A fully loaded cargo ship heads out to sea from New York Harbor on Aug. 22, 2016. (Spencer Platt/Getty Images)A fully loaded cargo ship heads out to sea from New York Harbor on Aug. 22, 2016. (Spencer Platt/Getty Images)

The Trump administration promised the electorate that it would fix trade imbalances that cost American jobs. So ahead of President Donald Trump’s meeting with Chinese leader Xi Jinping on April 6 e 7, the administration amped up its rhetoric.

“Thousands of factories have been stolen from our country. … Under my administration, the theft of American prosperity will end,” Trump said on March 31. The administration has toyed with the idea of imposing tariffs or implementing a so-called border adjustment tax, penalizing imports and providing tax breaks for exports. These measures would reduce the trade deficit, the net tally between a nation’s exports and imports, but they would also distort supply chains and probably lead to retaliation from trading partners.

But what if, despite the documented Chinese cheating in trade, it is not trade that is the problem? In that case, there would have to be another reason for the $502 billion U.S. trade deficit in 2016—one that’s hiding in plain sight and that could open up new options for fixing the imbalances.

New research suggests free trade in investment capital leads to imbalances in the trade account. The traditional view is that a trade deficit in goods needs to be financed by exporting assets like Treasury bonds and real estate so that the two accounts balance out. Capital pays for the goods, and the country’s external balance nets out to zero.

Contudo, Richard Koo, chief economist at the Nomura Research Institute, thinks the trade in capital is now more important than trade in goods.

“Some 95 percent of all currency trading now consists of capital transactions, with trade-related transactions accounting for just 5 percent of total activity. The market’s original role as a mechanism for preventing trade imbalances from getting out of hand via currency adjustments has been lost as a result,” he wrote in a February report.

If the only international financial transactions between two countries were to settle trade, the exchange rate between two trading nations would eventually compensate for differences in competitiveness.

Por exemplo, if China has a competitive advantage from lower wages or unfair trade subsidies and it achieves a trade surplus with the United States, NOS. importers would have to sell dollars to obtain Chinese goods. The selling pressure would lead to a lower dollar, thus making Chinese goods more expensive and American products more competitive.

“Free trade by itself would not have produced the consequences we see today. … But adding free capital flows to the mix destroys [a] mechanism,” wrote Koo.

NOS. capital markets are even more open to foreigners than U.S. goods markets. Foreigners can buy any asset in any quantity, except for when national security is at stake.

Como um resultado, foreigners own roughly $30 trillion of U.S. ativos, like stocks, Treasury bonds, and real estate, as of the third quarter of 2016. Their demand for U.S. assets keeps the dollar high, making American goods less competitive, which is one reason for the trade deficit.

Foreign Imbalances

So why do foreigners buy so many U.S. ativos? Peking University professor Michael Pettis says it’s because of high domestic savings rates in surplus countries, which cannot be satisfied by domestic investment alone.

“Countries with persistent trade surpluses have savings rates that exceed domestic investment, mainly because ordinary households in that country, which are responsible for most of a country’s consumption, retain too small a share of their country’s GDP relative to government, businesses, or the wealthy,” Pettis wrote in a report. This is as true for China as it is for Germany and Japan.

Em outras palavras, because of failed foreign economic policies, the households in the trade surplus countries don’t make enough to contribute enough to domestic spending. The government and businesses save and invest their share of domestic income. Contudo, because of these imbalances, there aren’t enough viable investment opportunities, and the money goes looking for returns abroad.

“The countries that are most likely to absorb imbalances elsewhere … are not those with the most open markets for traded goods, but rather those with the most open capital markets,” wrote Pettis. Like the United States.

Once the United States has a surplus in its capital account, because of the influx of excess savings from abroad, it needs to spend the money through the trade account for the international accounts to balance, leading to a trade deficit in goods and services.

The demand for capital bids up the dollar, but this makes investing in the United States even more attractive because of the potential capital gain in the foreign exchange market. This worsens the trade deficit problem because it makes U.S. goods less competitive in global markets.

Although the Trump administration hasn’t talked about open capital markets as the reason for the trade deficit, it understands that the exchange rate is a key variable. Trump has called China the “grand champions” of currency manipulation.

If China and the other surplus countries cannot correct their structural domestic imbalances and stop exporting their savings to the United States, then a lower U.S. dollar would be a solution to help close the competitiveness gap, according to Koo. It would have fewer side effects than slapping tariffs on foreign goods or using a border adjustment tax.

“If Mr. Trump really wants to save U.S. manufacturing and U.S. manufacturing jobs, he will need to either roll back the liberalization of capital flows or intervene directly in the forex market. Those are his only two options in addition to outright protectionism.”

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Trabalhadores em um canteiro de obras de um arranha-céu residencial em Xangai, em novembro. 29, 2016. (JOHANNES EISELE / AFP / Getty Images)Trabalhadores em um canteiro de obras de um arranha-céu residencial em Xangai, em novembro. 29, 2016. (JOHANNES EISELE / AFP / Getty Images)

Dada a falta de confiabilidade notório de dados econômicos oficial chinesa, analistas de risco começando errado quando depender exclusivamente de figuras do governo põe para fora. É a história de crescimento da China, e um reequilíbrio da manufatura para consumo, realmente acontecendo? Ou é a questão da enorme dívida, com semi-falidas empresas estatais e excesso de capacidade generalizado, ainda a principal preocupação?

Para lançar luz sobre estas questões obscuras, Leland Miller e sua equipe na China Livro Bege (CBB) entrevistar milhares de empresas e centenas de banqueiros no chão na China a cada trimestre para obter um indicador preciso de como a economia está fazendo.

CBB recolhe dados quantitativos e conduz entrevistas em profundidade com executivos locais. É muitas vezes vem-se com os dados que são completamente oposta à narrativa, mas oficial nem sempre, como a sua pesquisa para o primeiro trimestre de 2017 mostra.

“Os novos resultados da China Livro Bege do primeiro trimestre mostram uma economia certamente mais forte do que há um ano e realizar comparativamente ao último trimestre. Mas os problemas fundamentais permanecem, e alguns deles estão piorando,”A CBB precoce Olhe estados Breves.

Primeiro, as boas notícias. A fim de manter a estabilidade social, o Partido Comunista Chinês precisa manter elevados níveis de emprego a qualquer custo. E o fez no primeiro trimestre.

"Nacionalmente, empregos e crescimento dos salários mantiveram-se inalterados desde o último trimestre, mas o partido não pode estar descansando fácil sobre a estabilidade desejada,”breves estados.

O que está mantendo os planejadores centrais à noite é o fato de que só Estado empresas públicas (SOE) estão contratando, na directiva do governo, enquanto as empresas privadas reduziram contratação, de acordo com CBB.

“O crescimento do emprego desacelerou em empresas privadas, deixando empresas estatais para conduzir o emprego. Além disso, expansão da força de trabalho foi concentrado em setores da economia velhos “.

Sem Reequilíbrio

Este é um outro problema, dadas funcionários como chineses até sensacionalistas o termo “reequilíbrio” na última década. O termo abrange uma gama de políticas destinadas a mudar o foco econômico da indústria pesada e as exportações para o consumo e serviços.

“É sobre o poder de corte, é uma revolução auto-imposto," disse o premiê Li Keqiang em seu primeiro discurso depois de ter sido nomeado em 2013. “Vai ser muito doloroso e até mesmo sentir como cortar um do pulso.”

A imagem mostra a sede do Banco Popular da China (PBC ou PBOC), o banco central chinês, em Pequim, em agosto 7, 2011. Padrão & rebaixamento da dívida dos EUA de pobres era uma chamada wake-up para o mundo, um comentário em um jornal estatal chinês top disse, em agosto 7, acrescentando que os exportadores asiáticos enfrentam riscos especiais. A China é o maior detentor de títulos do Tesouro dos EUA. AFP PHOTO / MARK RALSTON (Crédito da foto deve ler MARK RALSTON / AFP / Getty Images)

A sede do Banco Popular da China, o banco central chinês, em Pequim nesta foto de arquivo. (Mark Ralston / AFP / Getty Images)

Ao longo do último par de anos de cobertura CBB, este reequilíbrio não se concretizou no chão, embora as autoridades continuar falando sobre isso.

O último trimestre não foi excepção. Uma procuração importante para a ascensão do consumidor chinês, por exemplo, é as vendas a retalho.

Dentro 2017, até crescimento oficial de vendas no varejo caiu abaixo 10 por cento pela primeira vez em anos. Embora este é um número que desenvolveu mercados só poderia sonhar, foi tendendo para baixo, não se, como deveria, sob um cenário de reequilíbrio.

E os dados CBB sugere o setor de varejo podem na verdade ser ainda mais fraco. Como a breve diz: “Nossos mais extensas resultados mostram muito mais do que as vendas de flexibilização. lucros, investimento, dinheiro fl uxo, e contratação enfraquecido, em comparação com [no último trimestre de 2016]. Preço e crescimento dos salários também foram mais lento. Varejistas emprestado menos, apesar das taxas muito mais baixas, indicando falta de confiança “.

Outro indicador é a indústria de serviços. China quer afastar-se tornando Widgets e derretendo aço para proporcionar alto nível de serviços domésticos, como finanças e soluções baseadas em software. Esta abordagem seria melhor para o ambiente chinês industrialmente envenenado demasiado.

Tais esperanças permanecem “prematuro,”Afirma CBB. Manufacturing fez melhor do que os serviços em todos os aspectos, das vendas para lucros, bem como o investimento e empréstimos.

sem cortes

Outro elemento importante de reequilíbrio é o corte de excesso de capacidade industrial, especialmente em carvão e do aço. Estes seriam todos reformas baseadas no mercado, onde as empresas semi-falidas parar de produzir, desperdiçando recursos, e baixar os preços.

Oficialmente, China disse que conheceu a sua 2015 alvo de corte 45 milhões de toneladas de ferro e capacidade de aço, bem como 250 milhões de toneladas de capacidade de carvão.

