the current US admin or Xi & his Princelings have frozen. ⑦ Combining good old bribery with sex, the outcome should support China to re-secure control over the US governors. Once the plan is executed successfully, those governors would desperately need solutions to local economic problems and unemployment. ⑧ Lastly, implementing an e-ID system in the US similar to Beijing's Alipay and WeChat could be the cherry on top of the operation's entire outcomes. Who's supporting such a system worldwide? None other than Microsoft and Rockefeller Foundation. ಠ_ಠ -------- OLD COMRADE BECOMES A NEW RECRUIT ☞ They were afraid more talents were needed. The main target was the world’s largest economy with the most powerful military capability, after all. They ended up asking Mr. Fridman to see Lord Putin about that. The old Vova was going through a lot nowadays, people said. It could be because his nation's energy business to Europeseems to be hitting wall after wall. He is said to have enough on his plate with no end in sight, so maybe he'll join. ★ Monday, Jan 15, 2018 ★ "(pours a drink for himself) I know, but. ... What would happen if Bashar falls? How long you think you can keep it up? .... Erdogan is many things (sniggers) but he's nevergentle. (sips his drink slowly) WhenBenji'sEastMed Pipeline starts to actively compete, then what? They got the Chinamoneynow. ....Vagitand his buddies will be very unhappy. You know that. Not great, Vova." "...." "Ah, you mean what are we going to do? Hm? Hm. I'll tell you what we're going to do. This time, we're going to bankrupt the US shale gas sector. Then, of course, we can maybe convince Benji to take their time with the pipeline. Perhaps for good. (sips his drink slowly) Don't worry, Vova, It'll work. You worry too much. We'll come out the other side stronger." "So, how long until they set it off? "Hahaa, yes. They'll soon put all things in place. While marching in place, they'll play the tune a couple of months before the next sochelnik." "Nearly 20 months to brace things here, then?" "(nod slowly in happiness) Hm. Оторви́сь там, оттопы́рься, Vova" -------- USEFUL IDIOTS ☞ When the directive came, these idiots answered claiming they would be gladly "on it." All in the name of rejuvenating China's economy without grasping the real objective prevailing throughout the entire operation. Thing is, they would never realize what they are to Team-Z & their Asian overlord until it’s too late. Who are they? It's A and B, not A or B: (A) the American corporations that are too big to fail and have suffered a considerable loss because of the US-China trade war. Among those corporations, (B) the ones that have been structured with massive interest-profit relationships in/with China. "We need China in order for the US as a nation to continue being prosper," they've been shouting. No surprise there, because they've enjoyed the strides of extraordinary profits over the years while the US middle class has continued to shrink. But, in 2019 when China's stock markets nosedived for the first time since 2015 and China's authorities in financial stability & resiliency fumbled their response; it wiped that smile off their face. Still, they'll keep behaving not to offend their Asian overlord, nonetheless. -------- PERFECT PLAN ☞ Many crucial components had to come into play all at once in order to cause World War I. If one of the components were missing or different, it is unlikely that the World War I as we know of could be produced. ① The US in 2019: Overbought bubbles + Over borrowed corporations ② The US in 2020: It's an Election Year. ③ Russia has been dumping US Treasuries for the past few years. ④ Russia has been hoarding golds as if they were recreating Inca Empire. ⑤ China in 2019: Immense & long term financial troubles has started to surface. ⑥ China in 2020: The phase-one deal has been signed; leaving most of tariffs on China intact and adding another $200 Billion burden for China. ⑦ Team-Z sets up a situation in the US where some event(s) would freeze the US supply chains & demand for the next three to ten months. • Just like the 9/11, the event will be initiated at the clique's own region. However, unlike in China, the US will report multiple epicentres simultaneously. • And the CDC and the US medical task force will carry on with a number of sabotage acts, to secure enough time for the infected yet untested in those US epicentres to spread plenty.    • Here's a feasible timeline of the operation. ⑧ Then, the BOOM: Team-Z (a) manipulates the markets to make sure MM will have liquidity concerns (b) when they need it most. The (c) bottomed out oil price will be an enforcement, which will also wreck the US energy sector as a kicker. The (d) WHO will also join as a disinformation campaign office. • Then a couple of big name investment managers will lead a movement that (will try to) bring back foreign money back to China.   • Meanwhile, in US, the disinformation campaign will continue to be pushed until the second wave of attack arrives. -------- MEASURABLE SHORT-TERM OUTCOME ☞ We're now going through World War III. The global structure laid down by World War II had been shaken by globalization and the rise of China. This pandemic event will shock the structure further. Human history will be divided into Before 2021 and After 2021. ① Outcome pt. 1: Immediate Aftermath [pt.1] [pt.2] ② Outcome pt. 2: The US economy goes deep dive along with world economy, and the only thing Team-Z has to do is to exploit the aftermath which has been thoroughly calculated and eagerly anticipated. — Favoured assessment: There won't be a V curve ever, unless drastic measures taken within the timeframe of four months. Unprecedented market crash, the rapid unemployment acceleration because of the supply-chain shut down, and the near-death security which in turn forces consumer confidence to plummet. We're looking at a super long L shape curve unless the US prepares fast for the second wave of their asymmetric warfare. ③ Outcome pt. 3: Arguably the most important outcome. — Because of the unprecedented shutdown of international trade, the nations heavily rely on exporting natural resources will face the extreme financial threats. What if some of those are emerging markets AND massively in debt to China? What do you think China would do to said nations while the aftermath is hitting the globe hard? [PDF] Something comparable to Latin American Debt Crisis will happen. ④ Outcome pt. 4: Not that significant compared to the others but still notable outcome. — The world will need Shanghai clique's help to get medical products and equipments. -------- WHAT'S NEXT? ☞ Several analysts have discussed off the record that next it'd be a proxy warfare not using armed conflicts but with spreading a galaxy of counterfeit-currency across every possible channels. Coincidently, on Dec 13, 2017, Business Insider reported in an article "A $100 counterfeit 'supernote' found in South Korea could have been made in North Korea" that:
"It was the first of a new kind of supernote ever found in the world," Lee Ho-Joong, head of KEB Hana Bank's anti-counterfeit centre told Agence France-Presse.
Reporting the same news, The Telegraph published an article on Dec 11, 2017:
"It seems that whoever printed these supernotes has the facilities and high level of technology matching that of a government", said Lee Ho-jung, a bank spokesman from KEB Hana Bank in South Korea. "They are made with special ink that changes colour depending on the angle, patterned paper and Intaglio printing that gives texture to the surface of a note".
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Trump Didn’t Kill the Global Trade System. He Split It in Two.
This article is taken from the Wall Street Journal written about nine months ago and sits behind a a paywall, so I decided to copy and paste it here. This article explains Trump's policies toward global trade and what has actually happened so far. I think the article does a decent job of explaining the Trade War. While alot has happenedsince the article was written, I still think its relevant. However, what is lacking in the article, like many articles on the trade war, is it doesn't really explain the history of US trade policy, the laws that the US administration is using to place tariffs on China and the official justification for the US President in enacting tariffs against China. In my analysis I will cover those points.
When Trump entered the White House people feared he would dismantle the global system the US and its allies had built over the last 75 years, but he hasn't. He has realign into two systems. One between the US and its allies which looks similar to the one built since the 1980s with a few of quota and tariffs. As the article points out
Today, Korus and Nafta have been replaced by updated agreements(one not yet ratified) that look much like the originals. South Korea accepted quotas on steel. Mexico and Canada agreed to higher wages, North American content requirements and quotas for autos. Furthermore, the article points out Douglas Irwin, an economist and trade historian at Dartmouth College, calls these results the “status quo with Trumpian tweaks: a little more managed trade sprinkled about for favored industries. It’s not good, but it’s not the destruction of the system.” Mr. Trump’s actions so far affect only 12% of U.S. imports, according to Chad Bown of the Peterson Institute for International Economics. In 1984, 21% of imports were covered by similar restraints, many imposed by Mr. Reagan, such as on cars, steel, motorcycles and clothing. Protectionist instincts go so far in the US, there are strong lobby groups for both protectionist and freetrade in the US.
The second reflects a emerging rivalry between the US and China. Undo some of the integration that followed China accession to the WTO. Two questions 1) How far is the US willing to decouple with China 2) Can it persuade allies to join.
The second is going to be difficult because China's economic ties are greater than they were between the Soviets, and China isn't waging an ideological struggle. Trump lacks Reagan commitment to alliance and free trade. The status quo with China is crumbling Dan Sullivan, a Republican senator from Alaska, personifies these broader forces reshaping the U.S. approach to the world. When Mr. Xi visited the U.S. in 2015, Mr. Sullivan urged his colleagues to pay more attention to China’s rise. On the Senate floor, he quoted the political scientist Graham Allison: “War between the U.S. and China is more likely than recognized at the moment.” Last spring, Mr. Sullivan went to China and met officials including Vice President Wang Qishan. They seemed to think tensions with the U.S. will fade after Mr. Trump leaves the scene, Mr. Sullivan recalled. “I just said, ‘You are completely misreading this.’” The mistrust, he told them, is bipartisan, and will outlast Mr. Trump. both Bush II and Obama tried to change dialogue and engagement, but by the end of his term, Obama was questioning the approach. Trump has declared engagement. “We don’t like it when our allies steal our ideas either, but it’s a much less dangerous situation,” said Derek Scissors, a China expert at the American Enterprise Institute whose views align with the administration’s more hawkish officials. “We’re not worried about the war-fighting capability of Japan and Korea because they’re our friends.”
