China forex reserves in record fall as Beijing tries to calm markets

[Bussard Ramjet]

The problem is Chinese government is simply too rich to go against. Panic selling by public but if Chinese governement keep buying these state owned company blue chip stock. Price stable. If speculator think they have a good chance of winning against USD3.55 trillion. I will say good luck to them. That is what happen to George soro.

Again, wrong.

Chinese government can buy local stocks only in yuan, where FX reserves don't come into picture.


As for, FX reserves, they are for currency exchange. And no government is rich enough to indefinitely determine exchange rates. At the rates of current capital outflows, Chinese FX reserves can be over in 2 years. There is simply too much yuan in supply in the market. Check M2.

I don't worry it is a continuously sustain out flows.It's not only China's problem ,the whole devoloping countries are suffering from it.And We are the strongest amongst them.

Other countries are not intervening in their exchange rates, because they are dreaming of reserve currency status.

Just check the currencies. They have fallen by as much as 15-20% across board, while Chinese currency has actually risen on Trade weighted basis.

 

[airmarshal]

Indians are so happy. They should know even with perceived fall, India is still no match to China. Keep punching above your weight.

 

[Great Sachin]

Indians are so happy. They should know even with perceived fall, India is still no match to China. Keep punching above your weight.

and where Pakistan is standing?....you guys boast on somebody else richness....pathetic..

 

[EAsian]

Again, wrong.

Chinese government can buy local stocks only in yuan, where FX reserves don't come into picture.


As for, FX reserves, they are for currency exchange. And no government is rich enough to indefinitely determine exchange rates. At the rates of current capital outflows, Chinese FX reserves can be over in 2 years. There is simply too much yuan in supply in the market. Check M2.



Other countries are not intervening in their exchange rates, because they are dreaming of reserve currency status.

Just check the currencies. They have fallen by as much as 15-20% across board, while Chinese currency has actually risen on Trade weighted basis.

What's the point to reserve foreign currecy without using it?It is designed to be used when it need to be used.4 trillions is simply too much. 2 trillions is enough.Hell how many foreign currency reserves does US or UK have?

 

[antonius123]

Unfortunately, the government can use the pension funds in local stock markets, something which China is doing, and which can have catastrophic consequences.

That could happen if the pension fund is invested in US bonds or stock market

If invested in local stock market it wont help.

 

[halupridol]

Indians are so happy. They should know even with perceived fall, India is still no match to China. Keep punching above your weight.

on the contrary,,,we r concerned,,,we want China to develop,dont go by the stupid posts on this forum.
China becoming a strong economic hub is gud for us,,but ofcourse we r a bit wary of there military ambitions.

 

[Aepsilons]

Private assets is private assets,the country can't use it directly to do things for the whole country.

In the case of Our Pension Fund Platform, it does , actually. It benefits the Japanese Society long term and collectively speaking.

This applies only to Japan, I suppose, tomodachi.

1) Forex reserves and pension fund are different items on account booking.

2) Japan only has $1.24 trillion in foreign reserves

View attachment 254640

I understand they are "different" officially, however, the PF is used in same capacity as FOREX, in the case of Japan.

 

[Genesis]

1. Japan doesn't have 3.6 trillion in foreign reserves. (It is 1.3 Trillion; if you still disagree cite your source)
2. Pension funds are denominated in yen, and don't count. China also has huge savings in its banks

Finally a point for both Chinese and Japanese here, DON'T USE ME TO SUPPORT YOUR PREJUDICE.

Was a good user, but probably been trolled one too many times and snapped. We'll see.

Chinese financial system is undoubtedly in stress, and they have made huge blunders in their stock market. Chinese economy is also in a rough patch.

But that is it. Neither is Chinese economy collapsing as if some would have you believe, nor is Chinese economy growing at 7% as Chinese government would have you believe. The truth is complicated, and multi-faceted, and doesn't deserve broad brushes of good or bad.

I think right now it has to be bad to be good.

China's export led growth is undoubtedly over, more or less. It cannot sustain that growth, by real estate and export alone anymore. Turning to service, and domestic consumption is the way to go, while there are bright spots, there are also concerns.