Não é assim de acordo com o relatório CBB. “Dados China Livro Bege mostrar capacidade líquida aumentou em todos os sub-sector para cada um dos últimos quatro trimestres.” Isto significa que a China foi encerrado algumas plantas, mas que os mais novos foram construídos ao mesmo tempo.

Segundo a empresa de pesquisas Capital Economics, a contabilização não adiciona-se. “Se as empresas estão realmente reduzindo a sua capacidade de produção, em seguida, deve-se esperar que uma parte da sua força de trabalho não é mais necessário e serão demitidos,”Escrevem eles em um relatório recente. Contudo, emprego total no que se rotula “setores excesso de capacidade” única caiu 5 por cento, significativamente menor do que apoiaria os números oficiais.

Os dados CBB no chão também contradiz a narrativa oficial aperto monetário. O Banco Popular da China (PBOC) tem suscitado diferentes taxas de juros que cobra dos bancos ligeiramente este ano, levando a um aumento nas taxas de empréstimos interbancários. observadores da China concluíram posteriormente liquidez foi mais apertado em todos os lugares.

De acordo com a CBB, Contudo, o aperto tem apenas alimentado através ao sector da propriedade, que acredita pode ter atingido o pico. Para todos os outros, condições de financiamento permanecem nivelada: “Ele ainda não aconteceu, não na rua. O preço do capital caiu através da placa neste trimestre, em bancos, em finanças sombra, e no mercado de títulos “.

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Protestors shout slogans during a rally against a pro-Beijing official who was appointed as chairman of Hong Kong University’s (HKU) governing council, in Hong Kong on Jan. 3, 2016. Fears are growing over political interference in the city’s education system. (Anthony Wallace/AFP/Getty Images)Protestors shout slogans during a rally against a pro-Beijing official who was appointed as chairman of Hong Kong University’s (HKU) governing council, in Hong Kong on Jan. 3, 2016. Fears are growing over political interference in the city’s education system. (Anthony Wallace/AFP/Getty Images)

Research shows that the political ideology of communism restricts innovation, today’s panacea for economic growth and long-term prosperity.

In broad strokes, the communist tenets of state ownership of business and property with strict government supervision lead to a risk-averse culture working in an environment that discourages ambition and creativity. This could not be further from the building blocks that innovation needs to thrive.

o 2017 International Intellectual Property Index, recently published by the Global Intellectual Property Center (GIPC) of the U.S. Chamber of Commerce, ranks the two bastions of communism, Russia and China, Não. 23 and No. 27 respectively—behind the smaller economies of Malaysia, México, and Turkey, por exemplo.

The report associates stronger intellectual property (IP) protection regimes with more innovative economies and conversely, weak IP protection as hindering long-term strategic innovation and development.

“A robust national IP environment correlates strongly with a wide range of macroeconomic indicators that fall under the umbrella of innovation and creativity,” according to the GIPC report.

The leading countries in IP strength are free market, capitalist economies such as the United States and United Kingdom. First-world democratic countries of Europe and Asia also rank highly.

The key to whether China can become a country of innovation is tied to the respect of property rights and the rule of law.

— Ma Guangyuan, Independent Chinese economist

The report states that Russia’s protectionist moves—local production, procurement, and manufacturing—work to restrict IP rights. Russia also suffers from persistently high levels of software piracy.

For China, the report singles out historically high levels of IP infringement.

China and Russia are the “usual suspects” of cyberespionage. Theft of IP, the infrastructure for innovation, is one way these communist nations try to stay competitive globally.

Melbourne, Australia-based agency 2thinknow has been ranking the world’s most innovative cities for the past 10 anos. In its latest rankings published Feb. 23, the most innovative city in a communist country, Pequim, ranks No. 30, and Moscow ranks No. 43.

Blunting Universities’ Effectiveness

According to the Organisation for Economic Co-operation and Development (OECD), not a single Chinese university ranks among the world’s top 30 in terms of most-cited scientific publications.

Universities are breeding grounds for young, innovative minds. Within their walls, ideas are born and debated, companies are formed, and research is conducted. They are key components of a healthy innovation ecosystem.

Harvard Business School professor William Kirby wrote about the strict limitations within Chinese universities on what faculty could discuss with students.

“Faculty could not talk about any past failures of the communist party. … They could not talk about the advantages of separation between the judicial and executive arms of the government,” Kirby stated in an article in the Harvard Business Review (HBR) dentro 2015.

“It is hard to overstate the impact of these strictures on campus discourse and the learning environment,” Kirby wrote.

Communism is known for its corruption and cronyism. UMA Science editorial noted that the bulk of the Chinese government’s R&D budget is allocated due to political connection rather than merit based on the judgment of independent review panels.

Communist Interference

McKinsey’s 2014 report “The China Effect on Global Innovation” noted that the impact of innovation on China’s economic growth declined to the lowest level since about 1980.

China has a massive consumer market and a government willing to invest huge sums of money—nearly US$200 billion on R&D in 2014—and its universities graduate more than 1.2 million engineers each year.

Communism as a political ideology is as bankrupt as ever.

— Garry Kasparov, former world chess champion

Clearly, China has so much potential, but it is the United States that has taken the lead in technological dominance.

“The country [China] has yet to make an internal-combustion engine that could be exported and lags behind developed countries in sciences ranging from biotechnology to materials,” according to McKinsey.

“While almost all western technology giants have R&D labs in China, the bulk of what they do is local adaptation rather than developing next generation technologies and products,” wrote Anil Gupta and Haiyan Wang in a 2016 article in the HBR. Gupta and Wang are co-authors of the book “Getting China and India Right.”

Excessive government involvement often leads to waste and excess—overbuilding and overcapacity. China’s real estate bubble and steel mills are two such examples.

Lately, the Chinese government has been trying to spur an onslaught of startups by providing them with generous subsidies. But it doesn’t have the savvy to pick winners and losers. Ao invés, a more efficient use of capital comes from knowledgeable and discerning venture capitalists. Most startups are meant to fail after all.

"Why China Can’t Innovate,” a 2014 article in the HBR co-authored by Kirby, noted that the Chinese Communist Party requires one of its representatives to be associated with every company of more than 50 employees. Larger firms must have a Party cell, whose leader reports directly to the Party at the municipal or provincial level.

“These requirements compromise the proprietary nature of a firm’s strategic direction, operations, and competitive advantage, thus constraining normal competitive behavior, not to mention the incentives that drive founders to grow their own businesses,” according to the article.

The system of “parallel governance” constrains the flow of ideas. China’s innovation largely comes through “creative adaptation,” which can mean a lot of things including foreign acquisitions, partnerships, but also cybertheft.

Capital Flight

Communism is against private ownership of property. This puts a damper on innovation.

“The key to whether China can become a country of innovation is tied to the respect of property rights and the rule of law,” wrote Ma Guangyuan, an independent economist in China.

In his blog, Ma cites renowned U.S. investor William Bernstein’s writings, which discuss property rights as being the most important of four factors needed for rapid economic growth. Guangyang wrote, “Entrepreneurs live in constant fear of punishment,” due to the questionable business practices in China, an environment that leads them to lose trust in a viable long-term economic future.

Capital flight out of China is one symptom of the problem; another is the preference of wealthy Chinese to send their children overseas for higher education. The loss of entrepreneurs like Li Ka-shing and Cao Dewang is a sign that greener pastures lie abroad.

Former world chess champion Garry Kasparov, a Russian, wrote: “Communism as a political ideology is as bankrupt as ever.”

In his blog, he went on to say: “It is no coincidence that the values of the American century are also the values of innovation and exploration. Individual freedom, risk-taking, investimento, opportunity, ambition, and sacrifice. Religious and secular dictatorships cannot compete with these values and so they attack the systems founded upon them.”

The authors of the HBR article “Why China Can’t Innovate” recognize the nearly limitless capability of the Chinese individual, Contudo, the political environment in China acts like a choke collar on innovation.

“The problem, we think, is not the innovative or intellectual capacity of the Chinese people, which is boundless, but the political world in which their schools, universities, and businesses need to operate, which is very much bounded,” they wrote.

Siga Rahul no Twitter @RV_ETBiz

Communism is estimated to have killed at least 100 milhões de pessoas, yet its crimes have not been compiled and its ideology still persists. Epoch Times seeks to expose the history and beliefs of this movement, which has been a source of tyranny and destruction since it emerged.

See the entire series of articles here.

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Gordon Chang was a bit early when he wrote the book “The Coming Collapse of China” in 2001.

He predicted the collapse of the Chinese economy and the downfall of the communist party within ten years and his prediction is four years overdue.

Contudo, the core arguments he made in the book are more valid than ever as Chang continues to provide us with an uncensored behind-the-scenes view of the Chinese political economy.

Epoch Times spoke to Chang about a superficially stable China in 2017 and what is causing the real friction under the surface.

epoch Times: China managed to stabilize its economy in 2016, will the regime be able to continue in 2017?

Gordon Chang: China looks strong but it’s actually weak. It has passed the point of no return.

They put in an enormous amount of debt, and they did stabilize the economy. The manufacturing sector is a beneficiary; we are starting to see some inflation. But the cost of this is enormous. It’s the old tactics of using debt to generate growth. It shows desperation more than anything.

There are some things that China should do regarding reform in 2017, but they won’t get it done because of the political imperative. This year we have a half a decade event, the party congress in the fall of this year, where they will either announce a new leader or Xi Jinping remains in control. That is a critical one.

I think they will be successful holding the line through the party congress. After that, they are going to fail.

So they are going to try and hold the line. Xi Jinping has relentlessly taken the economics portfolio from Li Keqiang. He gets the credit, but he also gets the blame. He is not going to want to see a major disruptive event between now and the party congress. It should be obvious, but a lot of people take this into account.

I think they will be successful holding the line through the party congress. After that, they are going to fail. They are going to prevent adjustments for as long as they have the ability to do so. Their ability to create jobs, holding the GDP growth close to 7, all of this stuff they are going to try and do.

Even if it was growing at the official rate, China is creating debt 5x faster than incremental GDP. Beijing can grow the economy with ghost cities and high-speed railways to nowhere but that’s not free, it’s not sustainable.

