Could China Be the Next Greece?

[Anonymous user]

i am saying that singapore is hugely dependent on china for a variety of economic reason. if china is impaceted then I who lives in Singapore and own a home here, will be impacted because Singapore property is like a casino.

I don't agree with that totally, its true Singapore economic prosperity is tied to the world economy which China makes up a large portion of. No country will escape mayhem if the market goes south and that's the truth. But I do not believe the market property market will fall more then 25% even in extreme cases unless war or some major financial breakdown happens.

We have a decent reserve for a small country which govt will use to soften the blow, anyway majority of the foreign buyers in property are surprisingly not from China at this moment which I wonder why.

 

[zombieland]

hahaha ... you are funny dude... False flag and $hit u talk ... u posted this same stuff in one of my earlier post ... keep on posting as if what you or anybody says would change my identity ....

Alas, I must add, there is one thing common between us.... I too love the movie

So chill ....

I don't think so, I haven't noticed him acting like that towards Pakistan, only towards China.

Looks like a classic "sleeper" account. He only signs in to say something bad about China, then goes back to his normal account to talk about other things.

I remember his name, because I love that movie "Zombieland".

 

[jdme]

Works well on the short run ... However wealth couldn't be created by printing money forever. Better way to improve the U.S. economy is investing more money in innovative technologies.

You must be joking, right! What nation even comes close to matching US in science and tech? R&D investment is very high in US.

 

[Oldman1]

China local government debt understated by $540 billion: Moody's - Yahoo! News

China local government debt understated by $540 billion: Moody's

* Moody's warns China banks credit outlook may turn negative

* Moody's says Beijing may ask banks to manage problem loans

BEIJING (Reuters) - China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses that could threaten their credit ratings, Moody's said on Tuesday.

Addressing the estimate by China's state auditor that its local governments have chalked up 10.7 trillion yuan of debt, Moody's said it found more potential loans after accounting for discrepencies in figures given by various Chinese authorities.

"The potential scale of the problem loans at Chinese banks may be closer to its stress case than its base case," Moody's said in a statement.

In view of that, the non-performing loan ratio for Chinese banks could be as high as 8-12 percent, compared with 5-8 percent in the base case and 10-18 percent in the stress case.

Unless China comes up with a "clear master plan" to clean up its pile of local government debt, the credit outlook for Chinese banks could turn negative, the ratings agency said.

In a bid to assuage investor worries about the potential souring of its massive local government debt, different Chinese authorities including the state auditor, the bank regulator and the central bank have tried to assess the situation.

But all three agencies have used different definitions and accounting methods to review the debt, resulting in a hodgepodge of official forecasts.

Moody's said it derived the additional 3.5 trillion yuan of debt after comparing the estimates of China's state auditor with that of the bank regulator's.

The ratings agency said the Chinese state auditor likely omitted the 3.5 trillion yuan of debt from its assessment because they were not considered as real claims on local governments.

"This indicates that these loans are most likely poorly documented and may pose the greatest risk of delinquency," said Yvonne Zhang, a Moody's analyst.

Moody's said it expects Beijing to "implement gradual discipline" over the stock of government debt, and that would involve the Chinese government leaving banks to manage a part of the problem loans on their own.

($1 = 6.463 Chinese yuan)

(Reporting by Koh Gui Qing; Additional reporting by Kim Coghill in SINGAPORE; Editing by Jacqueline Wong)

Wow by that much money!

 

[Kikki]

^^ China should be alright when the yuan is fully convertible and companies are able to repatriate the profits fully

 

[kawaraj]

* Moody's warns China banks credit outlook may turn negative

* Moody's says Beijing may ask banks to manage problem loans

BEIJING (Reuters) - China's local government debt burden may be 3.5 trillion yuan ($540 billion) larger than auditors estimated, putting banks on the hook for deeper losses that could threaten their credit ratings, Moody's said on Tuesday.