Credit card debts, excessive housing loans, bad investments, and more are just some of the symptoms of a society not accustomed to the new financial system. I believe this will come with time, as it did with the West. We have to keep in mind when the West was making its mistakes with finance, Chinese were still looking for their next meal.

So this stock market and housing market crash is more of an adjustment than a crash, the overall financial system seems to be fine, but the players partaking in the game seems to be low on experience or expertise. It's really a don't hate the player, hate the game deal.

The bright spots are obvious, China has millions of new graduates, established companies that can finally produce top level executives and innovators. Like Xiaomi founder was part of Kingsoft, one plus founder part of Oppo, and so on. China is finally producing people who are experienced, capable, and have the right connections on our own. Service growth has consistently outgrown manufacturing for a few years now, and will take a bigger role, once this generation of innovators, spawn the next generation.

The Chinese proverb, 叶公好龙 comes to mind, when finally China is adjusting our economy to a more sustainable growth model, the same people who are calling for this exact move are now calling China's collapse.

 

[Aepsilons]

1. Japan doesn't have 3.6 trillion in foreign reserves. (It is 1.3 Trillion; if you still disagree cite your source)
2. Pension funds are denominated in yen, and don't count. China also has huge savings in its banks

Finally a point for both Chinese and Japanese here, DON'T USE ME TO SUPPORT YOUR PREJUDICE.

Chinese financial system is undoubtedly in stress, and they have made huge blunders in their stock market. Chinese economy is also in a rough patch.

But that is it. Neither is Chinese economy collapsing as if some would have you believe, nor is Chinese economy growing at 7% as Chinese government would have you believe. The truth is complicated, and multi-faceted, and doesn't deserve broad brushes of good or bad.

I've already made necessary corrections and clarification. Please read.

 

[EAsian]

In the case of Our Pension Fund Platform, it does , actually. It benefits the Japanese Society long term and collectively speaking.

This applies only to Japan, I suppose, tomodachi.



I understand they are "different" officially, however, the PF is used in same capacity as FOREX, in the case of Japan.

Sorry I didn't read your previous post carefully,the most of pension fund is made by yen,so it has nothing to do with forex reserves at all.

 

[Aepsilons]

Sorry I didn't read your previous post carefully,the most of pension fund is made by yen,so it has nothing to do with forex reserves at all.

Capacity of use.

 

[Bussard Ramjet]

In the case of Our Pension Fund Platform, it does , actually. It benefits the Japanese Society long term and collectively speaking.

This applies only to Japan, I suppose, tomodachi.



I understand they are "different" officially, however, the PF is used in same capacity as FOREX, in the case of Japan.

Do you mean to say that your Pension Fund is stored in Foreign Currency?

Had this been true your forex would have been significantly higher.

I just don't understand why it is so hard to understand the difference between FX, and domestic savings. Pension is domestic savings, denominated in yen. Just by the virtue of being the controller of the currency, you can print as much yen as you want.

 

[Aepsilons]

No, pension fund cannot be used to buy/sell foreign currency as a monetary policy tool. This is a standard macro-economics and accounting, Japan is not different from the rest of the world.

I already said it is used for aggressive overseas m&a processes. As well as market stability projects in the past.

Do you mean to say that your Pension Fund is stored in Foreign Currency?

Had this been true your forex would have been significantly higher.

I just don't understand why it is so hard to understand the difference between FX, and domestic savings. Pension is domestic savings, denominated in yen. Just by the virtue of being the controller of the currency, you can print as much yen as you want.

Lol did you ever read ?

Lol, Mr. Ramjet.

 

[Bussard Ramjet]

Capacity of use.

What does this mean?

I already said it is used for aggressive overseas m&a processes. As well as market stability projects in the past.




Lol did you ever read ?

Lol, Mr. Ramjet.

When any Pension Fund uses money to do anything abroad, it effectively exchanges yen with dollars to do things abroad. So you should tell us how much money of Pension funds is denominated in dollars, independent of the FX.

The capacity to make "overseas m&a" doesn't determine FX.

 

[Bussard Ramjet]

lol

LoL it is indeed.