After the party congress, China is going to go into free fall.

The only thing that can change the Chinese economy is fundamental economic reform. But they are moving in a regressive manner, Beijing is stimulating again. It’s taking China away from a consumption economy, toward the state, away from private companies.

China is not going to have another 2008, it’s going to be a Chinese 1929.

The Chinese dream wants a strong state, and it’s not compatible with market reform. Even if Xi were up for liberalize and change, it would be too little too late. Stimulus is going to increase the underlying imbalances. That’s going to make it more difficult to adjust.

epoch Times: What is happening beneath the superficial stability?

Sr. Chang: Look at what happened last year, capital outflows were probably higher than 2015. E 2015 was unprecedented, somewhere between $900 billion and a $1 trillion dollars.

The Chinese people see what other people have seen and it doesn’t make sense anymore. They see the economy is not growing. People are concerned about the political direction of the country, and people see the end is not that far away, so they move their money out.

People are also leaving. Young Chinese used to come to America to get an education; then they went back. Now Chinese kids get an education, they try to work for an investment bank, and they try to stay. Things are not as good at home as Beijing maintains.

To stop the capital outflows and maintain stability, they put in draconian capital controls starting in October, novembro 2016.

They put some real limitations on outbound investment for corporates and multinationals. They can do this, but how much longer? They are disincentivizing people to put money into China because they don’t know they can take it out again. In spite of the controls, they had record outflows. Capital outflows in the second half, when the controls started, were higher than in the first half.

They are going to continue to smooth things out after the Congress, but they won’t have the ability to continue the game. The whole thing is about confidence, and there is a failure of confidence in China.

epoch Times: They are also using their foreign exchange reserves to manage the decline of the currency. The International Monetary Fund (FMI) for example says the $3 trillion they have is enough to run the economy.

Gordon Chang: They can just give you any number, and you don’t know whether it’s the right one, just like GDP. You cannot go to the State Administration of Foreign Exchange (SAFE) and look through their books. They can report anything, and you don’t’ know. They have a high incentive to fake that number.

We also know they have a synthetic short position because they are selling derivatives through the state banks. If you look at the estimates of foreign exchange reserves each month, they always outperform the surveys. China always outperforms, it doesn’t take a genius to figure out that the FX number can’t be right. Misreporting their FX reserve declines minimizes the problems, so people keep believing in the currency.

They can report anything, and you don’t’ know. They have a high incentive to fake that number.

So I think they don’t have the $3 trilhão. They have done the trick Brazil pulled in 2014 of selling derivatives instead of actual dollars. According to my sources, there’s $500 billion dollars still to be accounted for.

Then there are illiquid investments in the Chinese foreign exchange reserves, por aí $1 trilhão. According to my estimates, you are then down to $1.5 trillion in usable money to defend the currency. The FX reserves aren’t as big and as liquid as Beijing wants them to be.

epoch Times: So they will have to devalue sooner or later.

Gordon Chang: I don’t think they are going to devalue before the 19th party congress later this year.

Then they are going to devalue, but not as far north of eight [current rate is 6.9 per dollar] as it needs to be. The insufficient devaluation will shake confidence; people think it’s not enough, it has to be more. Eventually, someone is going to figure out that their reserve numbers are wrong. But the one thing they need to defend their currency is foreign currency.

Xi Jinping says the Chinese dream is a strong China. So he is responsible for everything and depreciation never benefits the Chinese consumers. They continue to make stupid decisions. It’s the political system; the political imperative is too strong. It would be too embarrassing to do wholesale reform. He wants to appear strong. They have always tried to prevent natural economic adjustments—by doing that they have made the underlying imbalances bigger.

So in the end, China is not going to have another 2008, it’s going to be a Chinese 1929.

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A vendor picks up a 100 yuan note above a newspaper featuring a photo of US president-elect Donald Trump, at a news stand in Beijing on Nov. 10, 2016. Trump has talked tough on trade — and his policies might actually help China. (Greg Baker / AFP / Getty Images)A vendor picks up a 100 yuan note above a newspaper featuring a photo of US president-elect Donald Trump, at a news stand in Beijing on Nov. 10, 2016. Trump has talked tough on trade — and his policies might actually help China. (Greg Baker / AFP / Getty Images)

Donald Trump talks tough on China and has appointed trade hawks Wilbur Ross and Peter Navarro to key positions in his administration. He has threatened to slap a blanket tariff on Chinese goods and talked directly to Taiwan’s President, previously regarded as a major diplomatic offense.

According to “Road to Ruin” author James Rickards, this is Trump’s way of opening the negotiations with China to reach a mutually beneficial trade relationship.

"[Ele] is saying to China: ‘Here is where we are going to start, what have you got for us? Are you willing to be more flexible on foreign direct investment, are you willing to treat U.S. companies in China more fairly, are you willing to stop the theft of intellectual property?’ If China makes concessions on these points he can say ‘fine, now my tariff is [lower].’ It’s the art of the deal; people don’t understand that about Trump,” Rickards told the BBC.

Contudo, in any deal, the other party also has some negotiating chips on the table and China, por exemplo, can hurt American companies exporting to China or American companies operating in China.

So who has the upper hand in the negotiations? According to a report by research firm Geopolitical Futures (GPF), the United States would suffer some damages in a trade war but would come out on top in the end.

“China would feel the impact of U.S. protectionist measures more than the U.S. would feel any economic retaliation China has at its disposal,” the report states.

What’s at Stake?

The most important point for both countries is the symbiotic relationship between China the exporter and the United States the importer. Between Chinese workers who produce cheap goods and U.S. consumers who buy them.

According to the NOS. Census, the United States imported $483 billion worth of goods from China in 2015. Since China joined the WTO in 2001, the United States was the top importer of Chinese goods in all but one year.

In an extreme thought experiment, sobre 15 million Chinese workers in the export sector could lose their jobs if Americans stopped importing from China altogether, a nightmare for the Chinese regime, which depends on employment to keep the people happy and itself in power.

Por outro lado, the United States depends on China for cheap imports. Mais que 90 percent of all imported umbrellas and walking sticks come from China for example, e 22 percent of all the stuff the United States imports.

Sourcing these products from somewhere else or producing them onshore will be difficult and almost certainly make them more expensive. Contudo, this is a nuisance compared to 15 million unemployed Chinese.

“U.S. dependence on Chinese goods is a matter of convenience,” states the GPF report. The analysts say the United States has ample spare capacity in manufacturing to eventually make up for the shortfall.

According to the Federal Reserve (Fed), total industrial capacity utilization in the United States was only 75.1 percent in October of 2016.

“Of course, increasing capacity would not be easy. One caveat is that many of these industry groups have seen their capabilities atrophy after years of dismal performances. But these industries are much like muscles, atrophying in bad times but strengthening in good times,”Afirma o relatório.

One example is the furniture industry, where Americans bought 17 percent of all sales from Chinese exporters in 2015. NOS. capacity utilization for furniture was only 75 percent during most of the year. If the United States ramped up production to 100 percent in an unlikely scenario, it could make up for all of the Chinese imports, albeit at a higher price. The same principle is true for many other industries from textiles to synthetic rubber and has the benefit that it would decrease American unemployment.

Monopoly Power

In the discussion about trade with China, we frequently hear that China has a monopoly for Rare Earth Elements (REE), a critical component for many digital products. If push came to shove, China could simply cut exports to the United States like it did to Japan in 2010.

According to GPF, Contudo, this is another classic example of price rather than actual availability. Dentro 2016, China produced 89 percent of global REEs. Contudo, the United States had its own company producing REEs up until 2015, when Molycorp Inc. had to declare bankruptcy because it could not compete with the low Chinese prices.

GPF estimates that potential production by Molycorp would be enough to satisfy U.S. REE demand, again at a higher price than the current ones from China and with a time lag.

“The result would not be a catastrophe and actually would spawn a capacity for REE production in the United States or another country, such as Australia, from which the United States could import,”Afirma o relatório.

Retaliation

What happens if China retaliates and slaps tariffs on American products exported to China?

According to GPF, the last time that happened it didn’t end well for China. When President Obama imposed a 35 percent tariff on Chinese automobile and light truck tires in 2009, China retaliated by slapping a tariff on U.S. chicken meat.

Os EUA. tire tariff’s impact was limited: Imports from China fell by 50 percent until 2015 only to be replaced by South Korean and other manufacturers. This shows the limit on how many jobs can come back to the United States but also demonstrates that the United States is not dependent on China for goods supply.

The same goes for multinational corporations which may have to shift production to other Asian countries should China chose to make life difficult for them.

The tariffs left their mark on the tire industry in China, Contudo. “China’s capacity utilization in the various tire segments industry has fallen to between 50 e 60 por cento. Hundreds of tire factories have closed their doors, and Chinese tire makers are cutting prices to the bone just to stay competitive in the market,”Afirma o relatório.

And the U.S. chickens? Exports doubled from 2011 para 2016 and total poultry production in the United States increased during the whole period.

“It is likely that future retaliatory measures would yield similar results: a short-term impact for the U.S. followed by a recovery,”Afirma o relatório.

Trade Off

Although Apple could shift production somewhere else, it would take time and cost money. Starbucks, which makes 5.7 percent of its global sales in China couldn’t just replace a market of more than a billion consumers. The same is true for Boeing, which earned 13.1 percent of its 2015 revenue by exporting to China, the fastest growing airplane market.

Contudo, there are many Chinese multinationals operating in the United States (por exemplo, FOSUN) or banking on the United States to become their next big market (Alibaba).

According to the GPF report, both countries would lose in a full-blown trade war, but it is the United States that holds the upper hand. Donald Trump understands this, which is why he is pushing China to get a better deal for America. If China also understands it’s in a weaker position, it will be able to avoid a lose-lose scenario.

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A Chinese investor watches the U.S. presidential election on his smartphone at a securities company in Beijing on Nov. 9. (Wang Zhao / AFP / Getty Images)A Chinese investor watches the U.S. presidential election on his smartphone at a securities company in Beijing on Nov. 9. (Wang Zhao / AFP / Getty Images)

Immediately after Donald Trump became president-elect, the Chinese yuan fell through key support at 6.80 yuan per dollar, the lowest level since 2010.