Addressing the estimate by China's state auditor that its local governments have chalked up 10.7 trillion yuan of debt, Moody's said it found more potential loans after accounting for discrepencies in figures given by various Chinese authorities.

well those agencies are jokes in the financial downturns several years ago. where are B.Stern, M.L., AIG, how do they rate the US considering this country is close to being broke?

and how much lies they make for Greek's debt rating in history to cheat people, they are not working on professional, they are working on agendas. if they all go broke, this world will be finanally better off.

 

[jdme]

well those agencies are jokes in the financial downturns several years ago. where are B.Stern, M.L., AIG, how do they rate the US considering this country is close to being broke?

and how much lies they make for Greek's debt rating in history to cheat people, they are not working on professional, they are working on agendas. if they all go broke, this world will be finanally better off.

You do understand the difference between Bear Stern, AIG and Moody, right?

 

[Dharmachakra]

Works well on the short run ... However wealth couldn't be created by printing money forever. Better way to improve the U.S. economy is investing more money in innovative technologies.

Your central bank and your finance minister will know the pain if US starts printing.

No one says US has to print forever. Its already the worlds largest economy and will remain the same for the next 2 decades atleast.

The important factor that many people are missing out here is, the so called US external debt is held in US dollar by the lending nations. I guess you guys should know what this means.... (If you donno the repecursions of holding the debt in its own currency, then google it )

So A chinese yuan trades at ~ 6.4 a dollar today....... and what happens when the dollar further looses its value by over printing? Yuan will most likely trade at parity with dollar........
And people who have knowledge in economics will know how it will benifit US when US-China trade is taken into consideration. And do you people think that US will invest in China when its dollar is on parity with Yuan?And you think that they will keep on importing stuff from china?
This puts a vital dent on nearly $2 trillion trade of china with US
Forget this external nuisance in the name of US dollar...... Lets look at how the chinese banks are performing...

China's local government debts may exceed the state auditors' estimates by a whopping $540 billion (3.5 trillion yuan), said Moody's Investors Service on Tuesday.

The ratings agency warned in a new report, Growing Size of Local Government Debt Burden Challenges Chinese Banks, that the credit outlook for China's banks may turn negative if China fails to come up with a clear master plan to deal with this issue.

It warned, "that the potential scale of the problem loans at Chinese banks may be closer to its stress case than its base case, according to an assessment that the rating agency conducted following the release of new data by China's National Audit Office (NAO)."

Another ratings agency, Standard & Poor's, said last month that up to 30 per cent of loans to Chinese local government bodies could potentially sour, accounting for the biggest source of banks' non-performing assets.

"We assume that the majority of loans to local governments are of good quality, but based on our assessment of the loan classifications and risk characteristics, as provided by the NAO and other Chinese agencies, we conclude that the banks' exposure to local government borrowers is greater than we anticipated," says Yvonne Zhang, a Moody's vice president and one of the authors of the report.

Of the approximately $1.6 trillion (RMB 10.7 trillion) of local government debt examined by the Chinese audit agency, $1.3 trillion (RMB 8.5 trillion) was funded by banks. However, Moody's has identified another potential 540 billion (RMB 3.5 trillion) of such loans that the Chinese auditors did not discuss in their report.

"When cross-examining the findings by the June 27 NAO report -- in conjunction with reports from Chinese banking regulators -- we find that the Chinese audit agency could be understating banks' exposures to local governments by as much as RMB 3.5 trillion," says Zhang.

Moody's said in its 27 June National Audit Office report, it found that a large number of poorly documented loans had not been taken into account, resulting in understating the bank's exposure to local government loans. "Since these loans to local governments are not covered by the NAO report, this means they are not considered by the audit agency as real claims on local governments."

Moody's said in a statement that about 8 per cent to 12 per cent of total loans extended were likely to be classed as non-performing, compared to 5 per cent to 8 per cent in the rating agency's base case, and 10 per cent to 18 per cent in its stress case, clearly hinting at the likelihood of all of these unaccounted loans falling in non-performing assets category.

