China selling yuan bond to foreign government to raise cash

[Korean]

BOK to buy yuan bonds - Globaltimes.cn

BOK to buy yuan bonds
Global Times | 2012-7-3 0:50:07
By Song Shengxia

China has approved the Bank of Korea (BOK), South Korea's central bank, to buy Chinese bonds worth up to 20 billion yuan ($3 billion) through interbank bond market and the purchases have already started, a BOK official said Monday.

"Our bank has got approval from the Chinese government to buy yuan-denominated bonds in China through the interbank bond market. The limit of such bonds is 20 billion yuan or $3 billion," an official at BOK who wished to be anonymous told the Global Times over the phone Monday.

The bank has already started making the purchases and will do so "slowly and continuously" given the large sum involved, the official said.

China selling debt to foreign government to fund itself, the day came a lot quicker than expected.

 

[danger007]

^^^^^^^^ you will be fired buddy.....

 

[DF-41 ICBM]

BOK to buy yuan bonds - Globaltimes.cn



China selling debt to foreign government to fund itself, the day came a lot quicker than expected.

we are trying to internationalize our currency.
the way to do that is to sell yuan denominated financial products to foreign investors, especially central banks.
you need a deep and liquid bond market to have a reserve currency, we are expanding our bond market size from corporate debt, junk bonds, government bonds, financial bonds, etc.

japan, china and south korea are holding eachothers bonds.
our budget deficit is close to 1%.

considering you are a retarded indian, i wouldn't expect you to understand these things.

one of the biggest problems is our bond market is too small for foreign investors to hold yuan as they need to invest those yuan somewhere and usually governmet bonds are the preferred option as they are known as risk free.
but since our government runs tiny budget deficits(close to 1%), our government bond market size is barely expanding. so the government bond market size is small and not liquid.

by selling more government bonds directly to other central banks, we are making sure other central banks hold yuan as reserves(in the form of bonds).

 

[Korean]

we are trying to internationalize our currency.

This is a wrong way to do it then.

If China's goal is to internationalize yuan, then it should try to export yuan by buying yuan-denominated bonds issued by foreign governments(Yuan moves out of China), not issuing yuan-denominated debt to foreign government.(Yuan moves into China)

 

[DF-41 ICBM]

rofl...what u have written is just copied from the CCPs hand book..nothing new u ve posted...and before u call a Korean as retarded Indian, u better call urself an unwanted pig of Japanese agreesion..stop ur craps and BS non-sense!!

i wouldn't expect an indian to understand how economics works since your entire economy is a debt based ponzi scheme.
learn about bond markets and reserve currencies and you will understand.

 

[DF-41 ICBM]

This is a wrong way to do it then.

If China's goal is to internationalize yuan, then it should try to export yuan by buying yuan-denominated bonds issued by foreign governments(Yuan moves out of China), not issuing yuan-denominated debt to foreign government.(Yuan moves into China)

go tell that to the PBOC and MOC, since you know more than them.

buying yuan bonds increases the amount of yuan you hold.
when we buy US treasury bonds, we increase the dollars we hold.

by selling yuan denominated financial products and hoping foreigners will hold those yuan denominated products, we are exporting our printed yuan out of china(thus decreasing inflationary pressures).

foreign investors earn yuan through business with china and invest those earned yuan into yuan denominted financial products.
the more yuan held overseas, the more it becomes a reserve currency as foreigners are willing to hold our currency.

usually a reserve currency is when major central banks are willing to hold yuan denominated financial products.
it shows confidence in our currency and those financial products.

 

[JohnyD]

i wouldn't expect an indian to understand how economics works since your entire economy is a debt based ponzi scheme.
learn about bond markets and reserve currencies and you will understand.

we dont need to understand the economy from a country who have made the so called wealth by enslaving their people in their junk yards and spoiled the climate....the foundation of ur economy is so weak that it can crash like a play cards once the blue colour slaves in ur junk yard start demanding their due rights....ur commies land ve no future than the division into multiple states!

