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 Yuan Oil Futures to Start Trading.
Bear
 Posted: Feb 12 2018, 05:14 AM
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China Ends 25-Year Wait as Yuan Oil Futures to Start Trading.

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After a wait of about a quarter of a century, the world’s biggest oil buyer is finally getting its own crude-futures contract.

In a challenge to the world’s dollar-denominated oil benchmarks Brent and West Texas Intermediate, China will list local-currency crude futures in Shanghai on March 26, according to the nation’s securities regulator. The start of trading, open to foreigners, will mark the end of years of delays and setbacks since China’s first attempt at a domestic contract in 1993.

If the futures are embraced by overseas investors and become a benchmark for global oil transactions, China’s hoping the yuan could challenge the dominance of the greenback in international trade. Still, skeptics say that won’t happen as long as the currency is controlled by the central government, and while international traders may agree to settle contracts converted into yuan, they’ll continue to price the oil in dollars.

.............

China surpassed the U.S. as the world’s biggest oil importer last year, buying about 8.43 million barrels a day to feed demand from government-run as well as independent refiners. The nation has also been hoarding millions of barrels for its Strategic Petroleum Reserve. Rather than buying how much ever crude they want, private companies have to adhere to government-issued quotas for their purchases. And this year such allocations expanded.


https://www.bloomberg.com/news/articles/2018-02-09/china-ends-25-year-wait-as-yuan-oil-futures-set-to-start-trading

This will put the US dollar under further stress - The US owes China more than $1 trillion.




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scepo
 Posted: Feb 12 2018, 07:10 AM
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China's Debt Bomb Just Keeps Getting Bigger



Dec 15, 2017 @ 04:27 AM 9,913




Douglas Bulloch , Contributor
I write about the political economy of China and its major industries
Opinions expressed by Forbes Contributors are their own.



Amid the ceremony of the 19th Party Congress in October, while conversations switched between which loyal acolyte is on the way up, and which diminished reformer might just hang on, two rather striking pieces of research appeared that exposed the crumbling foundations of China's economic miracle. Both of them provide strong reasons to doubt not only China's long prophesied rise to regional, and even global, pre-eminence, but also much of the "China rising" narrative that has accompanied the last decade or so.
First Victor Shih, associate professor of political economy at UC, San Diego -- who has been warning since at least 2009 that China's debt problem is far worse than people think -- published a report with the Mercator Institute for China Studies that paints an ugly picture of rising liabilities and de-facto insolvencies. Shih places Total Non-Financial Credit in China at about 328% of GDP, significantly higher than many other observers.
The IMF for example, which keeps warning of the perils of debt, estimates China's total debt at 230% of GDP, while remarking on the rapidity of its rise in recent years and forecasting that it will breach 300% by 2022. The difference between the two figures is striking, but part of a familiar pattern for China stats.

The most widely quoted figure for Total Debt is nearer 260% which has the advantage of official recognition, being the figure published by the National Development and Reform Commission (who produce and oversee the 5 Year Plans) but many analysts have long regarded this to be an underestimate. Partly because of doubts over official figures, Shih compiles his data from only the most reliable estimates. There are, however, other more speculative, alternative accounts.
Outlandish revelations?
The most impressively negative assessment concerning China's debt problems can be found in a reading of documents published by the PBOC Financial Stability Board in October. For the first time, well known and reasonably reliable "on balance sheet assets" can be combined with "off balance sheet" assets and measured -- according to the PBOC's own figures -- at "more than double" where they were before: or in other words, at an astonishing 833% of GDP. This all appears in a blog post by Christopher Balding, associate professor at HSBC Business School, Peking University.

