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© Thomson Reuters 2021.China's banks are bursting with dollars, and that's a worry
By Winni Zhou and Tom Westbrook SHANGHAI/SINGAPORE©2024 GPlusMedia Inc.
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Desert Tortoise
The Yuen rising in value and the US Dollar falling in value are the best thing that could happen for the US trade balance.
quercetum
China is a currency manipulator without Plaza Accord restraints. Japan was too “nice” to have let the yen strengthened 50% back in the day.
Wakarimasen
As the Fed prints ever more dollars, how is this a surprise? The change in USD/CNY will not do much for the trade deficit as the dollar continues to depreciate against almost all other currencies. Feels like a big crisis coming
Laguna
The federal budget deficit varies widely, generally between 2-3% of GDP but can soar for various reasons, mostly war (it hit 26.9% in 1942). That of 2021 is expected to be 9.8% due to the effects of covid, both on lowered GDP and increased government spending, but is anticipated to rapidly fall to historic levels very soon as the economy soars and covid expenses vanish. As for China sitting on a pile of dollars: if they try to convert it to yuan, the yuan will soar, so they're forced to simply sit on it (or buy dollar-based assets such as property in America).
But, basically, they're sending the US stuff and the US is sending them paper. Americans seem to like that, and it could eventually benefit both sides as China's rapidly-aging society may reverse trade flows: China sends the dollars back to buy US goods so as to support its aged.
Sven Asai
I am here to help everyone and immediately. If the space becomes too small for all the unwanted dollars, feel free to send me a ship container full with them. lol
mmwkdw
It's very hard to transfer legitimate savings/money out of China, doing so nowadays makes your a Criminal since you need to seek assistance from the Black Marketeers...
Desert Tortoise
With a telephone app you can do it from anywhere in the world. Chinese owned businesses all over the world keep their earnings in Chinese banks transferring money in and out using phone apps.