The market reaction is hardly surprising, as Trump and his advisers have for a long time accused China of being an unfair trader and currency manipulator. They also vowed they would slap tariffs on Chinese goods if China doesn’t play fair in trade.

Trump adviser Peter Navarro says China has an unfair advantage because it follows lower health and safety standards and uses slave labor to keep labor costs competitive.

“If we learned anything from the World Trade Organization and NAFTA, it is that you have to put in stringent rules for worker health and safety protection," ele disse, also mentioning China’s export subsidies and currency manipulation.

According to Navarro, if China doesn’t stop these practices, the United States will impose countervailing tariffs on Chinese products. Tariffs would result in fewer exports to the United States and therefore less demand for the Chinese currency.

“When Donald Trump talks about tariffs, they aren’t the endgame. The goal is to use tariffs as a negotiating tool to stop cheating. But if the cheating does not stop, we will impose defensive tariffs," ele disse.

What Can Trump Do?

Victor Sperandeo, president and CEO of Alpha Financial Technologies LLC, thinks the United States could cap trade at a certain level, which “will harm China more than the United States. If we buy $500 bilhão, they have to buy $500 bilhão,” he said in an email. The United States absorbs 20 percent of China’s exports, worth $483 bilhões em 2015.

Other commentators think a Trump administration won’t be able to implement very harsh protectionist policies at all, because the traditionally pro-trade Republican Congress would have to consent as well.

“Big tariff increases on Chinese imports are quite unlikely. The focus will instead be on the theft of American intellectual property—something most people in either party would probably agree is a serious problem,” said Mark DeWeaver, author of “Animal Spirits With Chinese Characteristics.”

Chinese trade has been slowing but the trade surplus with the United States is still high (Economia Capital)

Chinese trade has been slowing, but the trade surplus with the United States is still high. (Economia Capital)

Jim Nolt, professor of international relations at New York University, said that even if a Trump administration can pass draconian sanctions, China could selectively retaliate.

“China may act strategically by targeting sanctions against U.S. exporters located in the states or congressional districts of powerful Republicans in Congress," ele disse.

China could also hassle the American companies operating in the country, as it has done in the past, with anti-monopoly and other investigations.

Given these complicated details, a Trump administration will have to make some very good deals with China for its managed trade policy to work.

Involuntary Depreciation

While export subsidies, sweatshops, and a lack of environmental standards are common in China, especially in industries like steel and solar, the issue of currency manipulation is not as clear-cut anymore as it was 10 anos atrás.

Up until 2005, China pegged its currency to the dollar at a rate of 8.27 yuan, despite enormous exports and capital inflows that would have warranted a much higher exchange rate. China kept the rate stable by buying Treasury securities to the tune of $4 trilhão, thereby creating an artificial demand for dollars.

After pressure from the United States, China let the yuan rise to a high point of 6.05 yuan per dollar in early 2014. Desde então, Contudo, the rate has not really been in China’s hands anymore.

Systemic economic problems and the creation of $35 trillion in bank credit, as well as regime leader Xi Jinping’s anti-corruption campaign, have led to massive capital outflows, estimated to be between $1.2 trillion and $1.5 trillion since the beginning of 2014. These capital outflows were higher than the trade surplus and placed downward pressure on the Chinese currency.

Capital outflows have accelerated again in the fall. (IIF)

Capital outflows have accelerated again in the fall. (IIF)

But rather than embracing this opportunity to let the currency slide and create an advantage for exporters, China sold off $1 trillion of its foreign currency reserves to keep the yuan relatively stable—and therefore give a fake impression of stability. So if anything, China has been manipulating the currency up, not down, for at least the last couple of years.

This type of manipulation continued after the U.S. elections, as Treasury bonds were sold en masse. Prices fell, and yields rose in a highly correlated fashion with the rise of the dollar against the yuan.

Maybe the Chinese want to wait and see what Trump proposes before letting the currency loose completely. Or would they like to show their power, to tell the president-elect they can move Treasury markets at a whim?

“Don’t look for China to ‘dump’ Treasury bonds. That is a widely mistaken notion. The dollar is the only currency big enough to hold Chinese reserves,” said Christopher Whalen, head of research at the Kroll Bond Rating Agency in New York.

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A man checks Chinese yuan bills in Beijing on July 28, 2015. The yuan is declining against the dollar and bitcoin as Chinese move money out of the country. (FRED DUFOUR/AFP/Getty Images)A man checks Chinese yuan bills in Beijing on July 28, 2015. The yuan is declining against the dollar and bitcoin as Chinese move money out of the country. (FRED DUFOUR/AFP/Getty Images)

The Chinese currency, the yuan, is a strange animal. Linked to the dollar, it hardly moves—but when it does, financial markets get jittery, especially when it’s going down.

The yuan lost 1.1 percent against the dollar in October, which doesn’t seem like a lot. It’s what’s behind the one percent move that has markets on edge.

According to investment bank Goldman Sachs, as much as $500 billion in capital has left China this year through September. Chinese companies and citizens, as well as foreigners, convert their yuan holdings into dollars and other foreign currencies, moving the price of the yuan down. Outflows picked up especially in September, reaching $78 bilhão.

gsyuanoutflow

If there is no additional demand for the yuan from trade, por exemplo, the price of the currency has to move down to adjust for the imbalance in the demand for foreign currency. Fundamentally, this is a vote of no confidence in the Chinese economy. If risks and returns of Chinese assets were favorable—as they were for most of the past decade—capital would be flowing into China and not out.

Regime Meddling

Contudo, the Chinese leadership wants to limit the visibility of this vote of no confidence and give the impression of financial stability, so it is applying two levers to obscure the move.

Primeiro, it is selling off its once mighty stash of official foreign currency reserves, down from $3.33 trillion in January to $3.17 trillion at the end of September. In August of 2014, it was close to $4 trilhão.

It is simply a transfer of public Chinese foreign exchange assets to private hands intermediated through global financial markets. If the amount of foreign currency bought by the private sector and sold by the official sector matches, the impact on the price of the currency is limited.

Por exemplo, Chinese official holdings of U.S. Treasury bonds are down from $1.25 trillion at the beginning of the year to $1.19 trillion at the end of August. Contudo, Chinese corporates have either completed or announced $218.8 billion in mergers and acquisitions of foreign companies this year, according to Bloomberg data.

(Bloomberg)

(Bloomberg)

The rest of the record corporate buying spree was financed by Chinese state banks and other foreign exchange reserves held at the People’s Bank of China (PBOC).

Chinese companies have previously invested in steel mills and coal mines like there is no tomorrow. Contudo, because mining and manufacturing have massive overcapacity and debt issues, Chinese companies are looking overseas for better investments.

But it’s not only Chinese corporates that are suddenly discovering the value of foreign assets. Chinese citizens have also been active buyers of foreign real estate and stocks. Purchases of equities traded on the Hong Kong stock exchange by mainland citizens, por exemplo, hit a record high of $12 billion worth of buy orders in September, acima 64 percent from August.

Capital Controls

So the Chinese regime is pulling the second lever to limit outflows: controles de capital. Transfers of capital for citizens are already capped at $50,000 per year, so people found nifty ways around this limit. Like buying millions worth of life insurance products, a form of capital investment, in Hong Kong for example with their Union Pay debit card. But not anymore.

As of October 29, they can only use their UnionPay cards to buy insurance related to travel, according to UnionPay Co. Mainland visitors bought $3.9 billion worth of insurance products in Hong Kong in the first half of the year, according to the city’s insurance industry regulator, an increase of 116 percent over the same period of 2015.

The regime also continues to crack down on underground banks which facilitate capital outflows. According to reports by mainland paper Financial News, the State Administration of Foreign Exchange (SAFE) seized $8.4 billion in foreign exchange funds during an investigation in late October.

So unlike the mostly state-owned companies which are snapping up foreign assets with the blessing of the regime, Chinese citizens have to find other ways to reduce their exposure to the Chinese economy. They are fed up with the low-interest rates on bank deposits and are increasingly afraid of the risks of the unregulated wealth management products.

(HSBC)

(HSBC)

One channel that still seems to work is the flow of yuan from the mainland to offshore centers like Hong Kong and Singapore. Goldman estimates $45 billion out of the $78 billion in September outflows was transferred from the mainland banking market to the offshore yuan market, where it was likely converted into foreign currency.

The offshore yuan (CNH) has lost 4.8 percent against the Hong Kong Dollar since May where its domestic counterpart (CNY) only lost 4 por cento, indicating more selling pressure on the offshore yuan.

Another vehicle, mostly used when all else fails, is the electronic currency Bitcoin. After moving sideways for most of the summer, the price skyrocketed since late September, coinciding with the latest measures to restrict capital outflows and the drop in the yuan. ai, it is a bit more volatile than its official counterpart. It’s up 23 por cento para $705 since Sept. 25, without regime meddling and for everyone to see.

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setembro 27, 2016

As pessoas trabalham em uma plataforma de engenharia de petróleo offshore em Qingdao, China, julho 1, 2016.  De acordo com a pesquisa independente China Livro Bege, a economia se estabilizou, mas esta melhoria tem um preço.
(STR / AFP / Getty Images)As pessoas trabalham em uma plataforma de engenharia de petróleo offshore em Qingdao, China, julho 1, 2016.  De acordo com a pesquisa independente China Livro Bege, a economia se estabilizou, mas esta melhoria tem um preço.
(STR / AFP / Getty Images)

Ninguém acredita que os dados econômico chinês oficial, mas as pessoas ainda tem que usá-lo em sua análise, porque não há muitas boas alternativas.

Os dados oficiais 2016 diz-nos imóveis na China é borbulhante, crédito está crescendo aos trancos e barrancos, atividade manufatureira está saltando para trás, e Estado empresas públicas (SOEs) estão investindo como se não houvesse amanhã, enquanto suas contrapartes privadas estão batendo suas carteiras fechadas.

Enquanto isso, os lucros da maioria das empresas estão sofrendo. Lutando para pagar suas dívidas maciças, alguns deles têm até mesmo dobrado e saído do negócio.