The article also points out unlike George Kennan in 1946 who made a case for containing the Soviet Union, the US hasn't explicitly made a case for containing the Soviets, Trump's administration hasn't, because as the the article explains its divided Michael Pillsbury a Hudson Institute scholar close to the Trump team, see 3 scenarios
New Cold War with drastically reduced economic ties
China resolve their tensions, integrate and run the world together
Transactional US-China relationship of the sort during the 1980s
Pillsbury thinks the third is most likely to happen, even though the administration hasn't said that it has adopted that policy. The US is stepping efforts to draw in other trading partners. The US, EU and Japan have launched a WTO effort to crack down on domestic subsidies and technology transfers requirement. US and Domestic concerns with prompted some countries to restrict Huawei. The US is also seeking to walloff China from other trade deals. However, there are risk with this strategy
Other countries like Japan and South Korea to dependent on China. Too integrated.
Raise objections to Belt and Road. But no alternative
My main criticism of this article is it tries like the vast majority of articles to fit US trade actions in the larger context of US geopolitical strategy. Even the author isn't certain "The first goes to the heart of Mr. Trump’s goal. If his aim is to hold back China’s advance, economists predict he will fail.". If you try to treat the trade "war" and US geopolitical strategy toward China as one, you will find yourself quickly frustrated and confused. If you treat them separately with their different set of stakeholders and histories, were they intersect with regards to China, but diverge. During the Cold War, trade policy toward the Soviet Union and Eastern Bloc was subordinated to geopolitical concerns. For Trump, the trade issues are more important than geopolitical strategy. His protectionist trade rhetoric has been fairly consistent since 1980s. In his administration, the top cabinet members holding economic portfolios, those of Commerce, Treasury and US Trade Representative are the same people he picked when he first took office. The Director of the Economic Council has changed hands once, its role isn't as important as the National Security Advisor. While State, Defense, CIA, Homeland Security, UN Ambassador, National Security Advisor have changed hands at least once. Only the Director of National Intelligence hasn't changed. International Trade makes up 1/4 of the US economy, and like national security its primarily the responsibility of the Federal government. States in the US don't implement their own tariffs. If you add the impact of Treasury policy and how it relates to capital flows in and out of the US, the amounts easily exceed the size of the US economy. Furthermore, because of US Dollar role as the reserve currency and US control of over global system the impact of Treasury are global. Trade policy and investment flows runs through two federal departments Commerce and Treasury and for trade also USTR. Defense spending makes up 3.3% of GDP, and if you add in related homeland security its at most 4%. Why would anyone assume that these two realms be integrated let alone trade policy subordinate to whims of a national security bureaucracy in most instances? With North Korea or Iran, trade and investment subordinate themselves to national security, because to Treasury and Commerce bureaucrats and their affiliated interest groups, Iran and the DPRK are well, economic midgets, but China is a different matter. The analysis will be divided into four sections. The first will be to provide a brief overview of US trade policy since 1914. The second section will discuss why the US is going after China on trade issues, and why the US has resorted using a bilateral approach as opposed to going through the WTO. The third section we will talk about how relations with China is hashed out in the US. The reason why I submitted this article, because there aren't many post trying to explain US-China Trade War from a trade perspective. Here is a post titled "What is the Reasons for America's Trade War with China, and not one person mentioned Article 301 or China's WTO Commitments. You get numerous post saying that Huawei is at heart of the trade war. Its fine, but if you don't know what was inside the USTR Investigative report that lead to the tariffs. its like skipping dinner and only having dessert When the US President, Donald J Trump, says he wants to negotiate a better trade deal with other countries, and has been going on about for the last 35 years, longer than many of you have been alive, why do people think that the key issues with China aren't primarily about trade at the moment.
OVERVIEW OF THE UNITED STATES TRADE ORIENTATION
Before 1940s, the US could be categorized as a free market protectionist economy. For many this may seem like oxymoron, how can an economy be free market and protectionist? In 1913, government spending made up about 7.5% of US GDP, in the UK it was 13%, and for Germany 18% (Public Spending in the 20th Century A Global Perspective: Ludger Schuknecht and Vito Tanzi - 2000). UK had virtual zero tariffs, while for manufactured goods in France it was 20%, 13% Germany, 9% Belgium and 4% Netherlands. For raw materials and agricultural products, it was almost zero. In contrast, for the likes of United States, Russia and Japan it was 44%, 84% and 30% respectively. Even though in 1900 United States was an economic powerhouse along with Germany, manufactured exports only made up 30% of exports, and the US government saw tariffs as exclusively a domestic policy matter and didn't see tariffs as something to be negotiated with other nations. The US didn't have the large constituency to push the government for lower tariffs abroad for their exports like in Britain in the 1830-40s (Reluctant Partners: A History of Multilateral Trade Cooperation, 1850-2000). The Underwood Tariffs Act of 1913 which legislated the income tax, dropped the tariffs to 1850 levels levels.Until 16th amendment was ratified in 1913 making income tax legal, all US federal revenue came from excise and tariffs. In contrast before 1914, about 50% of UK revenue came from income taxes. The reason for US reluctance to introduced income tax was ideological and the United State's relative weak government compared to those in Europe. After the First World War, the US introduced the Emergency Tariff Act of 1921, than the Fordney–McCumber Tariff of 1922 followed by a Smoot-Hawley Act of 1930. Contrary to popular opinion, the Smoot-Hawley Act of 1930 had a small negative impact on the economy, since imports and exports played a small part of the US economy, and the tariffs were lower than the average that existed from 1850-1914. Immediately after the Second World War, when the US economy was the only industrialized economy left standing, the economic focus was on rehabilitation and monetary stability. There was no grandiose and ideological design. Bretton Woods system linked the US dollar to gold to create monetary stability, and to avoid competitive devaluation and tariffs that plagued the world economy after Britain took itself off the gold in 1931. The US$ was the natural choice, because in 1944 2/3 of the world's gold was in the US. One reason why the Marshall Plan was created was to alleviate the chronic deficits Europeans countries had with the US between 1945-50. It was to rebuild their economies so they could start exports good to the US. Even before it was full implemented in 1959, it was already facing problems, the trade surpluses that the US was running in the 1940s, turned to deficits as European and Japanese economies recovered. By 1959, Federal Reserves foreign liabilities had already exceeded its gold reserves. There were fears of a run on the US gold supply and arbitrage. A secondary policy of the Bretton woods system was curbs on capital outflows to reduce speculation on currency pegs, and this had a negative impact on foreign investment until it was abandoned in 1971. It wasn't until the 1980s, where foreign investment recovered to levels prior to 1914. Factoring out the big spike in global oil prices as a result of the OPEC cartel, it most likely wasn't until the mid-1990s that exports as a % of GDP had reached 1914 levels. Until the 1980s, the US record regarding free trade and markets was mediocre. The impetus to remove trade barriers in Europe after the Second World War was driven by the Europeans themselves. The EEC already had a custom union in 1968, Canada and the US have yet to even discuss implementing one. Even with Canada it took the US over 50 years to get a Free Trade Agreement. NAFTA was inspired by the success of the EEC. NAFTA was very much an elite driven project. If the Americans put the NAFTA to a referendum like the British did with the EEC in the seventies, it most likely wouldn't pass. People often look at segregation in the US South as a political issue, but it was economic issue as well. How could the US preach free trade, when it didn't have free trade in its own country. Segregation was a internal non-tariff barrier. In the first election after the end of the Cold War in 1992, Ross Perot' based most of independent run for the Presidency on opposition to NAFTA. He won 19% of the vote. Like Ross Perot before him, Donald Trump is not the exception in how America has handled tariffs since the founding of the Republic, but more the norm. The embrace of free trade by the business and political elite can be attributed to two events. After the end of Bretton Woods in 1971, a strong vested interest in the US in the form of multinationals and Wall Street emerged advocating for removal of tariffs and more importantly the removal of restrictions on free flow of capital, whether direct foreign investment in portfolio investment. However, the political class embrace of free trade and capital only really took off after the collapse of the Soviet Union propelled by Cold War triumphalism. As mentioned by the article, the US is reverting back to a pre-WTO relations with China. As Robert Lighthizer said in speech in 2000
I guess my prescription, really, is to move back to more of a negotiating kind of a settlement. Return to WTO and what it really was meant to be. Something where you have somebody make a decision but have it not be binding.
The US is using financial and legal instruments developed during the Cold War like its extradition treaties (with Canada and Europe), and Section 301. Here is a very good recent article about enforcement commitment that China will make.‘Painful’ enforcement ahead for China if trade war deal is reached with US insisting on unilateral terms NOTE: It is very difficult to talk about US-China trade war without a basic knowledge of global economic history since 1914. What a lot of people do is politicize or subordinate the economic history to the political. Some commentators think US power was just handed to them after the Second World War, when the US was the only industrialized economy left standing. The dominant position of the US was temporary and in reality its like having 10 tonnes of Gold sitting in your house, it doesn't automatically translate to influence. The US from 1945-1989 was slowly and gradually build her influence in the non-Communist world. For example, US influence in Canada in the 1960s wasn't as strong as it is now. Only 50% of Canadian exports went to the US in 1960s vs 80% at the present moment.
BASIS OF THE US TRADE DISCUSSION WITH CHINA
According to preliminary agreement between China and the US based on unnamed sources in the Wall Street Journal article US, China close in on Trade Deal. In this article it divides the deal in two sections. The first aspects have largely to do with deficits and is political.
As part of a deal, China is pledging to help level the playing field, including speeding up the timetable for removing foreign-ownership limitations on car ventures and reducing tariffs on imported vehicles to below the current auto tariff of 15%. Beijing would also step up purchases of U.S. goods—a tactic designed to appeal to President Trump, who campaigned on closing the bilateral trade deficit with China. One of the sweeteners would be an $18 billion natural-gas purchase from Cheniere Energy Inc., people familiar with the transaction said.
