Who are World's Top 10 Largest Creditor Nations?

[Han Patriot]

BY JOE MCDONALDAP Business Write
BEIJING
China's foreign currency reserves rose in May for a fourth month ahead of a possible U.S. interest rate hike that might put new pressure on Beijing's exchange rate controls.

The reserves, the world's biggest, increased $24 billion to $3.05 trillion, according to government data released Wednesday.

A sharp decline last year prompted Beijing to tighten controls on the outflow of money from the world's second-largest economy.

The Chinese controls could face a new test if the U.S. Federal Reserve decides at a meeting next week to raise interest rates. That would draw money out of China in search of higher returns, which could require Beijing to raise its own interest rates or further tighten controls.

The Fed has signaled it expects to raise rates a total of three times this year to ensure tighter labor markets do not trigger inflation pressures.


The central bank spent reserves to shore up the yuan's exchange rate after expectations that the Chinese currency would decline prompted investors to move money out of the country starting in 2015.

The reserves declined from a peak of $3.99 trillion in June 2014 to just under $3 trillion late last year. Late last year, the net outflow was tens of billions of dollars a month, which prompted Beijing to step up scrutiny of proposed foreign investments and ban some activities by individual investors.

"Though the large capital outflow appears to have eased notably, the authorities have no intention to loosen capital control yet," said Citigroup economists Li-Gang Liu and Xiaowen Jin in a report.

In its latest tactic, the foreign currency regulator announced Friday that Chinese banks must report all overseas automatic teller or credit card transactions above 1,000 yuan ($150) by their customers beginning Sept. 1.

The tighter controls have temporarily set back Beijing's gradual moves to encourage more use of the yuan abroad for trade.

The People's Bank of China bases the yuan's state-set exchange rate on a basket of currencies that is believed to be dominated by the dollar. That required Beijing to intervene to keep the yuan in line with the dollar as the greenback rose over the past two years.

The latest controls appear to have locked the yuan to the dollar, possibly to send a clear signal it won't fall further.

___

Online:

People's Bank of China (in Chinese): www.pbc.gov.cn

http://www.miamiherald.com/news/business/article154774334.html

The exchange rates are manipulated by the FED, they are using speculators to bombard China. The intention is stop the globalization of Yuan from threatening dollar hegemony. OBOR is a good move, we are bypassing dollar based institutions and financing in Yuan for all those projects.

 

[Jlaw]

General Motor, AIG, Fannie Mae, Freddie Mac ... US government is "liable" to protect corporations/banks. The only difference is that these are not even state-owned corporations, they are privately owned.

Who says SOE are about profit maximization? They own monopolistic assets (invaluable intangible rights, critical physical assets) and carry civil functions, in many market segments (e.g. power grid or other critical infrastructure) they don't need to compete at all. Good news that SOE are capable of making some but not huge profits after paying all costs including financial costs to banks, cos that's exactly what they are supposed to do. SOE own invaluable intangible rights and gigantic amount of physical assets, they can deleverage if they chose to.

SOE are fine, so are the banks. Because China is a low consumption high savings country, banks are flooded by deposits, in fact bank LTD ratio at end 2016 was only 70.1%, where's the problem? In plain language, it's the ultra-high Chinese household savings that are financing SOE investment mostly in infrastructure, either indirectly through bank credits or directly through bond/equity instruments.

Sources:

• By 30 Dec 2016, bank deposits balance at ¥150.59 trillion (YOY increase ¥14.88 trillion!), credits balance at ¥106.6 trillion (YOY increase ¥12.65 trillion), credit-deposit ratio (or loan-to-deposit ratio, LTD) at end 2016 was 70.1%.
• http://finance.sina.com.cn/roll/2017-01-20/doc-ifxzunxf1558065.shtml

It's exactly the opposite, they can print their way out of deficit but not out of debt, in fact gets even deeper into debt with printing.

The decision has had no impact on Chinese equities nor currency, so in my opinion:

"Moody's? We don't need no stinkin' Moody's!"
Brendan Ahern, chief investment officer of KraneShares, sent out a fun note to his list-serve subscribers on Thursday about credit outlook. A spin on Blazing Saddles.

"Who cares? Not the Chinese. And not most of the close China watchers, barring those perennial bears looking for the credit bubble to burst since around 2010."
Kenneth Rapoza, Contributor-Forbes​

On a radio talk show , a specialist on China said the country has highest savings rate in the world. I do not have link but can you confirm if that's accurate ?

The exchange rates are manipulated by the FED, they are using speculators to bombard China. The intention is stop the globalization of Yuan from threatening dollar hegemony. OBOR is a good move, we are bypassing dollar based institutions and financing in Yuan for all those projects.