Então, se os dados oficiais não é confiável, O que realmente está acontecendo? Felizmente, nós temos o Livro Bege China (CBB) para nos dizer o que está acontecendo nas conclusões ground and deste trimestre, em grande parte traseira da narrativa oficial.

Sobre os dados do chão faz backup Teoria Stimulus

CBB coleta dados de milhares de empresas chinesas a cada trimestre, incluindo algumas entrevistas em profundidade com executivos e banqueiros locais. Embora a CBB não dá números de crescimento definitivos, ele registra quantas empresas aumentaram as suas receitas ou quantos demitiu trabalhadores, por exemplo.

Mais importante, o relatório CBB para o terceiro trimestre de 2016 faz o backup a alegação do regime chinês recorreram ao estímulo da velha escola de manter o emprego de entrar em colapso, derramando assim a água fria sobre as esperanças de um reequilíbrio a uma economia de consumo e serviços.

“Os motores de crescimento neste trimestre foram exclusivamente‘economy'-fabricação de idade, propriedade, e commodities. Os ‘novos economy'-serviços, transporte, e, especialmente, varejo viu resultados mais fracos,”Os relatórios afirma.

(China Livro Bege)

(China Livro Bege)

Em sincronia com os indicadores de produção oficiais, o Livro Bege China registra aumento de receita em 53 por cento das empresas de manufatura, um cheio 9 pontos percentuais superior ao último trimestre.

O sector imobiliário é vermelho-quente de acordo com dados oficiais com preço de dois dígitos e aumentos de vendas. adequadamente, CBB relatórios 52 por cento das empresas aumentaram as suas receitas, 4 pontos percentuais mais do que no último trimestre.

mais Debt

Ambos fabricação e propriedade recuperou por causa de um aumento da dívida e infra-estrutura de investimento, principalmente para hipotecas residenciais, bem como o investimento por empresas estatais.

“O número de empresas que tomam empréstimos saltou do chão temos visto nos últimos três trimestres para seu nível mais alto em três anos,”estados CBB.

De acordo com dados oficiais, empréstimos bancários cresceu 13 por cento em agosto em comparação com um ano antes e relata a CBB 27 por cento das empresas aumentaram seus empréstimos, um cheio 10 pontos percentuais do que no trimestre anterior.

“Se as vendas e os preços continuam a subir no quarto trimestre, será devido a ainda mais alavancagem,”CBB diz sobre o setor imobiliário. De acordo com o Banco Popular da China (PBOC) dados, empréstimos às famílias composta 71 por cento dos novos empréstimos bancários, em agosto.

(Economia Capital)

(Economia Capital)

O relatório também confirma que as estatais investiram mais com 60 por cento deles aumentando suas despesas de capital, acima 16 pontos percentuais em relação ao segundo trimestre.

“Impaciente para um crescimento mais forte, políticos chineses eram susceptíveis de engavetar seu
objetivo reequilíbrio, e ‘double-down’ no crescimento baseado no investimento,”Fathom Consulting afirmou em um relatório recente sobre China. Os números no chão confirmar essa avaliação.

reciprocamente, menores empresas privadas não investir muito em tudo. As empresas mais pequenas aumentaram o investimento em 34 por cento dos casos, comparado com 44 por cento no trimestre anterior.

“Enquanto nós ainda vemos empréstimos bancários ... como o piloto mais importante para a infra-estrutura no curto a médio prazo, esperamos que o seu crescimento sustentável a depender do envolvimento mais capital privado,”O banco de investimento Goldman Sachs escreve em um relatório.

Preço a pagar

Esta estratégia planejada centralmente tem um preço, Contudo. "CBB dados mostram lucros e fluxo de caixa deteriorado, lançando uma cortina de fumaça sobre os aumentos registrados em empréstimos e investimentos,”O relatório afirma com apenas 45 por cento das empresas que relatam um aumento nos lucros, comparado com 47 por cento no último trimestre. CBB também aponta que o fluxo de caixa deteriorou em toda a linha, explicando a subir em padrões da empresa este ano.

A principal razão para este estímulo renovado, de acordo com a CBB, é o medo do regime chinês do desemprego, que começou a mostrar-se em dados CBB no segundo trimestre. A taxa de desemprego oficial é vergonhosamente pouco fiáveis ​​porque tem sido ficar em 4 por cento para os últimos dez anos.

Então, depois de ofensiva deste trimestre do investimento, 38 por cento das empresas disseram que contratou mais pessoas no terceiro trimestre. “Contratação foi novamente forte e é justo dizer que esta é a questão mais importante para o governo central,”estados CBB.

Mas comprar um pouco de crescimento e de emprego com um pouco de crédito é um velho truque? E sobre o reequilíbrio muito elogiado e reforma?

“Uma economia mais orientada para o serviço dará origem a uma maior participação da renda do trabalho no PIB, mas uma política fiscal mais redistributiva é necessário para derrubar a desigualdade de renda, e fornecer mais igualdade de oportunidades para ambos os domicílios urbanos e rurais,”O Fundo Monetário Internacional (FMI) escreveu em um relatório recente.

ai, os dados CBB no chão não confirma isso está acontecendo em tudo. Se alguma coisa, o terceiro trimestre foi um passo para trás.

"Serviços, transporte, e os lucros de serra especialmente no varejo duramente atingida no trimestre,”estados CBB. Somente 53 por cento das empresas de serviços relataram um aumento nos lucros, comparado com 57 por cento no último trimestre.

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Os líderes mundiais reunidos em Brisbane, Austrália, para a cimeira anual do G20. (Andrew Taylor / G20 Austrália via Getty Images)Os líderes mundiais reunidos em Brisbane, Austrália, para a cimeira anual do G20. (Andrew Taylor / G20 Austrália via Getty Images)

Análise Notícias

Crescimento inclusivo, energia verde, mais comércio, e um afastamento da gestão da crise financeira a longo prazo de planejamento de esses são os objetivos oficiais da 2016 reunião do G-20 em Hangzhou, China.

E não seria ótimo se os líderes das maiores economias do mundo só poderia virar uma chave quando se encontram setembro. 4-5, esquecer os enormes problemas econômicos, e se concentrar em um futuro próspero?

“A liderança da China conduziu o debate para facilitar o G-20 para se deslocar de gestão de crises financeiras de curto prazo para uma perspectiva de desenvolvimento a longo prazo,”U.N. Secretário-Geral Ban Ki-moon disse aos jornalistas chineses em Nova York em agosto. 26, de acordo com a agência de notícias estatal Xinhua.

Mas a realidade não é assim que funciona e enormes atritos já se encontram abaixo da superfície, especialmente sobre o anfitrião. Além de uma situação geopolítica muito confuso no Mar do Sul da China, Reino Médio enfrenta uma crise econômica em casa.

Nem o Ocidente nem a China sabe como lidar com os problemas de excesso de capacidade e de dívida da China sem arruinar o comércio mundial e globalização totalmente, muito menos promover o crescimento inclusivo e energia verde.

“A China está bravo com quase todo mundo no momento,”Um diplomata ocidental com sede em Pequim disse ao The Fiscal Tempos. “É um campo minado para a China.”

Efeito global

Apesar sistema financeiro relativamente fechada da China, o crescimento econômico de muitos países, como o Brasil ea Austrália, depende de enorme consumo de mercadorias da China. Outros países, como os Estados Unidos, não são vitalmente dependente de entradas chinesas de capital, mas nos acostumamos a títulos do Tesouro de negociação e New York imobiliário para produtos chineses baratos.

Idealmente, o Ocidente iria encorajar a China em sua busca oficial para reformar e reequilibrar a sua economia de exportação de fabricação e investimento em infra-estrutura para um serviço mais- e na economia do consumo.

Dos Estados Unidos ea maioria do défice comercial da Europa com a China seria reduzido. O consumidor chinês teria mais renda para consumir em casa, importação de bens e serviços ocidentais em vez de mercadorias.

Não há mundo após o amanhã onde a China desvaloriza por 20 por cento.

- Hugh Hendry, diretor gerente de carteira, Eclectica Asset Management

“As reformas estruturais necessárias tornaria o maior mercado consumidor do mundo. Cada outra economia beneficiaria,”Economista independente Andy Xie escreveu no South China Morning Post.

Os líderes chineses e meios de comunicação do Estado têm sublinhado repetidamente que estão por trás dessa meta. “O que é chamado de não é correções temporárias: Meu governo tem resistido às tentações de flexibilização quantitativa e desvalorização da moeda competitiva. Ao invés, nós escolhemos reforma estrutural," Xinhua citou Premier Li Keqiang, que disse que o país não tem Plano B.

líder Regime Xi Jinping voltou a sublinhar a importância da reforma em uma reunião dos Central Leading Group para aprofundamento da reforma geral. “O país deve se concentrar mais em reformas do sistema econômico e melhorar os mecanismos fundamentais que suportam estas revisões," Xinhua escreveu cerca de um comunicado divulgado pelo grupo.

Contudo, China não tenha inteiramente seguido com as reformas, o que fará com turbulência de curto prazo, e os governos locais não estão preparados para lidar com a agitação do trabalhador. Até 6 milhões de pessoas perderão seus empregos por causa do programa de reequilíbrio do regime, eo funcionário taxa de desemprego poderia atingir 12.9 por cento, de acordo com um relatório da empresa de pesquisa de Fathom Consulting.

Por exemplo, Província de Hebei deveria fechar 18.4 milhões de toneladas de capacidade de produção de aço em 2016. Até o final de julho, ele só tinha fechado 1.9 milhões de toneladas, de acordo com Goldman Sachs.

(Goldman Sachs)

província de Hebei deveria fechar 18.4 milhão de toneladas de capacidade de aço de produção anual e só conseguiu fechar 1.9 milhões de toneladas até o final de julho. (Goldman Sachs)

As economias da Austrália, Brasil, Rússia, e África-todas as South grandes exportadores de-são commodities diminuindo porque as importações chinesas entraram em colapso, queda 14.2 por cento em 2015 sozinho, de acordo com a Organização Mundial do Comércio. Dentro 2015, importações de mercadorias mundial caiu 12.4 por cento, enquanto as exportações mundiais de mercadorias caiu 13.5 por cento.