The second part will involve the following.
Commitment Regarding Industrial Policy
Provisions to protect IP
Mechanism which complaints by US companies can be addressed
Bilateral meetings adjudicate disputes. If talks don't produce agreement than US can raise tariffs unilaterally
China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
China directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer.
China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.
In the bigger context of trade relations between US and China, China is not honoring its WTO commitments, and the USTR issued its yearly report to Congress in early February about the status of China compliance with its WTO commitments. The points that served as a basis for applying Section 301, also deviate from her commitments as Clinton's Trade Representative Charlene Barshefsky paving the way for a trade war. Barshefsky argues that China's back sliding was happening as early as 2006-07, and believes the trade war could have been avoided has those commitments been enforced by previous administrations. I will provide a brief overview of WTO membership and China's process of getting into the WTO. WTO members can be divided into two groups, first are countries that joined in 1995-97, and were members of GATT, than there are the second group that joined after 1997. China joined in 2001. There is an argument that when China joined in 2001, she faced more stringent conditions than other developing countries that joined before, because the vast majority of developing countries were members of GATT, and were admitted to the WTO based on that previous membership in GATT. Here is Brookings Institute article published in 2001 titled "Issues in China’s WTO Accession"
This question is all the more puzzling because the scope and depth of demands placed on entrants into the formal international trading system have increased substantially since the formal conclusion of the Uruguay Round of trade negotiations in 1994, which expanded the agenda considerably by covering many services, agriculture, intellectual property, and certain aspects of foreign direct investment. Since 1994, the international community has added agreements covering information technology, basic telecommunications services, and financial services. WTO membership now entails liberalization of a much broader range of domestic economic activity, including areas that traditionally have been regarded by most countries as among the most sensitive, than was required of countries entering the WTO’s predecessor organization the GATT. The terms of China’s protocol of accession to the World Trade Organization reflect the developments just described and more. China’s market access commitments are much more far-reaching than those that governed the accession of countries only a decade ago. And, as a condition for membership, China was required to make protocol commitments that substantially exceed those made by any other member of the World Trade Organization, including those that have joined since 1995. The broader and deeper commitments China has made inevitably will entail substantial short-term economic costs.
What are the WTO commitments Barshefsky goes on about? When countries join the WTO, particularly those countries that weren't members of GATT and joined after 1997, they have to work toward fulfilling certain commitments. There are 4 key documents when countries make an accession to WTO membership, the working party report, the accession protocol paper, the goods schedule and service schedule. In the working party report as part of the conclusion which specifies the commitment of each member country what they will do in areas that aren't compliant with WTO regulations on the date they joined. The problem there is no good enforcement mechanism for other members to force China to comply with these commitments. And WTO punishments are weak. Here is the commitment paragraph for China "The Working Party took note of the explanations and statements of China concerning its foreign trade regime, as reflected in this Report. The Working Party took note of the commitments given by China in relation to certain specific matters which are reproduced in paragraphs 18-19, 22-23, 35-36, 40, 42, 46-47, 49, 60, 62, 64, 68, 70, 73, 75, 78-79, 83-84, 86, 91-93, 96, 100-103, 107, 111, 115-117, 119-120, 122-123, 126-132, 136, 138, 140, 143, 145, 146, 148, 152, 154, 157, 162, 165, 167-168, 170-174, 177-178, 180, 182, 184-185, 187, 190-197, 199-200, 203-207, 210, 212-213, 215, 217, 222-223, 225, 227-228, 231-235, 238, 240-242, 252, 256, 259, 263, 265, 270, 275, 284, 286, 288, 291, 292, 296, 299, 302, 304-305, 307-310, 312-318, 320, 322, 331-334, 336, 339 and 341 of this Report and noted that these commitments are incorporated in paragraph 1.2 of the Draft Protocol. " This is a tool by the WTO that list all the WTO commitment of each country in the working paper. In the goods and service schedule they have commitments for particular sectors. Here is the a press release by the WTO in September 2001, after successfully concluding talks for accession, and brief summary of key areas in which China hasn't fulfilled her commitments. Most of the commitments made by China were made to address its legacy as a non-market economy and involvement of state owned enterprises. In my opinion, I think the US government and investors grew increasingly frustrated with China, after 2007 not just because of China's back sliding, but relative to other countries who joined after 1997 like Vietnam, another non-market Leninist dictatorship. When comparing China's commitments to the WTO its best to compare her progress with those that joined after 1997, which were mostly ex-Soviet Republics. NOTE: The Chinese media have for two decades compared any time the US has talked about China's currency manipulation or any other issue as a pretext for imposing tariffs on China to the Plaza Accords. I am very sure people will raise it here. My criticism of this view is fourfold. First, the US targeted not just Japan, but France, Britain and the UK as well. Secondly, the causes of the Japan lost decade were due largely to internal factors. Thirdly, Japan, UK, Britain and France in the 1980s, the Yuan isn't undervalued today. Lastly, in the USTR investigation, its China's practices that are the concern, not so much the trade deficit.
REASONS FOR TRUMPS UNILATERAL APPROACH
I feel that people shouldn't dismiss Trump's unilateral approach toward China for several reasons.
The multilateral approach won't work in many issues such as the trade deficit, commercial espionage and intellectual property, because US and her allies have different interest with regard to these issues. Germany and Japan and trade surpluses with China, while the US runs a deficit. In order to reach a consensus means the West has to compromise among themselves, and the end result if the type of toothless resolutions you commonly find in ASEAN regarding the SCS. Does America want to "compromise" its interest to appease a politician like Justin Trudeau? Not to mention opposition from domestic interest. TPP was opposed by both Clinton and Trump during the election.
You can't launch a geopolitical front against China using a newly formed trade block like the TPP. Some of the existing TPP members are in economic groups with China, like Malaysia and Australia.
China has joined a multitude of international bodies, and at least in trade, these bodies haven't changed its behavior.
Trump was elected to deal with China which he and his supporters believe was responsible for the loss of millions manufacturing jobs when China joined the WTO in 2001. It is estimate the US lost 6 Million jobs, about 1/4 of US manufacturing Jobs. This has been subsequently advanced by some economists. The ball got rolling when Bill Clinton decided to grant China Most Favored Nation status in 1999, just a decade after Tiananmen.
China hasn't dealt with issues like IP protection, market access, subsidies to state own companies and state funded industrial spying.
According to the survey, 39 percent of the country views China’s growing power as a “critical threat” to Americans. That ranked it only eighth among 12 potential threats listed and placed China well behind the perceived threats from international terrorism (66 percent), North Korea’s nuclear program (59 percent) and Iran’s nuclear program (52 percent). It’s also considerably lower than when the same question was asked during the 1990s, when more than half of those polled listed China as a critical threat. That broadly tracks with a recent poll from the Pew Research Center that found concern about U.S.-China economic issues had decreased since 2012.
In looking at how US conducts relations foreign policy with China, we should look at it from the three areas of most concern - economic, national security and ideology. Each sphere has their interest groups, and sometimes groups can occupy two spheres at once. Security experts are concerned with some aspects of China's economic actions like IP theft and industrial policy (China 2025), because they are related to security. In these sphere there are your hawks and dove. And each sphere is dominated by certain interest groups. That is why US policy toward China can often appear contradictory. You have Trump want to reduce the trade deficit, but security experts advocating for restrictions on dual use technology who are buttressed by people who want export restrictions on China, as a way of getting market access. Right now the economic concerns are most dominant, and the hawks seem to dominate. The economic hawks traditionally have been domestic manufacturing companies and economic nationalist. In reality the hawks aren't dominant, but the groups like US Companies with large investment in China and Wall Street are no longer defending China, and some have turned hawkish against China. These US companies are the main conduit in which China's lobby Congress, since China only spends 50% of what Taiwan spends lobbying Congress. THE ANGLO SAXON WORLD AND CHINA I don't think many Chinese even those that speak English, have a good understanding Anglo-Saxon society mindset. Anglo Saxons countries, whether US, UK, Canada, Australia, New Zealand and Ireland are commerce driven society governed by sanctity of contracts. The English great philosophical contributions to Western philosophy have primarily to do with economics and politics like Adam Smith, John Locke, David Hume and Thomas Hobbes. This contrast with the French and Germans. Politics in the UK and to a lesser extent the US, is centered around economics, while in Mainland Europe its religion. When the Americans revolted against the British Empire in 1776, the initial source of the grievances were taxes. Outside of East Asia, the rest of the World's relationship with China was largely commercial, and for United States, being an Anglosaxon country, even more so. In Southeast Asia, Chinese aren't known for high culture, but for trade and commerce. Outside Vietnam, most of Chinese loans words in Southeast Asian languages involve either food or money. The influence is akin to Yiddish in English. Some people point to the Mao and Nixon meeting as great strategic breakthrough and symbol of what great power politics should look like. The reality is that the Mao-Nixon meeting was an anomaly in the long history of relations with China and the West. Much of China-Western relations over the last 500 years was conducted by multitudes of nameless Chinese and Western traders. The period from 1949-1979 was the only period were strategic concerns triumphed trade, because China had little to offer except instability and revolution. Even in this period, China's attempt to spread revolution in Southeast Asia was a threat to Western investments and corporate interest in the region. During the nadir of both the Qing Dynasty and Republican period, China was still engaged in its traditional commercial role. Throughout much of history of their relations with China, the goals of Britain and the United States were primarily economic, IMAGINE JUST 10% OF CHINA BOUGHT MY PRODUCT From the beginning, the allure of China to Western businesses and traders has been its sheer size I. One of the points that the USTR mentions is lack of market access for US companies operating in China, while Chinese companies face much less restrictions operating in the US.