US government have no saying if their interest rates go up or down . federal reserve is privately owned!

 

[TaiShang]

On a radio talk show , a specialist on China said the country has highest savings rate in the world. I do not have link but can you confirm if that's accurate ?

In gross national savings, China tops the world. In %, it is one of the top three. Unmanned Tomahawk superpower and shining perennial superpower are not at least at the top ten.

***

Top 10 saving countries in the world

2016-05-26

China is the world's third best saving country. Its gross national saving, a measure that accounts for both private and public savings, was 47.4 percent of its GDP in 2015, according to the data from the International Monetary Fund (IMF).

Based on the data, China saves the most money in absolute terms, an estimated $9.25 trillion.

The high gross national saving countries are the oil producing countries in the Middle East and emerging countries in Asia.

The following list shows the 10 countries with the highest gross national saving in the world as a percentage of GDP.

10
Algeria
Gross national saving: 31.4 percent of GDP

9
Indonesia
Gross national saving: 31.7 percent of GDP

8
Turkmenistan
Gross national saving: 32.1 percent of GDP

7
Nepal
Gross national saving: 33.9 percent of GDP

6
Norway
Gross national saving: 35.2 percent of GDP

5
Botswana
Gross national saving: 35.6 percent of GDP

4
Republic of Korea
Gross national saving: 35.7 percent of GDP

3
China
Gross national saving: 47.4 percent of GDP

2
Singapore
Gross national saving: 47.4 percent of GDP

1
Qatar
Gross national saving: 51.4 percent of GDP

http://chuansong.me/n/653901651136

 

[ashok321]

Oops!
Nepal is better than India.

 

[AndrewJin]

Oops!
Nepal is better than India.

RRSers have PPP money and Boasting coins....

 

[JSCh]

PRESS RELEASE
ECB completes foreign reserves investment in Chinese renminbi equivalent to €500 million
13 June 2017

• Investment reflects increased role of Chinese renminbi as global currency
• Overall size of ECB’s foreign reserves unchanged

The European Central Bank (ECB) completed an investment equivalent to €500 million of the ECB’s foreign reserves in Chinese renminbi (CNY) during the first half of 2017, implementing a decision taken by the ECB Governing Council on 20 January 2017.

The use of CNY as a global international currency has increased in recent years. The International Monetary Fund (IMF) determined the renminbi to be a freely usable currency in its five-yearly review of the Special Drawing Right (SDR) Currency Basket in 2015. Since October 2016, the IMF has approved its inclusion in the SDR basket as the fifth currency, alongside the US dollar, the euro, the Japanese yen and the British pound.

The ECB’s investment also reflects the importance of China as one of the euro area’s largest trading partners.

The investment in CNY was made by changing the current composition of the ECB’s foreign reserves. The ECB sold a small portion of its US dollar holdings, which remain the largest portfolio, leaving the overall size of the ECB’s foreign reserves unchanged.

The ECB’s foreign reserves now comprise US dollars, Japanese yen, Chinese renminbi, gold and SDRs.

https://www.ecb.europa.eu/press/pr/date/2017/html/ecb.pr170613.en.html

 

[JSCh]

China to launch 2nd phase of cross-border interbank payment system for RMB
Source: Xinhua| 2017-06-21 19:31:21|Editor: Mengjie



SHANGHAI, June 21 (Xinhua) -- The second phase of the Cross-border Interbank Payment System (CIPS) will be launched in Shanghai to promote the global use of the Chinese currency and the Belt and Road Initiative.

The upcoming launch of CIPS Phase II in Shanghai will further boost the building of the international financial center there, China's central bank governor Zhou Xiaochuan said at the two-day Lujiazui Forum 2017 which ended Wednesday. Zhou did not provide further information.

The move came about two years after the announcement of the first phase of the CIPS, a payment and settlement system created by the People's Bank of China (PBOC) to provide safe, easy, and efficient settlement services for global financial institutions in doing RMB cross-border and offshore business.

In October 2015, the central bank announced the official launch of CIPS Phase I, which has greatly increased the efficiency of cross-border clearing and marked major progress in establishing a modern payment system that combines domestic and international RMB payment.

With the expansion of covered areas and the increase of business volume, CIPS has become more prominent as the main channel of cross-border RMB payment, said Zhang Xin with China International Payment Service Corp.

By the end of May, CIPS direct participants in terms of high value payment reached 28 and its indirect participants stood at 574, covering 85 countries and regions.

With the theme "Financial Reform and Steady Development from a Global Perspective," the Lujiazui Forum 2017 drew many heavyweight attendees from home and abroad, including central bank governors, financial regulators and economists.

