China breaks records; made $500 Billion in debt in 1 month
Quote:
THIS week began with the release of a staggering number. In January, new debt issued in China rose to just over $500 billion, an all-time high. Not all of the "new" debt was actually new; some represented a move out of foreign-currency loans and into local-currency borrowing (in order to reduce foreign-currency risk). But the flow of red ink is not a mirage. China's government opened the credit taps early in 2016 in order to reduce the odds of a sharp economic slowdown. Private borrowing in China has grown rapidly and steadily since 2008, even as nominal output growth has slowed. As of 2014, according to an estimate by the McKinsey Global Institute, total debt in China stood at 282% of GDP. China is rapidly becoming one of the most indebted countries in the world.
The Chinese government does this on purpose - regularly - to keep their currency value lower, so that they're able to still lead the world market in trade & exports.
If their currency value goes up - so does the pricing of their products. The Chinese government has plenty of money, but that wealth goes to only very few.
It's called Currency manipulation. It's a purposeful devaluation. They basically need a cheaper currency to thrive.
The Chinese government does this on purpose - regularly - to keep their currency value lower, so that they're able to still lead the world market in trade & exports.
If their currency value goes up - so does the pricing of their products. The Chinese government has plenty of money, but that wealth goes to only very few.
It's called Currency manipulation. It's a purposeful devaluation. They basically need a cheaper currency to thrive.
So We should congrats them now? i dont understand economy at all
and yes to keep their currency low due to massive export benefits. altho they've try to go for a moreconsumer market-economy and slow down it's crazy growth lately
So We should congrats them now? i dont understand economy at all
He's right, the Chinese peg their currency. If the value of their currency goes up, it can create a trade deficit. If they keep it low, they gain a trade surplus more foreign companies will consider keeping trade operations in China.
Of course this can create problems in the long run.
How is huge debt in any way sustainable? Surely there's just going to be a huge crash in the future due to this huge amount of debt and it will cause havoc globally
The Chinese government does this on purpose - regularly - to keep their currency value lower, so that they're able to still lead the world market in trade & exports.
If their currency value goes up - so does the pricing of their products. The Chinese government has plenty of money, but that wealth goes to only very few.
It's called Currency manipulation. It's a purposeful devaluation. They basically need a cheaper currency to thrive.
God help me when my economics module of my business degree starts. This sounds so jibberish
i dont understand economy at all 