As exportações australianas e importações (Organização Mundial do Comércio)

As exportações australianas e importações. (Organização Mundial do Comércio)

Este colapso do comércio mundial aconteceu antes que a China ainda começou a implementar seus objetivos de reduzir o excesso de capacidade, liberalização da conta de capital, e flutuando a sua moeda.

Ao invés, foi ganhando tempo, empurrando crédito na economia e gastá-lo em investimentos de infra-estrutura por meio de empresas estatais e governos locais, enquanto empresas privadas têm jogado a toalha.

(Morgan Stanley)

(Morgan Stanley)

Problema da dívida

A China também disse bancos para não empurrar as empresas inadimplentes em default, mas em vez de fazer seus empréstimos evergreen ou troca de dívida por capital próprio.

A verdadeira questão o Ocidente ea China deve estar se perguntando quanta dor que eles podem suportar no curto prazo para atingir as metas de reforma chinês e alcançar um reequilíbrio em direção a uma economia de consumo.

“Para evitar uma crise financeira que seria ruim para a China eo mundo, o governo precisa apertar restrições orçamentárias, permitir que algumas empresas vão à falência, reconhecer as perdas no sistema financeiro, e recapitalizar bancos, se necessário. ... A história mostra que faz mais sentido para ajudar os trabalhadores e as comunidades afetadas, em vez de tentar manter as empresas vivas que não têm nenhuma perspectiva de sucesso,”Brookings Institution afirmou em um artigo sobre o assunto.

Contudo, as soluções propostas, que, a longo prazo seria bom para a China e para o mundo, não pode acontecer sem perturbar o sistema financeiro global no curto prazo.

O investidor bilionário Jim Rogers identificou a principal questão em uma entrevista com Real Vision TV: “Eu certamente gostaria de ver mais as forças de mercado em todos os lugares, incluindo na China. Se isso acontecer, você provavelmente verá mais flutuações no valor da moeda “.

O que soa inocente, Contudo, será ainda mais prejudicial para o comércio mundial e do sistema financeiro global. Se a China quer realizar as perdas que acumularam através 15 anos de má alocação de capital, ele terá para recapitalizar os bancos, no montante de $3 trilhão.

É impossível fazer isso sem intervenção pesada do banco central do tipo Li Keqiang queria evitar. Por outro lado, poupadores chineses vão tentar mover ainda mais dinheiro para o exterior para proteger o poder de compra da moeda.

Dentro 2015 sozinho, China perdeu $676 bilhões em saídas de capital, principalmente porque os residentes e empresas queriam diversificar suas economias, a maioria dos quais são amarrados no sistema bancário chinês.

Se a China para reestruturar a dívida corporativa e recapitalizar os bancos em grande escala, moeda iria desvalorizar em pelo menos 20 por cento, de acordo com a maioria dos especialistas.

Fechar Trade

Porque a China é um jogador tão grande, exportação e importação $4 trilhões de bens e serviços em 2015, uma 20 por cento desvalorização da moeda chinesa iria destruir o mecanismo de preços atual para importadores e exportadores de todo o mundo-um cenário de destruição mutuamente assegurada.

“O mundo é longo. O euro se rompe; simplesmente não há euro nesse cenário. Tudo bate na parede. Não há mundo após o amanhã onde a China desvaloriza por 20 por cento. Sua participação no comércio mundial nunca foi tão alta. ... Você destruiria fabricação global,”Hugh Hendry, diretor gerente de portfólio da Asset Management Eclectica, disse à TV Real Vision.

O comércio global para as economias desenvolvidas já está em recessão (Organização Mundial do Comércio)

O comércio global para as economias desenvolvidas já está em recessão. (Organização Mundial do Comércio)

Para a própria China, um importador líquido de produtos alimentares, uma desvalorização faria necessidades ainda mais caro para a grande maioria da população, adição de uma camada de agitação social no topo das pressões de desemprego.

Assim, a China é condenado se fizer e condenado se não o fizerem. Mesmo o Ocidente não vai favorecer um cenário de desvalorização rápida e doloroso e não é a melhor forma de oferecer muitas alternativas.

A outra opção, possivelmente discutido portas fechadas na L-20, é um cenário Japão. China não vai perceber dívidas incobráveis, irá manter as empresas zumbis vivos, e impedirá que o dinheiro de mudança para o estrangeiro, calote em sua ambiciosa agenda de reformas.

“Em vez de um ajuste rápido, uma ‘abordagem de ajuste gradual’ nos deixaria com o resultado de um longo período de excesso de capacidade, pressões desinflacionárias, e declínio do crescimento nominal e retorna na economia,”Banco de investimentos Morgan Stanley afirmou em nota.

China, o Oeste, e Japão compartilham o mesmo problema do excesso de dívida e não há maneira expediente para se livrar dele. Por não nomear os problemas reais na mão e escolhendo temas sentir-se bem, em vez, o G-20 já admitiu a derrota em encontrar uma solução para o problema.

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yuan chinês nota em uma agência do Banco Industrial e Comercial da China (ICBC), Em março 14, 2011 em Huaibei, China. O governo chinês está gastando agora até 15 por cento do PIB em estímulo fiscal. (ChinaFotoPress / Getty Images)yuan chinês nota em uma agência do Banco Industrial e Comercial da China (ICBC), Em março 14, 2011 em Huaibei, China. O governo chinês está gastando agora até 15 por cento do PIB em estímulo fiscal. (ChinaFotoPress / Getty Images)

Por anos, o mundo ficou maravilhado com a da China reservas internacionais ($4 trilhão em seu pico em 2014) e endividamento de baixo governo, 21 por cento de PIB no final de 2015.

Isso está prestes a mudar, Contudo, como gastos fiscais foi-se 15.1 por cento no primeiro semestre de 2016 para combater uma desaceleração da economia e atingir o oficial alvo crescimento PIB.

“Rebote crescimento da China no primeiro semestre deste ano foi fortemente apoiada por uma política fiscal ativa que tem significativamente front-loaded gastos on-budget e fomentou um forte crescimento do investimento fora do orçamento em infra-estrutura,”Goldman Sachs escreve em uma nota aos clientes.

distribuição dívida da China (Macquarie)

distribuição dívida da China (Macquarie)

O governo diz que o déficit no orçamento deste ano é de apenas cerca 3 por cento do PIB. Alguns banqueiros centrais quer impulsionar-lo para 5 por cento, porque eles acham que a política monetária por si só não será capaz de manter a economia em conjunto.

Se eles estão tentando resistir a uma desaceleração induzida pela dívida com mais dívida e por quarto perdendo no balanço do governo central, Eu estou com medo China está caminhando para um destino pior do que o Japão.

- Worth Wray, Wealth Management STA

Além disso, as pessoas estão começando a olhar para dívida do governo chinês diferentemente. De acordo com estimativas da Goldman Sachs, déficit fiscal total da China está se aproximando 15 por cento em vez de 3 ou 5 por cento.

“Tentamos‘Aumentar’as medidas oficiais de política fiscal, incorporando fora do orçamento política de quasi-fiscal para obter uma imagem completa da postura de autoridade fiscal da China,”Goldman Sachs escreve.

déficit fiscal total da China de acordo com cálculos do Goldman Sachs (Goldman Sachs)

déficit fiscal total da China de acordo com cálculos do Goldman Sachs (Goldman Sachs)

Para chegar ao 15 por cento, Goldman olha gastos em infraestrutura no total, que é impulsionado pelo governo central, Empresas Estatais (SOE), ou governos locais. As estatais estão em dívida para com a melodia de 101 por cento do PIB e os governos locais através de seus veículos off-financiamento do balanço ter sobre 40 por cento do PIB.

"Especificamente, nós resumir a investimentos em ativos fixos em sectores como os transportes, armazenamento, e serviço postal, e conservação de água, meio ambiente e utilitário de gerenciamento. Assumimos a maior parte da despesa nestes sectores é fortemente orientada para o estado,”O banco escreve, observando que a análise não é completa, mas oferece um bom substituto.

A explosão recente dos investimentos foi realizada por Empresas Estatais chinesas (Economia Capital)

A explosão recente dos investimentos foi realizada por Empresas Estatais chinesas (Economia Capital)

A teoria sustenta-se quando se olha para gráficos de investimentos em ativos fixos por setor estatal, que ampliada à frente no início do ano, mas recentemente puxado para trás.

Parcerias Público-Privadas

Porque investimento por empresas privadas se tornou negativo, o regime está tentando continuar o estímulo fiscal e obter o setor privado envolvido através dos chamados parcerias público-privadas (PPP).

De acordo com a Xinhua, China quer financiar 9,285 projetos no valor de $1.6 trilhão em projetos de infraestrutura, como transporte público ou instalações, como estádios desportivos. De acordo com a Comissão Nacional de Desenvolvimento e Reforma (NDRC), $151 bilhões desses projetos foram assinados no final de julho 2016.

As estatais também são centrais para a questão do excesso de capacidade.

- Goldman Sachs

O banco de investimentos Morgan Stanley não acho que as iniciativas terão sucesso, Contudo.

“Esperamos PPP ter impacto limitado sobre o crescimento do investimento da China, considerando o tamanho pequeno de projetos de PPP em execução, ainda baixa participação privada, e mais fraco [crédito] crescimento,”Morgan Stanley escreve em uma nota.

Portanto, parece que as empresas estatais terão de fazer o trabalho pesado novamente, apesar de falências de montagem e retornos sobre o investimento abismais.

“As empresas estatais também são centrais para a questão do excesso de capacidade. De acordo com uma pesquisa oficial, a proporção média de utilização na indústria de transformação foi 66.6 por cento em 2015, com redução de 4.4 pontos percentuais em comparação com 2014. A maior parte dos sectores que enfrentam problemas de excesso de capacidade são dominadas por empresas estatais, tais como o aço e o carvão,”Escreve Goldman.

