The Chinese Capital Flight Doom Loop & Why A One-Off Depreciation Could Cause A Crisis

The Chinese Capital Flight Doom Loop & Why A One-Off Depreciation Could Cause A Crisis

I can summarize all of China's problems in one sentence: Beijing is trying to delver and releverage simultaneously. That's the crux of the problem for the PBoC. See the thing is, everyone already thinks the notion that the Chinese economy is growing at a ~6.5% clip is absurd. If you start aggressively reining in credit creation (i.e. if we start seeing big declines in TSF), then the charade will be impossible to keep up. Additionally, the Politburo is well aware of the fact that when it come
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2 thoughts on “The Chinese Capital Flight Doom Loop & Why A One-Off Depreciation Could Cause A Crisis

  1. Dear H,
    I really do…..no sarcasm…… enjoy reading your posts but, there is always a but ( being Swedish), I do find it difficult at times to undestand your abbreviations. Would really really appreciate if you could consider giving a short explanation to the not so obvious ones I cannot find in Investopedia.
    Best Regards, JP

  2. SOE – State-Owned Enterprises
    NPL – Non-Performing Loans
    PBoC – Peoples’ Bank of China
    RMB – “Renminbi” is the official name of the currency introduced by the Communist People’s Republic of China at the time of its foundation in 1949. It means “the people’s currency”. “Yuan” is the name of a unit of the renminbi currency. Something may cost one yuan or 10 yuan.
    BIS – Bank for International Settlements
    ECB – European Central Bank
    MSCI – Morgan Stanley Capital International
    Fed – US Federal Reserve

    … hope this helps …

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