 

[peep]

i wouldn't expect an indian to understand how economics works since your entire economy is a debt based ponzi scheme.
learn about bond markets and reserve currencies and you will understand.

HAHA.. look a big mouth chinese is trying to be over smart.. when it is clear that u urself don't have any idea about the theory of "internationalize yuan" .. do u even know wtf internationalizing and a fully convertible currency means ?

Actually many ppl being HIGH IQ idiots is not their own making but CPC peddled BS is to blame ..

 

[DF-41 ICBM]

HAHA.. look a big mouth chinese is trying to be over smart.. when it is clear that u urself don't have any idea about the theory of "internationalize yuan" .. do u even know wtf internationalizing and a fully convertible currency means ?

Actually many ppl being HIGH IQ idiots is not their own making but CPC peddled BS is to blame ..

the yuan is fully convertible under the current account and partially convertible under the capital account(10 out of 40 items is fully convertible).

 

[Korean]

buying yuan bonds increases the amount of yuan you hold.
when we buy US treasury bonds, we increase the dollars we hold.

No, you got it backwards. China buys US Treasury Bonds to get rid of excessive dollar bills it has circulating in China in order to keep the exchange rate steady. If China doesn't, then the Yuan value shoots up and China's export industry collapses. So by buying US bonds, China decreases the amount of US dollar notes it hold and keeps the value of dollar steady(Too much dollar bill in circulation = lower dollar value = higher yuan value).

By China selling its yuan denominated bonds to Korea, Korea's holding of Yuan notes decrease, and the Yuan notes flow back to China. This is Korea's way of getting rid of excess yuan it holds from the $50 billion annual trade surplus from China.

 

[SinoChallenger]

Good. Now we sell Koreans our debt instruments so they can fund our military program.

 

[kawaraj]

well I would say it's a nice way to gauge control of overseas Yuan. It also provide foreign Yuan holders a channel to invest their Yuan assets. Japanese are also potential buyer of these bond and Chinese equity market.

Korean you need some economic education. You interpretation is OMG and stop spamming the forum with nonsense and leave the forum some clean space.

 

[sweetgrape]

I am a passer! just to see "korean" idiot and some indian idiots summon to discuss their daydream that china will collapse!!
And by the way, advise to "korean" idiot, don't make long prediction, indian life expectancy is short!!
And you "Korean" idiot, could you tell us what make you escape from SK to USA? Because of military service, afraid of NK?

 

[beijingwalker]

S Korea to buy Chinese bonds worth $3bn

Beijing—South Korea’s central bank can buy up to 20 billion yuan ($3.2 billion) worth of Chinese government bonds under a deal with Beijing and has started making these purchases, the official Xinhua news agency said on Sunday.

It is the first time the size of South Korea’s possible purchases of Chinese government bonds has been made public. A Bank of Korea official told Reuters in April the bank can buy over $300 million worth of Chinese bonds, but declined to elaborate.

Beijing wants to get central banks across the world to buy assets denominated in yuan as part of efforts to internationalise the currency and one day rival the dollar as a reserve currency.

Xinhua did not say how many Chinese government bonds the South Korean central bank has bought, only saying it has been buying in the over-the-counter market from late April, after getting the go-ahead from Beijing in January.

China also has a deal with Japan whereby Tokyo can buy 65 billion yuan in Chinese government debt over time, Japanese Finance Minister Jun Azumi said in March, without offering details.

Chinese debt purchases by Japan and South Korea are also part of a deal between the three nations to raise mutual bond investments and mitigate choppy capital flows during the financial market turbulence, a South Korean official said in May. The official said Japan is considering buying South Korean bonds, while China has already been an active buyer of South Korean bonds in recent years.

 

[Boson]

China's dollar debt is also rising:

China's external debt highest since 1985 |Markets |chinadaily.com.cn

China's external debt crosses $751 billion - Times Of India