Worth Wray, o chefe estrategista da STA Wealth Management pensa motivos de curto prazo poderia estar por trás da explosão em gastar este ano.

“Se isto é sobre a compra de tempo, até depois da reunião do G20 em setembro, após a inclusão do yuan na Fundo Monetário Internacional (FMI) cesta de moeda de reserva em outubro, e depois da U.S. eleição presidencial em novembro. Então eu posso entender por que enorme estímulo fiscal e de crédito em 2016 poderia fazer sentido.”

Longo prazo, Contudo, esta estratégia não será sustentável, de acordo com Wray: “Se eles estão tentando resistir a uma desaceleração induzida pela dívida com mais dívida e por quarto perdendo no balanço do governo central, Temo China está caminhando para um destino pior do que o Japão.”

Assim será a farra de gastos continuam? Goldman diz que sim, o governo quer atingir sua meta oficial do PIB para 2016.

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Vice Premier Li Keqiang of China (R) meets International Monetary Fund (FMI), Managing Director Christine Lagarde (eu) inside the Great Hall of the People in Beijing on March 23, 2015 em Pequim, China. (Lintao Zhang/Getty Images)Vice Premier Li Keqiang of China (R) meets International Monetary Fund (FMI), Managing Director Christine Lagarde (eu) inside the Great Hall of the People in Beijing on March 23, 2015 em Pequim, China. (Lintao Zhang/Getty Images)

They promised, they delivered. The World Bank will issue a $2.8 billion SDR bond, ou Direitos Especiais de Saque bond, in China in August. Separately, the China Development Bank will also issue between $300 milhões para $800 milhão of SDR notes.

China, a Fundo Monetário Internacional (FMI), and interested think tanks have been pushing the idea of private SDR since the beginning of the year. It has now come to fruition. But what does it actually mean?

Inicialmente, SDR-denominated bonds will be of particular interest to official investors, but gradually, they will also attract investors from private sectors.

— Zhu Jun, director general, PBOC

O assim chamado SDR is an IMF construct of real currencies, agora o euro, yen, dólar, e libra, without actually containing any of them. It is just a claim to demand payment in these currencies. Ele foi notícia no ano passado quando o renminbi chinês também foi admitido, although it won’t formally be part of the basket until Oct. 1 of this year. The IMF and member countries trade the units currently worth $1.40 among each other.

“Initially, SDR-denominated bonds will be of particular interest to official investors, but gradually, they will also attract investors from private sectors. In such a way an SDR bond market will be developed,” Zhu Jun, the director general of the People’s Bank of China’s (PBOC) international department told Chinese business paper Caixin.

Worth Wray, the chief global macro strategist of STA Wealth Management agrees: “Right now there is no organic demand, but over a five-year horizon it could develop globally and maybe that creates another channel for capital to flow into China—if that’s the only market there is for it,” he said in an interview.

The SDR bonds issued by the two official institutions are different from the official SDR issued by the IMF. de fato, they are a derivative of it. When the World Bank unit called International Bank for Reconstruction and Development (IBRD) issues the bonds, it receives payment in yuan from the Chinese market or at first from the issue’s underwriter, the Industrial and Commercial Bank of China.

It can then proceed to spend the yuan either in China or exchange them for other currencies and spend them abroad. So far the IBRD has disbursed $46 billion worth of loans, grants, and credits in China. It is important to note that this process is effectively creating SDR, which have previously not existed.

Chinese investors receive the SDR bonds, but what do they actually own?

For the Chinese investors, there is the advantage that they can hold a sizeable non-yuan denominated asset in China and reduce their risk to the Chinese currency.

Official SDRs can be redeemed for dollars, euros, yen, pound, and soon yuan through the IMF. Contudo, the new private SDR, or M-SDR as the IMF calls them, cannot. The new bonds represent a claim on the IBRD. Since the IBRD doesn’t have any SDR assets, the repayment will also be in yuan, dólar, euro, yen, or pounds. So what’s the point of having this new basket?

For the IBRD, there is no advantage because it is borrowing in strong currencies and getting paid in a relatively weak one. For the Chinese investors, there is the advantage that they can hold a sizeable non-yuan denominated asset in China and reduce their risk to the Chinese currency, which may further fall in value. Because of still existing capital controls, buying foreign assets in size is not yet possible on the Chinese domestic bond market.

Contudo, this is only an advantage for the time being. At the point of maturity, foreign currency will have to flow from the IBRD to the Chinese bond holders, unless they choose repayment in yuan, in which case the whole exercise would be rather pointless.

So given this lackluster value proposition, why are China, o FMI, and the U.S. controlled World Bank going out of their way to push the SDR into private markets?

Prominent market observers like James Rickards and Willem Middelkoop have long argued that the SDR will be the next world reserve currency. de fato, the current governor of the PBOC Zhou Xiaochuan has advocated for the SDR to become the next global reserve currency for a long time now.

“Uma atenção especial deve ser dada para dar o SDR um papel maior. A SDR tem as características e potencial para atuar como uma moeda de reserva super-soberano,” wrote Zhou in 2009. He also wanted the yuan to be included in the SDR, which is going to happen on Oct. 1. Take heed of his predictions.

It’s a geeky name but it’s a kind of world money printed by the IMF. They’ll flood the world with trillions of SDRs.

— James Rickards

“The Chinese … have made it very clear that the Special Drawing Rights of the IMF is the preferred future international world reserve currency,” writes Willem Middelkoop in a note to clients.

“What you are going to see is world money. You are going to see the IMF print Special Drawing Rights (SDR). It’s a geeky name but it’s a kind of world money printed by the IMF. They’ll flood the world with trillions of SDRs," James Rickards told Epoch Times earlier this year.

Now that the first issuance is well underway, it is easy to lever up the balance sheets of international development organizations and keep issuing—or printing—SDR obligations even in the trillions until even private market actors support and accept them. Once the SDR is widely accepted as payment, the IMF could just redeem all outstanding local currencies for SDR and the world would not only have a new reserve currency, but just one global currency.

“You create new liquidity. That’s the kind of reform that could change the international system immediately,” says Worth Wray.

Willem Middelkoop says this could be done through an IMF substitution fund, an idea already discussed in the 1970s. “This fund could facilitate a direct exchange of dollars for SDRs. The liquidity issue would be resolved with one stroke of the pen, as an SDR would be created for every dollar that was exchanged,” he writes in his note.

Sounds crazy? It is, but the official plan is right here, for everyone to see.

Twitter: @vxschmid

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A Chinese steel worker walks past steel rods at a plant on April 6, 2016 em Tangshan, Hebei province, China. (Kevin Frayer / Getty Images)A Chinese steel worker walks past steel rods at a plant on April 6, 2016 em Tangshan, Hebei province, China. (Kevin Frayer / Getty Images)

One year after the mini-devaluation of the Chinese currency, China is getting desperate about its corporate debt situation and is directives to evergreen loans. According to an Aug. 8 Caixin report, the banking regulator is now telling banks to get rid of bad bank debt by swapping it for equity.

Local media Caixin reports that the China Banking Regulatory Commission (CBRC) issued a directive to encourage government owned so-called Asset Management Companies (AMC) to buy bad loans from banks. This exercise worked well during the last banking bail-out at the beginning of the millennium and China has prepared itself for another round since 2012, when local governments started to set up 27 new AMCs.

Instead of keeping a loan that a company can’t repay and writing it down, the bank would get an equity stake in the company. Because banks aren’t allowed to hold equity in companies, they would sell the equity stake to an AMC at a price the bank can afford without hurting bank equity too much. AMCs would get the money from local or the central government or the central bank.

The directive says that firms in the troubled steel and coal sectors will be the first to try the arrangement. Contudo, only companies should be supported which have made efforts to cut overcapacity and improve profitability and whose problems are temporary, similar to another directive by the CBRC and first reported by Chinese National Business Daily about rolling over defaulted loans.

(Societe Generale)

(Societe Generale)

“A Notice About How the Creditor Committees at Banks and Financial Institutes Should Do Their Jobs” tells banks to “act together and not ‘randomly stop giving or pulling loans.’ These institutes should either provide new loans after taking back the old ones or provide a loan extension, a ‘totalmente ajudar as empresas a resolver os seus problemas,'" a National Business Daily escreve.

The recent leaks in relatively quick succession may be proof of hedge fund manager Kyle Bass’s concern of “the Chinese corporate bond market freezing up,” as he said in an interview with RealVisionTV in June. “We are seeing the Chinese machine literally break down.

“In the West, the speculation is always about the Lehman moment in China. That is a Western fantasy. Chinese politicians know what’s coming up and have a plan to manage the bad loans,” Horst Loechel, an economics professor at the Frankfurt School of Management told the Wharton Business School. Evergreening and debt for equity swaps seem to be that plan.

Kyle Bass estimates bad loans in Chinese banks could lose up to $3 trillion in bank capital if all loans were properly written down.

In transactions from 2015, where banks sold defaulted loans to AMCs in Zhejiang province, they only received 32 percent of their original value, down from 43 por cento em 2014 according to a regional AMC manager quoted by Caixin.

The announcement comes in the wake of seven government-owned coal miners in Shanxi being allowed to extend maturities on existing debt, according to state mouthpiece Xinhua, a shipbuilder failing to make a payment on a $60 million one-year bond on Aug. 8 according to Bloomberg, and a developer defaulting on a $380 million offshore bond in Hong Kong, according to the Wall Street Journal.

For good measure, the National Association of Financial Market Institutional Investors (NAMFII), an organization backed by the central bank, has enquired with major banks and brokers to see whether it would be possible to roll out a credit default swap market in China, de acordo com Wall Street Journal. Credit default swaps are insurance contracts on bond defaults, precisely what China needs right now.

According to the report, the regulator responsible for the $8.5 billion corporate bond market with soaring defaults, is drafting rules to make Chinese CDS compliant with international practices. The Journal reports that the regulator will soon ask the People’s Bank of China (PBOC) for approval.

Depois de 39 defaults this year totalling $3.8 bilhão, it is about time.