China uses joint venture requirements, foreign investment restrictions, and administrative review and licensing processes to require or pressure technology transfer from U.S. companies.
China deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations.
Trade with China has hurt some American workers. And they have expressed their grievances at the ballot box. So while many attribute this shift to the Trump Administration, I do not. What we are now seeing will likely endure for some time within the American policy establishment. China is viewed—by a growing consensus—not just as a strategic challenge to the United States but as a country whose rise has come at America’s expense. In this environment, it would be helpful if the US-China relationship had more advocates. That it does not reflects another failure: In large part because China has been slow to open its economy since it joined the WTO, the American business community has turned from advocate to skeptic and even opponent of past US policies toward China. American business doesn’t want a tariff war but it does want a more aggressive approach from our government. How can it be that those who know China best, work there, do business there, make money there, and have advocated for productive relations in the past, are among those now arguing for more confrontation? The answer lies in the story of stalled competition policy, and the slow pace of opening, over nearly two decades. This has discouraged and fragmented the American business community. And it has reinforced the negative attitudinal shift among our political and expert classes. In short, even though many American businesses continue to prosper in China, a growing number of firms have given up hope that the playing field will ever be level. Some have accepted the Faustian bargain of maximizing today’s earnings per share while operating under restrictions that jeopardize their future competitiveness. But that doesn’t mean they’re happy about it. Nor does it mean they aren’t acutely aware of the risks — or thinking harder than ever before about how to diversify their risks away from, and beyond, China.
What is interesting about Paulson's speech is he spend only one sentence about displaced US workers, and a whole paragraph about US business operating in China. While Kissinger writes books about China, how much does he contribute to both Democrats and the Republicans during the election cycle? China is increasingly makING it more difficult for US companies operating and those exporting products to China.
-Pakistan to be out of FATF's grey list by September, promises Central Bank Islamabad will strictly implement the requirements of the Financial Action Task Force (FATF) in order to get out of the money laundering grey list released by the Paris-based body, a senior official of Pakistan's Central Bank said on Wednesday. FATF had previously placed Pakistan on its watch list of countries that need to do more in relation to anti-money laundering and combating the financing of terrorism. "The FATF challenge has be to be addressed. Pakistan has mandated upon itself to enforce the FATF plan in letter and spirit. Whatever the requirements about the FATF plan are, they will be imposed and Pakistan will be out of grey list by September 2019. FATF is a risk but we are addressing it in the right letter and spirt," said Syed Irfan Ali, executive director for Banking Policy and Regulation Group at the State Bank of Pakistan. -NAB finds 'proof of massive money laundering' against Sharif family The Sharif family’s troubles seem set to worsen as reports suggest the National Accountability Bureau (NAB) has found evidence of massive money laundering through which Shehbaz Sharif and his family members accumulated assets in the United Kingdom. According to sources privy to NAB’s investigation, the illegally accumulated assets are worth Rs85 billion to Rs100 billion and were bought during Shehbaz’s tenure as Punjab chief minister. They said the evidence found was irrefutable and showed striking similarities with the money laundering and fake accounts case against former president Asif Ali Zardari and other Pakistan Peoples Party leaders. -US debunks Indian claims of shooting down PAF F-16 Indian claims of shooting down a Pakistan Air Force (PAF) F-16 on February 27 were debunked by US officials as all aircraft are accounted for. Pakistan invited US officials to physically count the F-16 planes after the incident. Some of the aircraft were not immediately available for inspection due to the conflict, so it took US personnel several weeks to account for all of the jets, one of the officials said. The report stated that two US defence officials with direct knowledge of the matter said US personnel had done a count of Pakistan’s F-16s and found none missing. -Finance minister rules out further rupee devaluation Finance Minister Asad Umar on Friday ruled out the need for further devaluation of the Pakistani rupee as the currency stands at equilibrium. “The International Monetary Fund (IMF) has made no demand for rupee devaluation,” Umar clarified categorically while addressing at Pakistan Stock Exchange (PSX) through online video conference. “Today, the State Bank of Pakistan (SBP) has clarified the rupee is standing at equilibrium,” he said. Dismissing reports of further devaluation, he added: “Stop circulating rumors that Asam Umar has said rupee would depreciate to 160 or 180.” -o For the Centre for Social Justice (CSJ) in Lahore, Christian children have the right to study the Bible, Hindu children have the right to study the Bhagavat Gita and Buddhist children have the right to study the Vedas. Together with the People’s Commission for Minorities Rights (PCMR), the CSJ held a conference on 29 March in which they adopted a resolution entitled ‘Right to education without discrimination’ demanding the right of minorities to teach their own religion in schools, as guaranteed by Article 22 of the Pakistani Constitution. Currently, only Islam is taught in schools. -China’s BeiDou Navigation System Will be Able to Replace GPS in Pakistan Soon Pakistani military reliance on the US-owned Global Positioning System (GPS) will be reduced after the use of China’s Beidou satellite navigation system which is projected to achieve global coverage by 2020. This was the crux of background discussions between former military officials and telecom experts. Beidou is the world’s fourth space-based navigation system, following GPS by the United States, GLONASS by Russia and Galileo by the European Union. According to experts, the satellite-based system plays a vital role in the modern world, especially during wartime. -PM Imran Khan announces unprecedented 10 years development package for tribal districts Prime Minister Imran Khan has announced a ten-year special development package for tribal districts. Addressing a big public meeting at Jamrud, Khyber district this evening, he said one hundred billion rupees will be spent on the development of tribal areas each year. He said health, education and sports facilities in tribal areas will be enhanced. -SBP’s Forex Reserves Cross the $10 Billion Mark The foreign exchange reserves of State Bank of Pakistan (SBP) have crossed the $10 billion mark by March-end. During the week that ended on 29 March 2019, SBP received inflows of RMB 15 billion (equivalent to US$2.2 billion) as proceeds of the loan obtained by the government of Pakistan from China. After taking into account outflows relating to external debt and other official payments, SBP reserves increased by $1.931 billion during the week. -Benami Properties: FBR takes an unprecedented step Federal Board of Revenue has established three Benami Zones at Karachi, Lahore and Islamabad for enforcement of Benami Transaction (Prohibition) Act, 2017. In a press release issued today (Thursday), it was said after examination of available information FBR Benami Zones Karachi and Lahore have issued show cause notices in six cases of Companies holding shares and immovable properties as Benamidar. -Ministry of Finance proposed to amend Foreign Exchange Regulations Act in Pakistan Ministry of Finance has proposed to amend the Foreign Exchange Regulations Act 1947 to prevent illegal foreign exchange transactions. Under the proposal, the previous act will be updated with an amendment act to empower the State Bank of Pakistan to regulate foreign exchange regime in the country more effectively. It said proposed amendment has been approved by the Federal Cabinet and transmitted to Parliament for enactment. The measure is a part of government's efforts to enhance the transparency of financial transactions. -KP government launches 'Pink Bus Service' exclusively for women Khyber Pakhtunkhwa government launched on Thursday ‘Pink Bus Service’ exclusively for women in Mardan. A spokesman of the project told our Peshawar correspondent that a total of seven Pink Buses will ply in Mardan. There are fifteen bus stops each facilitated with the solar panels. -Pakistan makes a new offer to Iran, FTA in works Pakistan has invited Iran for talks on a free trade agreement (FTA). Pakistan has proposed that talks could be held on April 23-24 in Pakistan. The report added that lack of direct banking channel between the two countries is the main hurdle in finalizing the free trade agreement. -Govt Mulling to Withdraw 10% FED on 1,700cc Vehicles: Abdul Razaq The government is considering to withdraw its decision of imposing 10% federal excise duty (FED) on cars with engine capacities exceeding 1,700cc. The Senate’s Standing Committee on Industries and Production, on Wednesday, was informed that the 10 percent FED imposed on locally manufactured cars and SUVs, having engine capacity exceeding 1,700cc, would be withdrawn soon. -Govt to Crackdown Against High Medicine Prices & Launch An Online Price Portal The federal government has ordered a crackdown against pharmaceutical companies that are illegally increasing medicine prices. Minister for National Health Services (NHS), Aamer Mehmood Kiani, ordered an operation against such firms on Wednesday. “Though the Drug Regulatory Authority of Pakistan (DRAP) deals with the matter, as a government representative, I consider myself responsible for providing relief to the masses and answerable to them. I am personally looking into the matter and would not tolerate an illegal and unauthorized increase in the prices of medicines,” the minister said. -Pakistan’s First Environment Friendly Food Festival to Start on 5th April To discourage single-use plastics and promote sustainable food consumption, WWF-Pakistan is organizing the country’s first environmental-friendly food festival in Karachi. The festival, ReFest, aims to reduce food waste and raise awareness about eating food in a responsible way as well as adopting sustainable practices in our daily lives such as reduced use of single-use plastics. The theme of the festival is to spread awareness about the cause and enjoy the festivals responsibly, as per WWF, festivals were one of the reasons of over-littering due to massive use of single-use plastic in food festivals. The idea is to promote a sense of responsibility among citizens about how we can enjoy and be responsible at the same time. -Gilgit is Getting a Dedicated Tourism Police Division Gilgit-Baltistan Inspector General of Police (IGP) Sanaullah Abbasi said that a special tourism force will be formed in the region to ensure the safety of national and foreign tourists. He also told that the GB government will deploy 700 personnel for the protection of the China-Pakistan Economic Corridor route. The special tourism force called, “Tourism Police Division” will be set up on the model of Malaysia and Thailand. -PM takes part in Hyderabad University’s Groundbreaking Ceremony. The project is projected to complete within 3 years, with over Rs. 2 billion as the estimated cost. The land for building the university has been marked in Kohsar. A bill will be passed from the National Assembly for the construction of the