 

[AndrewJin]

China to launch 2nd phase of cross-border interbank payment system for RMB
Source: Xinhua| 2017-06-21 19:31:21|Editor: Mengjie



SHANGHAI, June 21 (Xinhua) -- The second phase of the Cross-border Interbank Payment System (CIPS) will be launched in Shanghai to promote the global use of the Chinese currency and the Belt and Road Initiative.

The upcoming launch of CIPS Phase II in Shanghai will further boost the building of the international financial center there, China's central bank governor Zhou Xiaochuan said at the two-day Lujiazui Forum 2017 which ended Wednesday. Zhou did not provide further information.

The move came about two years after the announcement of the first phase of the CIPS, a payment and settlement system created by the People's Bank of China (PBOC) to provide safe, easy, and efficient settlement services for global financial institutions in doing RMB cross-border and offshore business.

In October 2015, the central bank announced the official launch of CIPS Phase I, which has greatly increased the efficiency of cross-border clearing and marked major progress in establishing a modern payment system that combines domestic and international RMB payment.

With the expansion of covered areas and the increase of business volume, CIPS has become more prominent as the main channel of cross-border RMB payment, said Zhang Xin with China International Payment Service Corp.

By the end of May, CIPS direct participants in terms of high value payment reached 28 and its indirect participants stood at 574, covering 85 countries and regions.

With the theme "Financial Reform and Steady Development from a Global Perspective," the Lujiazui Forum 2017 drew many heavyweight attendees from home and abroad, including central bank governors, financial regulators and economists.

Step by step

 

[Super Falcon]

Is this list for who give credit to other countries as Lian etc

Or this is the list of countries which takes credit

 

[Shotgunner51]

Is this list for who give credit to other countries as Lian etc

Or this is the list of countries which takes credit

Give credit. See these links for further reading:

http://www.investopedia.com/terms/c/creditor_nation.asp
https://www.merriam-webster.com/dictionary/creditor nation
http://dictionary.cambridge.org/us/dictionary/english/creditor-nation​

Latest news on the topic:

Business News | Thu May 25, 2017 | 8:20pm EDT
Reuters

Japan's net external assets rose to their second-highest amount on record at end-2016 driven by rising mergers and acquisitions overseas by Japanese firms and portfolio investment, the Ministry of Finance (MOF) said on Friday.

The net value of assets held by the government, businesses and individuals stood at 349 trillion yen ($3.12 trillion) - just behind 2014's record 363 trillion yen. It meant Japan remained the biggest creditor nation for the 26th straight year, the MOF said.

As at end-2015, Japan's net external assets were at 339 trillion yen.

Japan's net external assets were about 1.7 times those held by China, the world's No.2 creditor nation with 210 trillion yen in net assets at the end of last year, followed by Germany, the ministry said.

Japan's gross external assets rose 5 percent to a record 998 trillion yen as increase in Japanese direct investment overseas and foreign bond investment more than offset drops in the appraised yen value of foreign currency-denominated assets.

Japan's direct investment in the United States reached a record 53 trillion yen at end-2016, up 2.7 trillion yen from a year ago, making it the most popular destination that accounts for a third of overall Japanese direct investment overseas.

Overall external debt grew 6.2 percent to a record 649 trillion yen due to increased foreign direct investment and acquisitions of Japanese bonds by foreign investors.

http://www.reuters.com/article/us-japan-economy-assets-idUSKBN18M007​

 

[Han Patriot]

Give credit. See these links for further reading:

http://www.investopedia.com/terms/c/creditor_nation.asp
https://www.merriam-webster.com/dictionary/creditor nation
http://dictionary.cambridge.org/us/dictionary/english/creditor-nation​

Latest news on the topic:

Business News | Thu May 25, 2017 | 8:20pm EDT
Reuters

Japan's net external assets rose to their second-highest amount on record at end-2016 driven by rising mergers and acquisitions overseas by Japanese firms and portfolio investment, the Ministry of Finance (MOF) said on Friday.

The net value of assets held by the government, businesses and individuals stood at 349 trillion yen ($3.12 trillion) - just behind 2014's record 363 trillion yen. It meant Japan remained the biggest creditor nation for the 26th straight year, the MOF said.

As at end-2015, Japan's net external assets were at 339 trillion yen.

Japan's net external assets were about 1.7 times those held by China, the world's No.2 creditor nation with 210 trillion yen in net assets at the end of last year, followed by Germany, the ministry said.

Japan's gross external assets rose 5 percent to a record 998 trillion yen as increase in Japanese direct investment overseas and foreign bond investment more than offset drops in the appraised yen value of foreign currency-denominated assets.

