China´s debts level has reached record heights, but the state will continue to guarantee sovereign debts, writes financial analyst Sara Hsu. And that support is also extended to state-owned companies like Cosco and ChemChina, despite downward pressures from the rating agencies, she argues in the Diplomat.
Category Archives: debts
China has been losing massive foreign assets trying to manage its unruly financial markets. Financial analyst Victor Shih believes that for Beijing, alarm bells might to off when foreign reserves go under US$3 trillion, he tells at Bloomberg. And we might be at that point fast.
Things look not well for China´s economy, say a range of economists to Bloomberg. They include political and financial analyst Victor Shih, who fear the lack of income might force China into even larger debts, as it wants the economy to keep on humming.
China´s financial authorities are reviving so-called asset-backed securities (ABS) in a moderate pace. But ABS-expert Ann Rutledge warns in the China Economic Review against the dangers of this financial tool in the murky China financial markets.
Debts are high on the agenda of the central and local governments, as local resources to pay debts of get capital for investments diminish, tells associate-professor Victor Shih in Bloomberg. The efforts of the central government to relieve local governments from debts might not help everybody.
The China Investment Corporation (CIC) obtained 100 billion US$ bond issue from the Ministry of Finance to finance the One Road, One Belt initiative, writes financial analyst Sara Hsu in The Diplomat. Although CIC has been initially less successful, Hsu expects China´s largest sovereign wealth fund will be able to make a huge profit.
The recent downturn in the stock market and the government restrictions on money capital transfers might hit transfers in China´s football leagues, says financial analyst Victor Shih to Associated Press. “It is a general problem for wealthy people in China who are major shareholders in companies,”
China has accumulated debts US$25 trillion and because of the relative high interest rates, that level of debt is unsustainable, argues financial analyst Victor Shih at the USC U.S.-China Institute. And when China gets into trouble, there is no IMF-style institution with enough capital to save it. A crashing stock market also does not help.