university. The name of the university has been decided as “Federal Urdu University Hyderabad”. -Facebook Launches Its Innovation Lab Platform in Pakistan Facebook and Pakistan’s Ministry of Information Technology along with the National Technology Fund (IGNITE) launched the first Facebook Innovation Lab located in the National Incubation Centre (NIC) at the Lahore University of Management Sciences (LUMS). The launch event, held on Wednesday, April 3, 2019, was attended by several thought leaders from across the world who came together and debated on issues such as women and technology; the impact that VR has on social good and impactful ways to harness technology for social good. -UN Adopts Pakistan Sponsored Resolution Against Islamophobia The United Nations General Assembly (UNGA) unanimously adopted a resolution on Tuesday strongly condemning acts of violence and terrorism against religious minorities.mThe resolution, titled ‘Combating terrorism and other acts of violence based on religion or belief’ was moved by Turkey and co-sponsored by Pakistan. Through this, the UNGA condemned the atrocious terrorist attack targeting Muslims during Friday prayers in two mosques at Christchurch, New Zealand this month, while offering deepest condolences to the victim families.The UN assembly called for the protection and promotion of freedom of religion and belief while developing a domestic environment of religious tolerance, respect, and peace. -Government announces changes for new budget With the new budget coming up, the Pakistan Tehreek-e-Insaf (PTI) government announced on Tuesday its first tax amnesty scheme on hidden domestic and offshore assets – in an attempt to boost the sinking tax revenue. Besides, the government announced that it would stop the unchecked outflow of dollars through foreign currency accounts, declaring its intention to amend laws to link the outflows for investment with the approval of the authorities. “An asset declaration scheme will be announced before the budget,” Finance Minister Asad Umar told journalists. -First ever Pakistani international tourism corner opens in Europe Pakistan has opened its first International Information Tourist Corner in Belgium to offer Europeans Pakistan’s unique culture, stunning scenic view of its northern areas and the traditional lifestyle of mountain people. Launched jointly in collaboration with the Embassy of Pakistan in Brussels and Tribes, a Dutch Company established in Brussels, the tourist corner is the first-ever initiative by the Pakistani mission in Belgium to promote tourism in Pakistan -Asad Umar hints at withdrawing tax exemptions for elite Finance Minister Asad Umar on Tuesday hinted at withdrawing tax exemptions being availed by the elite and also announced a drastic reduction in the number of withholding taxes from the next budget including the tax on banking transactions being paid by non-filers of tax returns. The minister expressed these views at the launching ceremony of a book, ‘Growth and Inequality in Pakistan – Agenda for Reforms’. The book has been written by Dr Hafiz A Pasha whom Umar described as Pakistan’s number one economist. Friedrich Ebert Stiftung – a German institute – has financed the book under the theme of ‘Economy of Tomorrow’. The book discusses almost every important aspect of Pakistan’s economy and carries a detailed chapter on elite capture of the state. -PM Imran Khan to perform ground breaking of two Naya Pakistan Housing Programme sites Prime Minister Imran Khan is expected to perform the ground-breaking ceremony of two housing projects in Islamabad and Quetta later this month. Both projects are part of PM Khan’s ambition of Naya Pakistan Housing Program (NPHP) under which he promised to deliver 500,000 low-cost residential units to the underprivileged faction of the society. -PM Khan announces economic corridor between KP Khyber and Afghanistan PM Imran Khan has announced formation of economic corridor between KP Khyber and Afghanistan for improving trade and economic activities in the region. PM Khan announced that he has issued directives for the Torkham border with Afghanistan to be kept open 24/7 in order to facilitate business and trade for locals. -First woman principal appointed at K-P police training centre A police training centre in Khyber Pakhtunkhwa’s (K-P) Mansehra has appointed a woman principal – a first for the province. Sonia Shamroz, an MBA in human resource management and an 18-grade officer, termed her appointment to the billet as a matter of great pride for her family and herself. -Pakistan expected to get significant export orders at Istanbul fair Pakistan Consul General in Istanbul Bilal Khan Pasha has said that the auto industry of Pakistan, especially the manufacturers of auto and tractor parts, tyres and tubes, has the potential to make inroads into the Turkish market. “Turkish automakers and Pakistani engineering companies are negotiating to form joint ventures; in the next phase small and medium enterprises of the two countries will enter into partnerships,” Pasha said while talking to The Express Tribune on the sidelines of the Automechanica exhibition, which kicked off in Istanbul on Thursday. “This year, Pakistani companies manufacturing auto and tractor parts as well as tyre tubes are expected to get significant export orders at Automechanica, which will help increase non-traditional goods export from Pakistan to Turkey,” the consul general said. -PM Imran urges lawmakers to share meal with homeless at govt shelters Prime Minister Imran Khan on Saturday urged lawmakers to visit the homeless at government shelters and “share a meal with the people using them”. The premier asserted that this practice will sensitise public representatives to issues faced by the bottom tier Pakistani society. “In the coming months I will personally monitor effectiveness of our poverty alleviation jihad,” the prime minister went on to add in a tweet.
Press Conference with the Governor of the People's Bank of China 任中国人民银行行长 Yi Gang 易纲 on current monetary and regulatory matters in the People's Republic of China for the year 2021
Dear Ladies and Gentlemen, I shall be presenting the position of the People's Bank of China on the current forecast for the fiscal year 2021, with emphasis on the growth predicted for the country and the ramifications it has for the monetary policy of the PBOC. Additionally, I shall address the demand for the People's renminbi as a reserve currency for the Federal Republic of India. Concerning the growth of the economy for 2021, official growth stands at 6,3 percent. We raise our satisfaction with some positive changes have occurred in the structural adjustments of the Chinese economy in previous quarters, but deep problems remain amid uncertainties. While the the trade war with the United States has been officially ended and there has been regulatory and financial reform, we raise concerns with the additional oversight that has been placed on the digital economy and infrastructure of firms operating in the country. We would like to raise - in coordination with the State Council, that the policy is in response to both the U.S. CLOUD Act and European GPDR to which the burden is regrettable. Of more pressing concern is the slowing growth for the year that has missed the official target of the PBOC and the government. Thus I shall state that the People's Bank will continue the prudent monetary policy that is neither too loose or too tight, and ensure reasonably ample liquidity in the interbank market. However. The Bank shall begin a further stimulus package to address the slowing growth through creating further domestic credit growth and boost consumer demand. The additional aim will be to allow for easier borrowing for businesses that does not hold substantial non-performing loans that have been flagged to the Ministry of Finance. This relates to the new Supplementary Measures that are now being issued:
Article 1. In the process of identifying nonperforming loans, all banks shall strictly abide by the relevant stipulations of the Measures with regard to the statistics and identification of bad loans. Bad loans identified in accordance with the current regulations stipulated by the Ministry of Finance may be reported individually.
Article 2. Standards and procedures stipulated by the Ministry of Finance shall continuously apply to the verification of bad loans. We herein request all branches of the People’s Bank of China to pass this Notification to the urban commercial banks, urban credit cooperatives, rural credit cooperatives and their affiliates, credit investment companies, financial companies, and financing and leasing companies within their geographical jurisdiction.
Regarding State-Owned Enterprises, credit expansion will delegated by State-owned Assets Supervision and Administration Commission (SASAC), under guidance by the PBOC. With this screening policy in place - essentially window guidance, we hope to avoid flooding of inefficient credit creation. As to the matter of the size of the stimulus, the PBOC shall roll out a $260 billion package, with targeted support for performing small- and medium banks that have has viable credit profiles. Banks that fail to meet this requirement shall be reported to regulators to shore up, with asset sell-offs and NPL write offs - with the State-owned Assets Supervision and Administration Commission (a percentage of the $144 billion operating budget has been allocated for this write-off, complimented with the National Debt Service allocations as outlined by the Ministry of Finance's projected budget for 2021) Concerning the state of the renminbi and its valuation, should growth projections worsen, the Bank is willing act robustly in the defence of the currency. Current repo rates shall remain in line and compliment current inflation metrics. Concerning more fascinating matters, the internationalisation of the renminbi is a policy that we at the PBOC would encourage policy makers to continue upon. Due to the dominance of the American dollar, the US government can issue debt and print money freely. It gains from seigniorage, as people hold dollars for use in transactions. As the world has seen, especially in recent years, control of dollar-clearing systems enables the United States to limit others’ financial access - which is of particular concern for the PBOC. Many global goods, especially commodities, are priced in dollars. These benefits also provide the United States with political gains and soft power. The same can be assumed for the renminbi and China should further relaxation of capital accounts and the not too loose or restricted monetary policy of the PBOC continues as it has. From 2009, the dollar has held steady at 60% of global reserves over the past decade, after declining from 70%. With the euro area’s troubles, the euro’s share has slipped; developing economies now hold about 24% of their reserves in euros, down from 31% in 2009. Other currencies – Swiss, Australian, Canadian – increased their attractiveness for a time, but their market size is limited and cyclical conditions have dampened some interest. The Japanese yen and British pound will continue to play a modest role, though we remain pessimistic on the role of the British pound should a No Deal Brexit be followed through. SDRs, which represent less than 3% of global reserves, suffer from a lack of private trading, invoicing, borrowing and lending, granted the renminbi has been added to the basket peg in which SDRs are issued by the IMF. Given the decision of the Indian government to divest from the their dollar holdings, the PBOC shall announce the sell of $20 billion of National Government Bonds to the Reserve bank of India as well as a purchase of $30 billion worth of renminbi to be held in forex reserves. Due to this measure, we hope to see that the liquidity of the Renminbi expands as international interest picks up, to which the PBOC shall facilitate all currency purchases as well as bond issuance to those who seek a stable investment.
