1/
The puzzle continues into its fifth month. In August the dollar weakened again, driving up the value of China’s reserves by $15-20 billion. In addition the country ran a trade surplus of nearly $60 billion, and yet reported reserves rose by...
scmp.com/economy/china-…
The puzzle continues into its fifth month. In August the dollar weakened again, driving up the value of China’s reserves by $15-20 billion. In addition the country ran a trade surplus of nearly $60 billion, and yet reported reserves rose by...
scmp.com/economy/china-…
2/
only $10.2 billion, which is less than what we might have expected just from the valuation changes, and means that other net outflows exceeded the trade surplus.
Where did these outflows go and in what form? One of my clients told me that foreign bank loans are being...
only $10.2 billion, which is less than what we might have expected just from the valuation changes, and means that other net outflows exceeded the trade surplus.
Where did these outflows go and in what form? One of my clients told me that foreign bank loans are being...
3/
repaid. They may also be partly reflected in a slightly smaller EU surplus, but it seems to me that the main offset for the surging Chinese surplus is the US deficit, as @Brad_Setser argues in one of his tweets (and from which I stole this graph). China many be recycling...
repaid. They may also be partly reflected in a slightly smaller EU surplus, but it seems to me that the main offset for the surging Chinese surplus is the US deficit, as @Brad_Setser argues in one of his tweets (and from which I stole this graph). China many be recycling...
4/
some of its trade surplus into euros, but I’d guess that most of it is recycled into dollars, although it isn’t easy to see how this recycling is occurring.
Brad has wondered if some of this isn’t being diverted into some sort of “hidden” reserves, and I’ve...
some of its trade surplus into euros, but I’d guess that most of it is recycled into dollars, although it isn’t easy to see how this recycling is occurring.
Brad has wondered if some of this isn’t being diverted into some sort of “hidden” reserves, and I’ve...
5/
suspected since 2017 that this may be the case, but I don’t know for sure. My students and I have been working for three weeks to try to map the BoP flows, but so far we still don’t understand them.
suspected since 2017 that this may be the case, but I don’t know for sure. My students and I have been working for three weeks to try to map the BoP flows, but so far we still don’t understand them.