Earlier in April, ratings agency Fitch had downgraded from 'stable' to 'negative' its outlook on China's AA- long-term, local-currency loans on the basis of the risk to the Chinese government, if it had to bail out the banks.

Commentators have warned that in the event of the collapse of Chinese property markets, several such loans could become irrecoverable.

Its not a big thing to bail out these banks by central bank of china if it has to,just like what US has done to its own banks.But this puts in a different perspective.

 

[Chinese-Dragon]

This puts a vital dent on nearly $2 trillion trade of china with US

What $2 trillion trade between US and China???

Secondly, they can't just devalue. The US is the biggest "importer" of goods in the world by far, they need a strong dollar to pay for those imports.

 

[Dharmachakra]

What $2 trillion trade between US and China???

Secondly, they can't just devalue. The US is the biggest "importer" of goods in the world by far, they need a strong dollar to pay for those imports.

You should also look from the other side side of the coin. If the dollar is not strong( lets says dollar value is less than Yuan)you know what happens? the imports will start nose diving.......And exports tends to increase.

If yuan cost more than dollar, why would people import costly but low quality items from china instead of making them at home?

A dollar devaluation will tilt pretty much the way how US trades with all its trading partners.

 

[jdme]

What $2 trillion trade between US and China???

Secondly, they can't just devalue. The US is the biggest "importer" of goods in the world by far, they need a strong dollar to pay for those imports.

Weak dollar actually makes US more competitive! On the other hand US PRINTS DOLLAR!

 

[Chinese-Dragon]

You should also look from the other side side of the coin. If the dollar is not strong( lets says dollar value is less than Yuan)you know what happens? the imports will start nose diving.......And exports tends to increase.

Where is the $2 trillion trade between US and China?

Weak dollar actually makes US more competitive! On the other hand US PRINTS DOLLAR!

It also makes imports more expensive, and increases inflation in the economy.

The US is the largest importer of goods in the world, why would they willingly make their imports more expensive? That would hurt them more than anyone else.

And there is no way that they can compete in terms of low-cost manufacturing with the developing world. No matter how much they devalue.

 

[jdme]

It also makes imports more expensive, and increases inflation in the economy.

The US is the largest importer of goods in the world, why would they willingly make their imports more expensive? That would hurt them the most.

There is no way that their manufacturing can compete on a low-cost basis with the developing world. No matter how much they devalue.

Ofcourse. I live there! 9,1% unemployment (unofficial number is higher), 14 trillion dollar debt, soaring health cost, unmanageable entitlement programs..Mighty dollar is under assault.

 

[below_freezing]

You should also look from the other side side of the coin. If the dollar is not strong( lets says dollar value is less than Yuan)you know what happens? the imports will start nose diving.......And exports tends to increase.

If yuan cost more than dollar, why would people import costly but low quality items from china instead of making them at home?

A dollar devaluation will tilt pretty much the way how US trades with all its trading partners.

It would cause a revolution in the US, the overthrow of the government due to hyperinflation and a civil war resulting in independence of Hawaii, California and Texas, and the reemergence of the Confederate States, breaking USA into possibly 5 pieces.

The US is the largest importer in the world. Currencies can be changed quickly but physical infrastructure for manufacturing cannot. If the dollar was to rise to the level of the RMB that'd take 20 years of 10% inflation or, alternatively, a one time 640% inflation. Once hyperinflation starts, it is very difficult to end as investors panic, flee the dollar and cause even more hyperinflation by dumping their now worthless USD onto the market. With that, prices (due to most goods being imports) skyrocket, the average American is unable to buy anything or feed their families though there's plentiful food, riots break out, the US army has to be called in to suppress them, and just 1 nervous soldier shooting a rioter will trigger a civil war that leads to the permanent destruction of the US.