ADE Group cooperates with BBDB,expanding global digital financial market
On 7th, November, 2019, Sydney time, ADE Group reached a strategic cooperation with BBDB (British Business Development Bank). Both sides will be having an in-depth long-term cooperation in fields such as blockchain, small and micro enterprises equity investment, cross-border payment. The aim of the cooperation is to expand global digital financial market by achieving the integration of resources in products, services, technology and channels. https://preview.redd.it/ofbm62llo6x31.png?width=1153&format=png&auto=webp&s=e1b34d2c5c211eb11b586482574fb632e3334b3b Authorized and supervised by FCA(The Financial Conduct Authority), BBDB has a huge market in the UK and Europe region. As early as in 2018, it has already laid its eyes on blockchain technology and announced to provide solid financial support for potential small and micro enterprises’ digital transformation. According to Tracking Report for Small and Micro Enterprises Equity Investment(2019) released by BBDB earlier this year, in 2018, the total equity investment amount of small and micro enterprises in the UK reaches the peak, about 6.7 billion pounds(about 12.5 billion AUD), exceeding the total amount of 6.4 billion pounds in 2017. Meanwhile, the year of 2018 also marks the second year of total transaction volume topping 6 billion pounds. Technology companies have been the leading role in equity investment, taking up 44% of the total investment amount. In the past decade, the number of venture capital unit in the UK has been growing faster than the U.S.. In the UK, there are about 570 VC transactions per trillion pounds of GDP, which is 18% higher than 482 VC transactions in the U.S.. Mr. Morgan, the chief executive of BBDB said, “it can be seen from this report that 2018 is the year for small and micro enterprises equity financing market, as the investment amount skyrocketed to 6.7 billion pounds. It shows the investors’ confidence in the development of small and micro enterprises as well as their potential in growth. Established in November, 2014, British Business Development Bank is owned by British government with the mission to provide better operation for small and micro enterprises in financial market. By the end of December, 2018, it has provided services for more than 85,000 small and micro enterprises with the total financing amount topping 6.4 billion pounds. This cooperation will enhance ADE group’s competitiveness in financial market. Firstly, with its popularity in Europe, BBDB will be able to help ADE Group to open the whole European market by assisting more potential small and micro enterprises to be listed on ADEex and add an endorsement for ADEex. Secondly, this cooperation will fasten the construction and development of ADE Digital Currency Bank and provide services including digital assets storage, forex, loans and smart investment and consulting for companies and users around the globe. Through this cooperation, BBDB will become an essential part of ADE Global Ecology. It will partner with ADE Group to help build ADE Global Ecological Community and manage European community. Moreover, it will help explore more markets and expand ADE Global Ecological Community by the means of utilizing all resources of financial networks in Europe. Mr. Caspar, head of international division of BBDB attended the signing ceremony and said, “We have always committed to providing financial support for small and micro enterprises and building a more diversified financial market. This cooperation with ADE Group will make us the frontier in the path of financial innovation and digitalization. ADE Group and us obviously both share the same thought and idea regarding the future of fin-tech world and construction of community ecology. Based on our rich experience in financial services and R&D ability in technology, we have every confidence to provide broader digital financial application scenarios for global users.”
Press Conference with the Governor of the People's Bank of China 任中国人民银行行长 Yi Gang 易纲 on current monetary and regulatory matters in the People's Republic of China for the year 2022
Dear Ladies and Gentlemen The People's Bank of China (PBOC) is gladdened to announce that the efforts made by the Bank to consolidate financial markets and reign in unproductive credit and the misappropriation in debt lending are seeing bountiful returns. For the 2022 year forecast, we are thus heartened to state that the economy has exponentially preformed to bring growth above 7 percent, beating negative analysis on efforts on the PBOC and government's meaningful reforms to address core structural issues that have threatened the Chinese and global economy. While we have identified specific measures in relation to consumer demand and business growth, in conjunction with the improving regulatory framework, we foresee promising inflationary movement and are pleased to see an adaptive labour market take hold in overall trends for key benchmarks. In regards to the current developments in the Banks's stimulus efforts, we shall maintain the current level of market guidance and capital assistance. While we continue this approach, we are constantly assessing the Mainland's capital markets liquidity and should concerns be spotted that identify general overheating, the PBOC is ready to address those concerns and enforce targeted measures. Now, onto the main elements of the year's statement: the current status on the internationalisation of the Renminbi and policy responses to optimise a favourable environment as well as new guidelines on capital market The following discussion shall be complimented with the following handout:
The Renminbi - The People's Currency, and Soon the World's?
The Continued Dollar Dominance
First, a blunt fact: while multiple reserve currencies have co-existed before, and of course dominance today does not guarantee dominance in the future, with the British pound's fall as a gentle reminder of this, the PBOC is pragmatic in stating that dollar's demise looks a long ways off. Part of this is the on-the-ground data indicating that the drive to internationalisation has indeed lost much of its momentum as a reserve currency.
There is no better reminder that the US dollar is dominant than the rout across emerging market economies sine 2016-2020. The worst-performing currencies of 2019 shared a disproportionate reliance on the greenback. In 2015, 62 per cent of countries anchored their currencies to the dollar and about the same percentage of developing countries borrow in the currency.
On the other hand, less than 30 per cent of countries use the euro as an anchor for their exchange rates and only 13 per cent of external debt for developing countries is euro-denominated. The pound and the yen barely show up in the data.
When it comes to global currency reserves held by central banks, the dollar is unrivalled. While its share of global foreign-exchange reserves has fallen for five consecutive quarters, global central banks have more or less held some 60 per cent or more of their reserves in the greenback since 1996. Even with a loss of confidence in US markets, forex holdings in the Renminbi have been somewhat insignificant.
Chinese Efforts to Open Up the Renminbi - An Uneven Effort
In March 2019, China introduced its first renminbi-denominated oil futures contract, an attempt to have an alternative for domestic and international investors and traders to the petro-dollar order. However until the central government creates bilateral agreement with major oil-producing (OPEC) states to accept payment in Renminbi, this will continue to see sub-optimal results.
Since gaining a spot in the IMF's Special Drawing Rights basket of reserve currencies in 2015, China has also extended local currency swaps with various countries, including those along its landmark Belt and Road initiative, as well as took steps to open up its local bond market to foreign investors. Though given the sputtering results in BRI agreements and the concerns on excessive lending to questionable projects/governments, the BRI as a route to internationalisation has taken a backseat for policy makers.
Of concern to the PBOC and MOF policy analysts is that internationalisation of China's currency has stalled, and by some measures even reversed. As in 2016, the Renminbi was the fifth most actively used currency for domestic and international payments, with a roughly 2 per cent share, according to SWIFT. That's a drop from 2014 and 2015 when the use of China's currency doubled — in a year — to 2.8 per cent.
When only international payments are considered, the Renminbi drops to eighth place behind: the dollar, which comprises nearly 45 per cent; the euro with 32 per cent; followed by the Japanese yen, British pound, Swiss franc, Canadian dollar and Australian dollar, which all have a share of 5 per cent or less.
Allowing market forces to play a larger role in determining the Renminbi's value and opening up the capital account would require a complete overhaul of the country's financial system. While we realise that such a policy shift would bring some expected gains, the PBOC sees little reason to make a great pivot towards liberalisation, but instead a concerted series of smaller policies - or to put it more traditionally, 'Crossing the river by grasping the stones on the riverbed.'
Making The Cross Across the Riverbed Towards A More Global Renminbi The PBOC has issued the following in its Guiding Measures to the Chinese Mainland and SAR financial markets:
A new rule shall be instituted on cross-border Renminbi FDI which stipulates that, in principle, all the foreign enterprises are allowed to raise Renminbi funds in offshore Renminbi markets and repatriate them back to the mainland in the form of FDI. Previously, the foreign firms’ behaviours of remitting Renminbi back into Mainland were subjected to the PBOC’s approval on a case-by-case basis.
These transactions are to be settled in Hong Kong accounts, thus increasing the amount of Yuan in circulation offshore; these offshore Renminbi will be distinctly referred to as CNH rather than the onshore CNY. Furthermore, this allows the PBOC to act should the policy be abused by market speculators looking for an easy entry into China's domestic capital markets.
This new rule will further buoy the offshore Renminbi (“Dim Sum”) bond market and accelerate the pace of Renminbi internationalisation.
The Ministry of Finance and the Ministry of Foreign Affairs shall begin to broker with OPEC states an agreement on settlement of trade in crude oil and its derivatives be conducted in Renminbi, in a further boost to the Shanghai International Energy Exchange and Shanghai crude oil futures market.
The extension of the “mini-QFII” scheme to India, Pakistan, ASEAN, the Republic of Korea and Japan which will allow some foreign central banks, beyond only a handful of smaller nearby Asian countries, to start building a limited amount of currency reserves even before anything like full currency convertibility will be authorised and conducted. QFII stands for Qualified Foreign Institutional Investor, a designation that allows a company to invest in Chinese bonds and equities — though again, within guiding limits issued by the PBOC on a case-by-case basis.
Regulators will begin a similar pilot scheme - RQFII - that would allow financial institutions with a physical mainland presence to remit currency from their Hong Kong subsidiaries back to the mainland — and, potentially, foreign central banks to invest small amounts of Renminbi in the Chinese interbank bond market.
The Hong Kong Monetary Authority already has QFII status, and the Monetary Authority of Singapore has applied, with the PBOC accepting further applications.
