US gives currency to China, government companies can be defaulter

US gives currency to China, government companies can be defaulter

The war between the US and China has also sparked a currency war under the patronage of the trade war. In comparison to the dollar, where China's Yuan and India are going through a period of currency weakness, including rupee, the effect of trade war has also resulted in a sharp fall in China's foreign exchange reserves.

The war between the US and China has also sparked a currency war under the patronage of the trade war. In comparison to the dollar, where China's Yuan and India are going through a period of currency weakness, including rupee, the effect of trade war has also resulted in a sharp fall in China's foreign exchange reserves.

According to figures released by the Chinese National Forex Management Bureau on October 7, China's foreign exchange reserves reached $ 30 trillion 87 billion by the end of September, which was $ 22.7 billion less than the end of August. In this way, China's foreign exchange reserves declined by 0.7 percent in one month.

According to the figures, China's foreign exchange reserves had fallen by $ 23 billion to $ 3.087 trillion in September. China's reserves in August was 3.105 trillion dollars. At the beginning of the tenure of President Donald Trump in the US, China's reserves were at $ 4 trillion.

China has the world's largest dollar reserve

In fact, China is America's largest trading partner, and America-China trade has been in favor of China for more than a decade. That is, the US has to take big business losses in China from business. Generally speaking, China is selling more of its product to America than it is in the United States and it is gathering the world's largest dollar reserve.

Will stand at the mouth of serious economic crisis

Economic analysts claim that China still has $ 3 trillion in reserve and this reserve will be able to save it from the trade war in the current trade war. However, the possibility of this is not being denied that if the trade war continues, then the Chinese reserve reserves of China reserves will soon be neutralized in the international trade and it will stand at the mouth of a serious economic crisis. .

China's economy is capable of countering external risks

Although the threat to China's currency reserves, the National Foreign Exchange Management Bureau's spokeswoman Wang Hunting denied and claimed that China's foreign exchange market is steadily stable in September. The main trading activity of the market is rational and well-organized. The dollar index in the international financial market is equal to the end of August. The bond prices of major countries declined slightly, and foreign exchange reserves were slightly lower. According to this spokesman, although there will be great uncertainty in the external environment, but China's economy is capable of countering external risks and China's foreign exchange reserves will remain stable.

China's government companies may be defaulter

It is worth mentioning that the trade war along with the growth rate in China is also declining. There is a tough challenge against China's banks. According to an estimate, one-third of China's economy is in debt to China's banks. At the same time, the debt of Chinese government banks is more than the central bank's fixed limit and these loans are out of control of the central bank due to the payment to government companies. Economic thinkers believe that if China's economic growth rate is consistently weak or rising interest rates in the US, the interest rates can be increased sharply to prevent global investors in China, a large number of Chinese government companies Can be defaulter.

So fear is China

According to a report from the Wall Street Journal, the rich section of China is afraid of the current trade war. According to the report, this class is giving preference to investments in US Dollar and US Treasury. It is worth mentioning that 21 lakh families in China are in this category, they have assets worth $ 2 trillion in stocks, bonds and real estate worth 4 trillion dollars. Therefore, China's central bank is also afraid that if it works to support Yuan against the dollar, then this class can withdraw its investment from China to other economies. So, the current situation of the trade war is giving relief to China due to foreign exchange reserves, but if the situation prevails, then Donald Trump, China's foreign currency reserves, will be in danger of ending the trade war in China.

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