Japan's direct investment in the United States reached a record 53 trillion yen at end-2016, up 2.7 trillion yen from a year ago, making it the most popular destination that accounts for a third of overall Japanese direct investment overseas.

Overall external debt grew 6.2 percent to a record 649 trillion yen due to increased foreign direct investment and acquisitions of Japanese bonds by foreign investors.

http://www.reuters.com/article/us-japan-economy-assets-idUSKBN18M007​

Does these net external asset include Chinese foreign reserves?

 

[Shotgunner51]

Does these net external asset include Chinese foreign reserves?

Yes forex reserves is part of the equation:

• Forex reserves (FXR) is one part of a nation's total external asset. In China's case, FXR constitutes about half of total. Japan has about 14% of total asset in FXR, Germany 2%.
  
• After deducting a nation's total external liabilities, get the net value. If net is positive aka more asset than liabilities, then creditor, otherwise a debtor.

Use an individual like ourselves as an example, cash (a claim on issuer) is just one part of our total asset. You may have equities (private, or publicly traded), loans to others, bonds, real assets (houses), gold etc., all adding up to your total asset. Then after deducting your total liabilities e.g. your outstanding loans to banks or anyone, you know how much net asset you owns at this very moment.

 

[Han Patriot]

Yes forex reserves is part of the equation:

• Forex reserves (FXR) is one part of a nation's total external asset. In China's case, FXR constitutes about half of total. Japan has about 14% of total asset in FXR, Germany 2%.
  
• After deducting a nation's total external liabilities, get the net value. If net is positive aka more asset than liabilities, then creditor, otherwise a debtor.

Use an individual like ourselves as an example, cash (a claim on issuer) is just one part of our total asset. You may have equities (private, or publicly traded), loans to others, bonds, real assets (houses), gold etc., all adding up to your total asset. Then after deducting your total liabilities e.g. your outstanding loans to banks or anyone, you know how much net asset you owns at this very moment.

OKOK, so this is actually a more accurate measurement of external holdings than just forex reserve minus foreign debt. This includes private holdings as well. Wow, India is -300bil, it's worse than the reserve minus debt. This means once foreigners take away the dollars they are in deep shit. No wonder China can finance so much, we have the cash babe.

 

[Shotgunner51]

OKOK, so this is actually a more accurate measurement of external holdings than just forex reserve minus foreign debt. This includes private holdings as well.

Absolutely. The IMF term for net external asset is IIP, or Net IIP, and has developed a manual for it.

http://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm​

There are three credit hubs with positive IIP: GCC, East Asia (incl SG), Germany-Nordic states. Japan is world's largest, though if denominated in GDP, Hong Kong is at staggering +368%. China Mainland only became a creditor in recent decade, now world's 2nd largest, at +16% of GDP, will climb further per current BoP trajectory.

https://defence.pk/pdf/threads/who-...t-creditor-nations.455610/page-5#post-9465055​

Most nations have negative IIP for whatever reasons, say over-spending (hence high GDP) or lack of international competitiveness (say states with weak industries and low natural resources). The EU has stringent measures on members states with IIP below -60% of GDP, typical example is PIIGS. Globally speaking, some regions are below -30% of GDP, say Latin America, HIPC in Sub-Saharan Africa, etc. United States, largest debtor nation in absolute term, is -45% at the moment.

 

[Han Patriot]

Absolutely. The IMF term for net external asset is IIP, or Net IIP, and has developed a manual for it.

http://www.imf.org/external/pubs/ft/bop/2007/bopman6.htm​

There are three credit hubs with positive IIP: GCC, East Asia (incl SG), Germany-Nordic states. Japan is world's largest, though if denominated in GDP, Hong Kong is at staggering +368%. China Mainland only became a creditor in recent decade, now world's 2nd largest, at +16% of GDP, will climb further per current BoP trajectory.

https://defence.pk/pdf/threads/who-...t-creditor-nations.455610/page-5#post-9465055​

Most nations have negative IIP for whatever reasons, say over-spending (hence high GDP) or lack of international competitiveness (say states with weak industries and low natural resources). The EU has stringent measures on members states with IIP below -60% of GDP, typical example is PIIGS. Globally speaking, some regions are below -30% of GDP, say Latin America, HIPC in Sub-Saharan Africa, etc. United States, largest debtor nation in absolute term, is -45% at the moment.

Well, US don't really need to care since they are the money printers. We must use these dollars to build up the country, there is still alot of work to be done on infrastructure, and by that I mean wastewater plants, water recycling plants, waste incinerators, there is a lot of environmental infrastructure which needs to be built.