Foreign institutions will be given a capped access of no more than $100 million in Hong Kong accounts to derivatives, including financial futures, commodity futures and options in testing the markets' reaction to foreign operators.
https://preview.redd.it/bjix9mvdw2m31.png?width=864&format=png&auto=webp&s=0c7b463f7bcf30dfe1bff31aa70b33ca6e002e8f Article by Forbes: Joresa Blount In 2018, Asia was one of the leading regions in terms of growth of blockchain jobs, cryptocurrency usage, innovation, and general openness. Despite some early woes with China banning ICOs, China still produces nearly 70% of crypto mining activity. For users and entrepreneurs, the Asian ecosystem is in general a friendly one. For example, in Singapore Bitcoin is taxed as a good rather than a currency, setting a 7% flat tax for trades or purchases using Bitcoin. In Japan, messenger giant, LINE, was just granted a crypto exchange license from the Japanese financial regulator. In Korea, news just broke that the country’s largest entertainment company would be launching its own token. Besides the name brand companies that are exploring crypto solutions, there are hundreds of innovative startups and founders looking to radically disrupt their respective industries with blockchain technology. This list contains ten innovative blockchain startups based in Asia worth watching, including exchanges, fintech startups, and more. Today In: Innovation 1. Level01 Level01 is the world’s first broker less derivatives exchange in collaboration with Thomson Reuters. Through using blockchain technology, the platform eliminates middlemen while providing a decentralized trading experience. Users can trade derivatives and options in forex, cryptocurrencies, commodities, stocks and indices, all from the Level01 platform and app. Level01 does this by using Distributed Ledger Technology (DLT) for transparent and automated trade settlement on the blockchain, with their unique Artificial Intelligence (AI) analytics called Fairsense that provides fair value pricing dynamically to counterparties in a trade, based on current and retrospective market data from Thomson Reuters. The platform and app are currently undergoing stringent beta testing by 50 experienced traders. 2. Galaxy Pool Galaxy Pool, also known as GPO, is a brand-new asset issuance style on blockchain that utilizes intelligent contracts for initial digital asset issuance. In general, GPO assets can be best described as mining machines used to explore various kinds of digital assets that can obtain value-added benefits of GPO through the repurchase and destruction of pond profits. With this brand-new asset issuance style on blockchain, more humanistic investment opportunities with free withdrawal rights can be provided to investors. 3. Biki Headquartered in Singapore, BiKi.com is a global cryptocurrency exchange ranked Top 20 on CoinMarketCap. BiKi.com provides a digital assets platform for trading more than 150 cryptocurrencies and 220 trading pairs. Since its official opening in August 2018, BiKi.com is considered one of the fastest-growing cryptocurrency exchanges in the world with an accumulated 1.5 million registered users, 130,000 daily active users, over 2000 community partners and 200,000 community members in under a year. BiKi’s competitive advantages include helping projects with marketing, influencers, brand awareness, and community growth in the Chinese markets and abroad. With a global approach, BiKi also helps Chinese companies go global and international companies penetrate Chinese markets. 4. Whitebit With a global team of over 100 people, Whitebit is a professional digital asset trading platform that services most major Asian markets via a European license. The exchange holds 95% of user funds in cold wallets and offers users an intuitive user interface with real-time orderbooks, charting and technical analysis tools, and automation features. Whitebit’s major competitive advantage is processing speeds of up to 10,000 trades every second and 1,000,000 TCP connections. Whitebit has also announced the release of S.M.A.R.T. Box, a program that allows users to budget and allocate funds based on unique plans with varying durations and interest rates. Next is the launch of margin trading in Q4 2020, as well as mobile iOS and Android apps and an eventual US license. 5. Opu Labs Opu Labs is creating the self-care business model of the future starting with the skincare space. There are over 1.2 billion online skincare consumers with a $3 billion digital services business. Opu Labs helps make the decision-making process easier by offering free advice powered by AI, rewarding users for their purchase data using blockchain technology, and using robust technologies to connect brands and consumers. Under the leadership of CEO Marc Bookman, Opu Labs was named in the top 25 healthcare solutions by CIO Applications and won the start-up GrandSlam in Singapore. To date, $2m in rewards have been earned on the platform and the company will be releasing their long-awaited apps soon. 6. Coinsbit.io Thanks to his vast expertise, experience, and sense of the market, Nikolay Udianskyi created a high-quality crypto exchange called Coinsbit.io. Now leading the Asian crypto market, Coinsbit was named the best 2018 crypto exchange at Asian Blockchain Life 2019. Coinsbit is planning to further distinguish itself from the competition through a series of novel functions. Among its plans is a P2P microfinancing lending service that will enable users to borrow and lend money on the platform. Coinsbit will ensure privacy for all users and will not require borrowers to show their credit history. An additional planned feature is an invest box service, which will reward users who deposit cryptocurrency by paying them interest on various coins. 7. GST Coin GST is a comprehensive digital application platform which integrates encrypted payment currency, blockchain and artificial intelligence technology. It is dedicated to providing the most valuable intelligent digital asset service for every user and creating a new GST digital public chain in a diversified market structure. GST project is committed to using the most advanced technology to create the most perfect user experience, and it has always been in the forefront of the market in the decentralized security sharing architecture. GST was born out of MHC Asset Management Corporation, a high-tech enterprise engaged in R&D and innovation of blockchain technology. Their executive team includes CEO Ms. Zhang Qun and other leading technologists and entrepreneurs in China. 8. Columbu Columbu (CAT) is a global community-based open-source blockchain project that has been active since 2017. Under CTO David Su, CAT’s main focus is building a high-performance DAPP development platform and community encouraging and autonomous system based on software and hardware combined GCloud Everest computing platform. This is the world’s first public blockchain (distributed cloud) using CUDA and blockchain technology. The project will allow for a worldwide distributed and free economic collaborative network of intelligent economies. This will happen through a community incentive mechanism and autonomous system to build in real-time. The project has an ambitious roadmap that will include growing its global developer community and other projects within their ecosystem. 9. KBC Registered in Singapore, KBC is the powering token of a global financial infrastructure and range of products focused around gold. These products include an innovative Voice-over-Blockchain smartphone called IMpulse K1, a crypto payment merchant processor called K-Merchant, and a cryptocurrency exchange and trading platform. Together these products and entities combine to form the Gold Imperium, the company’s financial ecosystem. The company has attracted heavy interest from users who have seen the benefits of having both gold and cryptocurrency exposure, as well as the ease of use of being able to use each day to day through tokens such as KBC. As both markets expand, keep an eye on KBC. 10. TEXCENT TEXCENT is a Singaporean blockchain and fintech startup focused on fully-integrated solutions for remittance, payments, and microfinancing. Using blockchain technology, the company wants to provide seamless and convenient digital financial services solutions to Asia and the world. TEXCENT is currently focusing on the Philippines, Vietnam, Thailand as these markets will grow exponentially in the next 5 years. Their current products include PAYCENT, an app and hybrid wallet, as well as TEXCENT, a remittance solution with zero fees. TEXCENT has already acquired a remittance license from the Monetary Authority of Singapore (MAS) and is in the process of getting similar licenses for UK, Malaysia and Hong Kong in the coming months. The company is also a member of the Singapore Fintech Association.