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As pessoas trabalham em uma plataforma de engenharia de petróleo offshore em Qingdao, Shandong province, julho 1, 2016. Because of too much debt, a Chinese engineering company has recently transformed itself into a bank.  
(STR / AFP / Getty Images)As pessoas trabalham em uma plataforma de engenharia de petróleo offshore em Qingdao, Shandong province, julho 1, 2016. Because of too much debt, a Chinese engineering company has recently transformed itself into a bank.  
(STR / AFP / Getty Images)

China is desperate to solve several problems it has due to its debt to GDP ratio being north of 300 por cento. It may have found a pretty unconventional one by letting companies become banks, de acordo com um relatório do Wall Street Journal.

With profits headed south, heavily indebted Chinese heavy-machinery giant Sany Heavy Industries said this week it won approval to set up a bank in the Hunan Province city of Changsha. With 3 bilhões de yuans ($450 milhão) of registered capital, it will be a relatively large institution as Chinese city-based banks go. Sanyplans to join forces with a pharmaceutical company and an aluminum company.

Sany already operates an insurance and finance division with the goal of internal financing and insurance services for clients.

Sany Heavy Industries already operates a Finance and Insurance arm, although it's unclear what gold has to do with it. (Company Website)

Sany Heavy Industries already operates a Finance and Insurance arm, although it’s unclear what gold has to do with it. (Company Website)

Problema da dívida

One problem is that companies are defaulting on bond payments and there is no adequate resolution mechanism for bad debts, at least according to Goldman Sachs.

“A clearer debt resolution process (por exemplo, how debt restructuring on public bonds can be achieved, how valuation and recovery on defaulted bonds are arrived at, the timely disclosure of information and clarity on court-sanctioned processes) would help to pave the way for more defaults, which in our view are needed if policymakers are to deliver on structural reforms,” the investment bank writes in a note.

It would not be the first time China tries a circular financial arrangement to solve some structural issues.

By becoming or owning banks, the companies can just shift debt around different balance sheets to avoid a default, although this is probably not the resolution that Goldman Sachs had in mind when talking about structural reforms.

Another problem is that the regime has more and more difficulties pushing more debt into the economy to grease the wheels and keep GDP growth from collapsing entirely.

China needs 11.9 units of new debt to create one unit of GDP growth. Ao mesmo tempo, the velocity of money or the measure of how often one unit of money changes hands during a year has fallen to below 0.5, another measure of how saturated the economy is with uneconomical credit. If the velocity of money goes down, the economy needs a higher stock of money to keep the same level of activity.

(Macquarie)

(Macquarie)

So if companies can’t pay back loans, old banks don’t want to give out loans, and consumers don’t want to circulate the money, you can just let some companies become banks to prevent them from defaulting and maybe even issue new loans to themselves. It would not be the first time China has tried a circular financial arrangement to solve some structural issues.

Sany Not Alone

According to the Wall Street Journal report, the Sany Heavy Industries case is only one of a few. Other companies in the tobacco and travel sectors, por exemplo, have taken over banks or formed new ones.

ChinaTopix reports that the China Banking Regulatory Commission (CBRC) has already awarded five licenses for private banks and received another 12 applications during the past year. It also mentions that industrial firms are behind this move:

“One bank, Fujian Huatong Bank, which has a registered capital of Rmb3 billion ($450 milhão), was promoted by 10 Fujian-based companies in different sectors, including retail, manufacturing and real estate.”

We don’t know if the regulator had this in mind when they launched the initiative to boost private banks in China in 2014 in order to improve lending to the technology sector, but it did explicitly mention that private companies should form banks.

“Qualified private enterprises shall be encouraged to set up private banks. The innovation of products, services, management, and technology by private banks will inject new vitality into the sustainable and innovative development of the banking sector,” the CBRC states in an undated report.

It remains to be seen whether this is a long-term sustainable solution.

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Fundo Monetário Internacional Managing Director Christine Lagarde fala no 40º aniversário da reunião IMFC, na sede do FMI em Washington, abril 20, 2013. (Stephen Jaffe / FMI via Getty Images)Fundo Monetário Internacional Managing Director Christine Lagarde fala no 40º aniversário da reunião IMFC, na sede do FMI em Washington, abril 20, 2013. (Stephen Jaffe / FMI via Getty Images)

Quando Bloomberg relatou no ano passado que China fundou um trabalho grupo para explorar o uso da supranacional Direitos Especiais de Saque (SDR) moeda, ninguém tomou cuidado.

Agora em agosto de 2016, estamos muito perto da primeira emissão SDR do setor privado desde os anos 1980.

artigos de opinião na mídia e especulações por fontes bem informadas nos preparou para o lançamento de um instrumento a maioria das pessoas não sabe sobre no início 2016. Então o Fundo Monetário Internacional (FMI) -se publicaram um artigo que discute o uso de SDRs do setor privado em julho e um funcionário do banco central chinês confirmou uma organização de desenvolvimento internacional em breve emitir títulos SDR na China, segundo a imprensa chinesa Caixin.

Caixin agora confirmado que a organização exatamente emitirá os títulos e quando: O Banco Mundial eo Banco de Desenvolvimento da China emitirá setor privado ou SDR “M” em agosto.

O assim chamado SDR são uma construção FMI de moedas reais, agora o euro, yen, dólar, e libra. Ele foi notícia no ano passado quando o renminbi chinês também foi admitido, apesar de não ser formalmente parte da cesta até 1º de outubro deste ano.

Quantos? Nikkei Asian revisão relata o volume irá situar-se entre $300 e $800 milhão e alguns bancos japoneses estão interessados ​​em assumir uma participação. De acordo com Nikkei alguns outros bancos chineses também estão planejando a emissão de obrigações SDR. Um deles poderia ser o Banco Industrial e Comercial da China (ICBC) de acordo com o site chinês Yicai.com.

O FMI experiências com estes M-SDRs na década de 1970 e 1980, quando os bancos tinham SDR 5-7 bilhões em depósitos e empresas tinha emitido SDR 563 milhões em títulos. Uma quantidade insignificante, mas o conceito funcionou na prática.

Os ministros das Finanças do G20 confirmou que vai empurrar esta questão, apesar da relutância do sector privado a usar esses instrumentos. No seu comunicado divulgado depois do encontro na China em julho 24:

“Apoiamos o exame do uso mais amplo da SDR, tais como a publicação mais ampla de contas e estatísticas na SDR ea emissão potencial de ligações SDR-denominados, como uma forma de aumentar a resistência [do sistema financeiro]."

Eles estão seguindo o conselho do governador do Banco Popular da China (PBOC), Zhou Xiaochuan, embora um pouco tarde. Ja entrou 2009 ele pediu nada menos do que uma nova moeda de reserva mundial.

“Uma atenção especial deve ser dada para dar o SDR um papel maior. A SDR tem as características e potencial para atuar como uma moeda de reserva super-soberano,”Escreveu Zhou.

Sete anos mais tarde, parece que ele não estava brincando.

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A man reads a newspaper report that China's central bank announced it will devalue China's tightly controlled currency on Aug. 11, 2015 following a slump in trade, triggering the yuan's biggest one-day decline in a decade. (AP Photo / Andy Wong)A man reads a newspaper report that China's central bank announced it will devalue China's tightly controlled currency on Aug. 11, 2015 following a slump in trade, triggering the yuan's biggest one-day decline in a decade. (AP Photo / Andy Wong)

The more debt the merrier, the saying goes, at least until the party stops and the hangover starts. This is true for the debt situation inside China, as well as for international lending to China.

According to the Bank for International Settlements (BIS), total cross-border bank lending to China decreased $63 bilhões para $698 billion at the end of the first quarter of 2016. Over the year, this measure is down 27 por cento.

“Since hitting its all-time high at the end of September 2014, cross-border bank credit to China has contracted by a cumulative $367 bilhão (–33 percent), with interbank and inter-office activity leading the decline,” the BIS writes in a recent report.

The total stock of outstanding cross-border bank credit was $27.5 trillion at the end of March 2016.

This is important because that money is not coming back. Once the loan or debt is paid off, it vanishes and can’t be used to fuel other financial or economic transactions. It is part of the reason why many economies in the world are teetering on the edge of a recession with only bank lending to Western governments balancing out the emerging market credit decline.

The reduction in bank lending is part of the capital that is flowing out of China by the hundreds of billions, $676 bilhões em 2015 sozinho.

International Institute of Finance (IIF)

International Institute of Finance (IIF)

Banks in Hong Kong decreased their China exposure by 4.5 percentage points from 32.8 percent of assets at the end of 2014 para 27.3 percent at the end of 2015, according to rating agency Fitch, the first decrease in a decade.

International banks are wary of a slowing Chinese economy and a rise in corporate defaults.

According to rating agency Standard and Poor’s (S&P), China’s credit quality is “deteriorating more quickly than at any time since 2009,” it states in a recent report. S&P downgraded three companies for every company upgraded in the first half of 2016.

Chinese corporates will “come under increasing strain as economic growth slows, industrial overcapacity crimps profitability and cash flow, and an elevated appetite for expansion weakens leverage.”

Claims of international banks of different countries in U.S. dollar trillion (esquerda) and U.S. dollar billion (certo) (Bank for International Settlements (BIS))

Claims of international banks of different countries in U.S. dollar trillion (esquerda) and U.S. dollar billion (certo) (Bank for International Settlements (BIS))

And international banks don’t want to wait for that to happen. Neither do they want to wait for a sharp devaluation of the Chinese currency.

“A sharp depreciation of the yuan, which would be the consequence if the [foreign currency] reserves would have to be used to safeguard systematically important entities that do have foreign currency debt. This would be the consequence of a failure to act, a recession and, in the worst case, a financial crisis. Again, something that’s survivable; not the end of the world, but very costly and politically destabilizing," said Citigroup chief economist Willem Buiter.

Hugh Hendry, principal at the hedge fund Eclectica is more pessimistic:

“Tomorrow we wake up and China has devalued 20 por cento, the world is over. The world is over. O euro se rompe. Everything hits a wall. There’s no euro in that scenario. Os EUA. economia, I mean everything hits a wall,” he told RealVisionTV earlier this year.

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