China debt warning

Kieran · Post by **Kieran** » 25 Jun 2010, 00:23

http://www.telegraph.co.uk/finance/chin ... onomy.html

"Liu Jiayi, the head of China's National Audit Office said the financial crisis had left some Chinese provinces with serious debt problems.

"The scale is large, and the burden is quite heavy," he said, in an annual report to the Chinese government.

Chinese provinces are, in some cases, equivalent in size to major European countries and run with a degree of fiscal autonomy. The southern province of Guangdong, for example, has the same population size as Germany.

However, provincial budgets have been classified as state secrets until now and this is the first time that China has disclosed the level of local government debt..."

DominicJ · Post by **DominicJ** » 25 Jun 2010, 10:31

Japanese Zombie Banks would be a good primer for anyone interested.

Totally_Baffled · Post by **Totally_Baffled** » 25 Jun 2010, 23:18

If the chinese are up to their eyeballs in debt who the smeg has all the money ?

RenewableCandy · Post by **RenewableCandy** » 26 Jun 2010, 13:51

The banksters. But they're not telling.

madibe · Post by **madibe** » 27 Jun 2010, 00:05

Yes, who has all the money is a question I've been asking for a while... if the banksters have it then why are they in crisis?

Perhaps it has all gone the same way as biro's and singular socks...down a black hole to live a biroid / sockiform lifestyle...

Mean Mr Mustard · Post by **Mean Mr Mustard** » 27 Jun 2010, 00:21

Totally_Baffled wrote:If the chinese are up to their eyeballs in debt who the smeg has all the money ?

There was never any money.

Just a few trillions of obligations dressed up as money.

The global economy then started taking inventory of what it was using as money. And it began crossing things off the list. Subprime ABS? Nope, that's not money. BBB corporate bonds? Nope. High-grade corporates? Alas, no. Credit default swaps? Are you kidding me?

http://theautomaticearth.blogspot.com/2 ... ss-of.html

DominicJ · Post by **DominicJ** » 27 Jun 2010, 10:30

Who has the money?
Pension Funds.

Mean Mr Mustard · Post by **Mean Mr Mustard** » 27 Jun 2010, 10:34

DominicJ wrote:Who has the money?
Pension Funds.

Nah... Stoneleigh recently said pension funds had bought 'toxic waste and landfill'... Chasing yield and buying risk instead.

Andy Hunt · Post by **Andy Hunt** » 27 Jun 2010, 15:12

Until very recently, BP had all the money.

Catweazle · Post by **Catweazle** » 27 Jun 2010, 23:06

You could say that money is just a promise that someone in the future will do some work or produce something. Once so much money has been printed that there is no way the future generations can ever produce enough to equal it then it becomes worthless.

I could be wrong.

PaulS · Post by **PaulS** » 27 Jun 2010, 23:13

Dominic is right, Pension funds have it. They love state debt because it is ... safe
So quickly forget that you ever had a pension!

Mean Mr Mustard · Post by **Mean Mr Mustard** » 28 Jun 2010, 08:42

Catweazle wrote:You could say that money is just a promise that someone in the future will do some work or produce something. Once so much money has been printed that there is no way the future generations can ever produce enough to equal it then it becomes worthless.

I could be wrong.

Don't think you are... In fact, you're right on the money.

Kieran · Post by **Kieran** » 28 Jul 2010, 21:59

http://www.telegraph.co.uk/finance/chin ... s-IMF.html

"In a statement about its first public review of the Chinese economy for three years, the IMF praised China's adroit handling of the financial crisis. It said growth continued to be robust, at an estimated 10.5pc this year, and that inflation is benign.

However, the agency warned that China now faces the challenge of managing the after-effects of a stimulus package that included a record 9,600 billion yuan (£960bn) of loans from Chinese banks. The total was more than double the amount loaned in 2008.

The IMF has "highlighted the need for regulatory and supervisory vigilance to manage any deterioration in credit quality, and for increased transparency in lending to local government vehicles," said the notes to the Article IV consultation, which has not been released in full.

According to senior Chinese officials, Chinese banks are facing serious default risks on more than a fifth of the 7,700bn yuan they have lent to local governments across the country. Around 1,550bn yuan of loans are judged questionable by the China Banking Regulatory Commission, although not all of the loans are expected to go bad. "

Article continues...

SunnyJim · Post by **SunnyJim** » 28 Jul 2010, 23:43

I'm with MrMustard on this. There is no money. Never has been. Just a bunch of phoney promises.

However china's banks, (who believe in money) have been borrowing it of someone so who has the power to create Yuan? Does China have a central bank? Is their central bank beholding to the world bank?

Answer; Yes it has a central bank, the People Bank of China (PBoC). It would seem China is a member of the committee.
http://en.wikipedia.org/wiki/Basel_Comm ... upervision

So it looks like China's economy is also being hyped and choked by the basel agreements via their central bank, and that the provinces are in dept to the central bank, who control the creation of the money that doesn't really exist.

adeano · Post by **adeano** » 29 Jul 2010, 11:28

Totally_Baffled wrote:If the chinese are up to their eyeballs in debt who the smeg has all the money ?

Good point