Ah, but maybe you want to look around a bit and see how China’s total debt is compared with other economies, like this? （你可能想看看其他经济体与中国的债务情况相比是怎么样的，如下图）
（G10债务分布图） If you put China’s data on this chart, it will be somewhere around Canada and New Zealand. Guess Which Country Has Debt Of Nearly 1000% Of GDP... Shocking, isn’t it? 如果你将中国的数据插入上图进行比较的话，中国的数据大约会在加拿大和新西兰之间。猜猜看哪个国家债务大约是自己GDP的10倍....（英国）非常震惊吧 UK has almost 1000% Debt-to-GDP ratio, compared with China’s < 300% Debt-to-GDP ratio, mostly because of that over-sized financial debt - at the end of the day, the government must stand behind it. On top of that, the UK has no resource to sell, hardly any industry left, going through a divorce with EU, and almost never ever meets her fiscal targets. And yet, UK, with its near 1000% debt-to-GDP ratio, is still viewed as the gold standard among safe havens. PRESENTING: The Rosetta Stone Of The Entire Sovereign Debt Crisis Why? Because UK issues debt in her own currency. And who prints the pound? The UK government. 英国的债务/GDP占比将近1000%而中国只是小于300%，其原因是其过于庞大的金融债务——政府最终将不得不为之站台。在此之上，英国没用可出售的资源，没有任何本国工业，正在脱离欧盟，而且英国基本上从来没有达成其财务目标。即使如此，英国仍然被某些传媒视为安全经济体的黄金标准。其原因就是英债都以英镑的方式结算。那么是谁印英镑的呢？英国政府。 Then you take a look at Japan, wow that’s 600%+ debt-to-GDP ratio! But - Japan’s debt is not only mostly internal, in Japanese Yen, but also with 0% or even negative interest. You can roll this kind of debt over practically forever. That’s why people have been yelling about Japanese debt for the last 20 years, and nothing happens. 然后你看看日本，将近600%的债务/GDP占比！但是，日本的债务几乎都是内部的，以日元的形式出售的债务，而且日本是0利率甚至是负利率。实际上这种债务你可以无限积累下去(经济常识：如果是负利率，政府只要保持债务不变，多出来的部分会自行消失)。这就是为啥人们对日债担心了20年但屁事没有发生。 Then you take a look at those economies that have blown up on debt: Argentina: Government/Sovereign debt in USD, with jurisdiction in New York!Greece: Government/Sovereign debt in Euro, with jurisdiction in Brussels!Iceland: External financial debt → nationalized into Government/Sovereign debt in USD and Euro alone was 700%+ GDP in 2008, with jurisdiction in New York and Brussels. 然后你看看那些因债务问题毁掉的经济体： 阿根廷：政府/主权债务以美元形式结算，其裁判权在纽约!希腊：政府/主权债务以欧元方式结算，其裁判权在布鲁塞尔！冰岛：外部金融债务→债务国有化后2008年政府/主权债务以美元和欧元的形式达到GDP的700%，其裁判权在纽约和布鲁塞尔 Then you look at China, with her debt almost entirely internal, in Chinese RMB to Chinese citizens, government debt at 55%, lower than the US, Japan, and EU average, in her own currency. China’s external debt is about 9% of GDP, globally ranked 184th (less than North Korea, similar to Kosovo) - anyway you look at it, it’s hardly the kind of material to make a banking crisis. China is borrowing a little bit from her own piggy bank. Argentina/Greece/Iceland were borrowing a lot from the Mafia. 然后你看看中国，中国的债务基本都是内部以人民币结算的。中国政府债务只占总债务的55%，比美国，日本和欧盟都要低，再次强调，其债务以人民币结算。中国外部债务只占GDP的9%，全球排行184位（比朝鲜低，比科索沃高）。无论怎么看，你都不会看到中国有任何银行危机的迹象。中国只是向其国内贪心的银行借钱。阿根廷/希腊/冰岛可是像美国欧盟这些黑手党借钱。 PS: The most significant increase in China’s debt is in the financial sector, driven by rising real estate price (which means higher value of housing loans). Right now, the Chinese government is basically using it as a tool to do macro-economic engineering. The goal is to cap urban growth in top tier cities (Beijing, Shanghai, etc.) and push the economic growth to second- and third- tier cities (Hangzhou, the city that just hosted G20, is an example.http://www.g20.org/English/Hangzhou/About/index.html Now you can look back and see why the Chinese government decided to host G20 in a city nobody has ever heard of). This is clearly stated by the Chinese government like 100 times since last year in the official news channels. The reason? Top tier Chinese cities like Shanghai (25 million) already have more city residents than the whole nation of Australia! The metropolitan area of Shanghai (44 million) has more people than the entire population of Canada! In one city! Beijing’s population grew by 8 million within the last decade! The place is simply full.List of cities in China by population and built-up area PS: 中国最显著的债务增长是在其金融领域内不断升高的房价造成的（不断增高的房贷造成债务问题）。现在中国政府正在利用房价作为宏观经济调控的工具。其目的是限制一线城市的城市化进程和加速二三线城市的发展（刚刚举办了G20的杭州就是个例子，现在你就能知道为啥中国政府将G20放在一个没人听说过的城市举行了）。这些政策中国政府已经在官媒上宣布了无数次。原因就是一线城市，例如上海（2500万人口），其居民数量比阿根廷全国人口还要多！上海都市圈（4400万人口）的人口数量比加拿大全国还要多！北京人口数量在过去的10年内增长了800万！这些城市的人口数量已经饱和了。 In addition to real estate prices, the Chinese government is also doing stuff like restricting residents permits, disallowing second or third homes, even restricting jobs to local residents, everything to say “this place is full. We have these other nice choices, with lower housing prices. Go there.” Young people complaining about housing prices in tier-one cities? But that’s the whole point. The debt you have to take on to live in tier-one cities SHOULD SCARE YOU OFF. The Chinese government is trying to stop the influx of people pouring into tier-one cities, and get these smart and energetic youths to go build two, three, four, five. … more Shanghai’s in other parts of China. 1.4 billion people can’t all fit into tier-one cities. 除了以房地产为手段，中国政府也加强控制了居住证的发放，禁止第二/三套房买入甚至对本地居民的工作种类进行限制，这些都是为了表达一个意思：这些地方都人满为患了。二三线城市有更低的房价和更好的生活条件，快点去那里吧！年轻人都在抱怨一线城市的高房价？但这就是中国政府想要的。你在一线城市生存需要的代价会把你吓退。中国政府正在尝试控制一线城市的人口流入而让有技术和充满活力的年轻人去建设二三四五线城市——让更多的上海出现在国家的其他地方。14亿人口是没可能全部都聚集在一线城市的。 5.9k Views · View Upvotes Upvote91Downvote Comments4+ Share
There is too much debt, and a lot of it is likely to turn into bad debt, but that does not equal a banking crisis. 是因为中国贷款太多了，而这些贷款大多数会变成不良贷款，但这些都不等银行危机 Banking crisis may be a nice term to bandy around and get clicks and headlines, but does not really explain what is going on. 银行危机或许是一个十分吸引眼球的头条，但是根本就不能解释实际的情况 There was a lot of debt financing, especially after the 2008 subprime mortgage crisis in the US. In order to keep the economy on a steady keel, the Chinese government, through its banks, pumped money to Chinese state-owned enterprises, in order to keep high employment and maintain an image of “growth”. A lot of this money then found its way into the underground banking system through “wealth management products” and other means. A lot of this has turned into bad debt. 中国政府有过很多次债务融资，特别是08年美国次贷危机之后。为了稳住经济增长，中国政府通过银行将大量人民币注入到国企内以维持就业率和高增长的形象。但这些钱最终大都以理财产品和其他形式流进了地下钱庄。这些大部分都变成了不良贷款。 Another problem area, which frequently overlaps with the “wealth management products” is the local government financing vehicle used to fund local property development, which I have discussed here: Paul Denlinger's answer to Why does China have so many ghost towns? 另一个有问题的领域，和“理财产品”有莫大关联的，就是地方政府为当地基础建设所采用的金融工具（我在这个地方有详细的分析：https://www.quora.com/Why-does-China-have-so-many-ghost-towns/answePaul-Denlinger?srid=tR&share=22b99cfc） What is likely to happen in China is that growth will slow down in some areas, while there will be certain newer parts of the economy which will continue to grow. If the Chinese government is able to support the newer parts of the economy and help them to grow, while cutting back on loans to the weaker parts of the economy, it may be able to handle this transition better. 最可能发生的情况就是中国的经济增长将会放缓，但是肯定会用新的增站点。如果中国政府能支持新的增长点而且能减低夕阳工业的不良贷款率，那么或许能更好地度过过渡期。 This is exactly what the Chinese government is trying to do and you can read about it here:Here is how China is going to quietly save its economy 这些正是中国政府正在尝试去做的，你可以读读这个文章了解一下：http://www.scmp.com/news/china/economy/article/2022491/china-deploys-policy-banks-stealth-mission-stimulate-growth So, if you are expecting there to be a dramatic run on the banks, and the Chinese people to take to the streets and overthrow the Chinese Communist Party, and become a full-blown democracy like Taiwan, Japan or South Korea, you are very likely to be disappointed. 所以，如果你是期待一次强烈的bank run（自行百度啥是bank run），然后中国人民上街推翻TG，中国大陆变成与台湾，日本韩国一样的政体，那么你要失望了。 4.3k Views · View Upvotes Upvote62Downvote Comments2+ Share
Is China facing a Banking crisis? 中国是在面临一个银行危机吗？ Yes. 对 Is it facing a full blown Banking crisis? 中国正在面临一个全面性的银行危机吗？ No. 错 Combined debt of China is almost 300% of its GDP. But the the categorized in 4 parts as it is shown in the image with the question too. 中国的总债务大概是GDP的300%。但是分在了如图所示的4个领域内。 The corporate debt has the lion's portion of the total debt. The household debt and non corporate debt are nothing to worry about because it is less many other developed countries and has some room to grow. 公司债务在总债务中占了大头。个人债务和非公司债务根本没啥可担心的因为这些比大多数发达国家还要低所以还有增长的空间。 Government Debt is not too big when compared to standards set by many global institutions like IMF, World Bank, etc. 政府债务以多数国际组织，例如世行和IMF，设定得标准来看其实不高。 The only major concern which is of a serious magnitude is the corporate debt. This is also reiterated by many economists. 最主要的关注点就是公司债务了。许多经济学家都重申了这点无数次了。 Now the problem with China is that data that comes out of major Chinese institutions is murky so their are many different types of estimates by many different institutions but the common theme in it is corporate debt and its size. 中国最大的问题就是中国国内组织公布的数据来源不清晰所以不同的国际组织对中国经济的实际情况估算会不一样。但所有组织最关心的都是中国的公司债务与其规模。 Corporate debt consists of debt owned by state owned corporations and private corporations. Private corporations in China are generally crowded out by the state owned corporations because of connections and political agenda. 公司债务又分成了国企和私企的债务。中国私企大多数收到国企排挤，这是有政体造成的。 Many state owned corporations have invested into unproductive projects as a result of excess boost given by government after 2008 to prop up the economy. This has resulted in a huge amount of NPAs. So, in all the major problem is state owned corporations piling up huge amount of debt. To solve this problem, the government tried to convert the debt into shares which the bank owns and can recover money through profit dividends but this was one of the causes for last year's stock market crash. 在08年过度的经济刺激政策下，很多国企在许多无效益项目上投了许多钱。这造成了大量的无效能资产。所以，最大的问题是国企堆积了大量债务。为了解决这个问题，政府正在尝试将国企的债务转化为股份，那么银行就能将债务转化为红利而最终将债务收回了。但这造成了上年的股灾..... Hence, it is a big crisis but not the one government cannot handle with so much trade surplus and forex reserves. But actions are definitely needed to stop it from growing into a bigger problem. 所以，这是一个危机但仍然是政府能控制的，毕竟中国政府有大量贸易顺差和外汇储备。但是仍然需要实际行动来防止事态的扩展。 906 Views · View Upvotes Upvote18Downvote Comments1+ Share
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