China Dumping More Than Just Treasuries

China Dumping More Than Just Treasuries

The People’s Bank of China, owner of the world’s biggest foreign exchange reserves has dumped about $250 billion of US government debt and been using the funds to support the yuan and stem capital outflows. In addition to declining China sales of Treasuries, its holdings of US equities are also now showing steep declines.

“China’s ownership of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion.”

~Bloomberg

China’s ownership of American stocks sank about $126 billion, or 38 percent, from the end of July through March, to $201 billion, Treasury Department data show. That has outpaced selling by investors globally in that span — total foreign ownership fell just 9 percent.

Related Reports: Bloomberg, Reuters

 

About People Bank of China

The People’s Bank of China (PBC) was established on December 1, 1948 based on the consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank. In September 1983, the State Council decided to have the PBC function as a central bank. The Law of the People’s Republic of China on the People’s Bank of China adopted on March 18, 1995 by the 3rd Plenum of the 8th National People’s Congress has since legally confirmed the PBC’s central bank status.

Visit: People Bank of China

 


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IMF Warns China of High Corporate Debt

IMF Warns China of High Corporate Debt

The International Monetary Fund’s No 2. Official has urged China to tackle its rising corporate debt. These comments build on the recent warnings about China’s debt including an estimate of a possible $1.3 trillion loans extended to borrowers that don’t have sufficient income to cover interest payments.

“China’s economy grew in 2015 at its slowest pace in a quarter of a century and has been grappling with rising debt levels and overcapacity.”

~ Bloomberg

China’s economy grew in 2015 at its slowest pace in a quarter of a century and has been grappling with rising debt levels and overcapacity. The People’s Bank of China has warned in its mid-year work report that the government’s push to reduce debt levels and overcapacity could increase bond default risks and make it more difficult for companies to raise funds.

Related Reports: Reuters, Bloomberg, Wall Street Journal

 

About International Monetary Fund

The IMF, also known as the Fund, was conceived at a UN conference in Bretton Woods, New Hampshire, United States, in July 1944. The 44 countries at that conference sought to build a framework for economic cooperation to avoid a repetition of the competitive devaluations that had contributed to the Great Depression of the 1930s.

The IMF’s primary purpose is to ensure the stability of the international monetary system—the system of exchange rates and international payments that enables countries (and their citizens) to transact with each other. The Fund’s mandate was updated in 2012 to include all macroeconomic and financial sector issues that bear on global stability.

Visit: IMF


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China’s Bank Lending Drops Significantly

China’s Bank Lending Drops

Chinese banks sharply reduced lending last month after concerns that the world’s second largest economy was having an unsustainable return to debt fueled growth.

“Banks made 555.6 billion yuan ($85.21 billion) in net new yuan loans in April, much lower than expected and less than half of the 1.37 trillion yuan loans in March.”

~ CNBC 

Banks made 555.6 billion yuan ($85.21 billion) in net new yuan loans in April, much lower than expected and less than half of the 1.37 trillion yuan loans in March. Data earlier this week also showed troubled loans at China’s commercial banks reached 4.6 trillion yuan ($706 billion) at end-March, a jump of 428 billion yuan from December. Bad debts in China have now risen for 18 consecutive quarters, reflecting the prolonged economic slowdown.

Related Reports: CNBC, Wall Street Journal

 

About People’s Bank of China

The People’s Bank of China (PBC) was established on December 1, 1948 based on the consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank. In September 1983, the State Council decided to have the PBC function as a central bank. The Law of the People’s Republic of China on the People’s Bank of China adopted on March 18, 1995 by the 3rd Plenum of the 8th National People’s Congress has since legally confirmed the PBC’s central bank status.

Visit: The People’s Bank of China


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