Could China Be the Next Greece?

[Chinese-Dragon]

So the question is: Can China be the next Greece? You might want to put aside your nationalistic passion, put on the objectivity hat, and read the article more carefully. Pay extra attention to the debt issue.

The author already answered that:

All told, Avent estimates China's debt-to-GDP ratio is roughly 80%, which, if coupled with China's expected 5% and 9% over the next few years and fairly conservative spending, would put China back in the black in no time.

That's a lot different than the situation in Greece, where debt levels are equally high, but growth is nowhere in sight and lenders are pulling away.

There's also the fact that, unlike in the U.S. and in Greece, China is toting around some $3 trillion in foreign exchange reserves, which makes it easy to raise money in a flash when times get tough.

Firstly, you can't default on debt payments with $3 trillion in currency reserves.

Secondly, China is still growing at double-digit rates, unlike Greece or even the USA. We won't even need to dip into our currency reserves in the first place.

 

[gambit]

The author already answered that:



Firstly, you can't default on debt payments with $3 trillion in currency reserves.

Secondly, China is still growing at double-digit rates, unlike Greece or even the USA. So the money we pull in will be more than enough to cover any such issues.

The issue is not default on debts because even though I may have reserves to pay my debts, I still need to replenish that reserve somehow. China's dependency on exports for internal growth put that internal growth and that ability to replenish that reserve at risk.

And here it is again...

Here's Why China Can Never Escape Export Dependency

 

[Chinese-Dragon]

The issue is not default on debts because even though I may have reserves to pay my debts, I still need to replenish that reserve somehow. China's dependency on exports for internal growth put that internal growth and that ability to replenish that reserve at risk.

And here it is again...

Here's Why China Can Never Escape Export Dependency

That is hardly an issue, considering our fast economic growth, and our massive trade surplus.

Nobody increases their currency reserves at the rate that China does.

P.S. I've read that article before. People have been predicting negative things about the Chinese economy for decades, and they keep getting disappointed.

China is where it is right now, because we have been breaking all the traditional paradigms of Economic theory, and succeeding at every turn.

To the point where Western economists are even talking about a "Beijing consensus", of controlled state-capitalist growth, rather than the traditional Washington consenus.

 

[gambit]

That is hardly an issue, considering our fast economic growth, and our massive trade surplus.

Nobody increases their currency reserves at the rate that China does.

P.S. I've read that article before. People have been predicting negative things about the Chinese economy for decades, and they keep getting disappointed.

You mean like how people have been predicting the 'collapse' of the US via Chinese 'dumping' of US bonds? China's trade surplus is not the same thing as savings. A trade surplus depends on one thing: trade. And of course that mean export/import which also mean China is vulnerable.

 

[Jade]

For China to go bankrupt first it should not be in the position to pay its external debt; with $ 3 trillion in reserves, I don’t see this happening. This is clearly reflected in S&P and Moody rating for China. They rated China as ‘investment grade’. Second, its currency should become worthless, but RMB is very much valued. It is in fact being forced by the Chinese government not to appreciate so as to boost their exports

 

[Jade]

You mean like how people have been predicting the 'collapse' of the US via Chinese 'dumping' of US bonds? China's trade surplus is not the same thing as savings. A trade surplus depends on one thing: trade. And of course that mean export/import which also mean China is vulnerable.

Trade surplus is equal to the difference between savings and investments. Hence trade surplus, savings and investments are intertwined

 

[below_freezing]

Typical Chinese thug response when they found their arguments completely debunked so they have to resort to cheap racist/ethnic insults. Guess those multiple temporary suspensions of the thugs' accounts did not teach them much because of their thick skulls.

Why do you assume I am talking about you and not ARVN regime gangsters in general? I truly despise what they've done to Hong Kong, a great Chinese city that has become overrun with hardcore drug dealers. I'm not attacking Vietnamese. I'm not saying anything based on race or genetics. I'm specifically targeting the ARVN regime, its thugs and the associated Viet Tan. If you aren't this type of person why put yourself in that position?

How about learn some basic economics before talking about wild things like China = Greece?

 

[gambit]

Why do you assume I am talking about you and not ARVN regime gangsters in general? I truly despise what they've done to Hong Kong, a great Chinese city that has become overrun with hardcore drug dealers. I'm not attacking Vietnamese. I'm not saying anything based on race or genetics. I'm specifically targeting the ARVN regime, its thugs and the associated Viet Tan. If you aren't this type of person why put yourself in that position?

How about learn some basic economics before talking about wild things like China = Greece?

Then what relevance is the once ARVN has in this discussion if I am not the target of your racism? Be proud of what you are: a Chinese racist thug who waste no opportunity to express his contempt for the 'inferior' Asians.

 

[lem34]

You guys have to be kidding me comparing china to greece is a joke and not worthy of comment.

 

[below_freezing]

Then what relevance is the once ARVN has in this discussion if I am not the target of your racism? Be proud of what you are: a Chinese racist thug who waste no opportunity to express his contempt for the 'inferior' Asians.

The relevance of RVN to the Greek situation is numerous.

Economy of the Republic of Vietnam - Wikipedia, the free encyclopedia

In this period, the underground economy was booming, the budget deficit soared, hyperinflation afflicted the economy and the currency was repeatedly devalued, resulting in an economic depression. The warfare caused negative impact on economic growth, especially the large scale Tet Offensive in 1968.

South Vietnam ceased to exist a few years later. What about Greece?

 

[gambit]

The relevance of RVN to the Greek situation is numerous.

Economy of the Republic of Vietnam - Wikipedia, the free encyclopedia

In this period, the underground economy was booming, the budget deficit soared, hyperinflation afflicted the economy and the currency was repeatedly devalued, resulting in an economic depression. The warfare caused negative impact on economic growth, especially the large scale Tet Offensive in 1968.

South Vietnam ceased to exist a few years later. What about Greece?

You are straining your credibility with this line of feeble argument. South Viet Nam's wartime situation is utter incomparable to today's peacetime economic self induced problems. You make a convenient racist/ethnic insult because you cannot help it. A racist thug is what you are because that is how you are raised. Be proud of your upbringing. It bring honor to the Chinese people that someone is standing up for the 'superior' Chinese people.

 

[Chinese-Dragon]

Why do you assume I am talking about you and not ARVN regime gangsters in general? I truly despise what they've done to Hong Kong, a great Chinese city that has become overrun with hardcore drug dealers. I'm not attacking Vietnamese. I'm not saying anything based on race or genetics. I'm specifically targeting the ARVN regime, its thugs and the associated Viet Tan. If you aren't this type of person why put yourself in that position?

How about learn some basic economics before talking about wild things like China = Greece?

Don't worry, we can handle those criminals.

 

[mhb56]

How would you handle them?

 

[Chinese-Dragon]

How would you handle them?

Hong Kong already has one of the lowest crime rates on Earth. I wouldn't worry about it, local law enforcement is very effective.

 

[mhb56]

Of course, the size of Hong Kong speaks for itself.