The findings are currently being chewed over by quite a few China-focused economists, and the debate over their exact meaning continues, but there is no doubt a heightened concern over the reliability of numbers coming out of China.
A Darkening Mood(y's)?
The last week or so, however, saw the temperature of this debate rise again with another warning from Moody's, and another scolding missive from the IMF, calling on China to "prioritise financial stability over development goals," or in plain speak, stop hosing money around to keep the growth figures on target.
The problem is that as speculated debt levels rise, so the implied risk of a correction magnifies, which in turn forces economists to look a little harder at the numbers. If, on examining the numbers, they turn out to be less reliable than previously assumed this merely adds further uncertainty to a problem of enormous scale, encouraging beads of sweat to accumulate on the temples of hitherto optimists. When this happens, there arrives a point when reassuring platitudes about the China miracle and the millions brought out of poverty start to seem insufficient as a guide to the future.
Psychologists have long understood that in disaster scenarios most people behave strangely, going through normal routines in abnormal situations, like fetching luggage down from overhead lockers as water pours in the gaping hole in the side of the ship, or waiting for the fasten-seat-belt sign to turn off as fire spreads through economy class. The conclusion they draw is that in stressful or shocking situations, the human mind finds it difficult to adjust to rapidly changing circumstances. It is comforting to assume this behavior is limited to disaster scenarios, but given when financial corrections occur, they often turn out to have been quite obvious ... in retrospect, it is also tempting to think disasters might offer more general insights into how human minds ignore evidence that runs counter to cherished beliefs.
Deleveraging as Discourse
This year has seen China's growth rate keep pace with expectations, even perhaps improve a little. But this has also been accompanied by repeated reminders that no serious reform would either happen or be announced before the Party Congress in October. Predictably, there has been no serious reform, and while the Chinese government constantly refers to the need to deleverage, there has been no serious deleveraging. Indeed debts just keep rising, in some sectors faster than ever before. For example, Local SOEs and Local Government Finance Vehicles rose by 21% in the first nine months of this year, to $48 trillion yuan ($7.2 trillion). For comparison, just this increase alone is larger than all of Russia's economic output in 2016, according to IMF figures.
It has been said before, and it will doubtless be It has been said before, and it will doubtless be said again, that China bears are an endangered species, constantly proven wrong by the passage of time. But the numbers are still the numbers, and they all point in one direction. A recent missive from "Tyler Durden" -- the pseudonymous oracle of doom from the fringes of Wildweb -- is more lurid than most, but he claims that even record credit creation to Q3 2017 failed to stimulate the economy at all. This may, in the end, be overdoing it, but as with the IMF, Moody's, S&P's, etc., the direction of travel is all downhill. And while some forecasts are inevitably more dramatic than others, sincere refutation of inevitable outcomes must eventually amount to more than simply, "it hasn't happened yet."


https://www.forbes.com/sites/douglasbulloch/2017/12/15/chinas-debt-bomb-just-keeps-getting-bigger/#75a67be1be4f




China's debt levels pose stability risk, says IMF

Larry Elliott Economics editor
Thu 7 Dec 2017 12.00 AEDT


https://www.theguardian.com/world/2017/dec/07/china-debt-levels-stability-risk-imf


China's Debt Battle Has Global Growth at Stake
By Enda Curran and Chris Anstey
‎30‎ ‎October‎ ‎2017‎ ‎6‎:‎00‎ ‎AM‎ ‎AEST Updated on ‎30‎ ‎October‎ ‎2017‎ ‎9‎:‎02‎ ‎PM‎ ‎AEST


https://www.bloomberg.com/news/articles/2017-10-29/global-economy-s-health-at-stake-as-china-tries-to-hold-a-sneeze



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Bear
 Posted: Feb 13 2018, 05:15 AM
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It is of concern Scepo, China the developing country with the second largest economy in the world, could trigger another GFC. http://fairdinkumnewschat.com/huh.gif

From your link, written by Larry Elliott.


Fears that China risks being the cause of a fresh global financial crisis have been highlighted by the International Monetary Fund in a hard-hitting warning about the growing debt-dependency of the world’s second biggest economy.


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Politicians and diapers should be changed frequently and all for the same reason.

~José Maria de Eça de Queiroz,

We live in a world in which politics has replaced philosophy. ~Martin L. Gross, A Call for Revolution, 1993

"Stupid people are like glow sticks: I wanna snap em and shake the shit outta them till the light comes on."
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scepo
 Posted: Feb 13 2018, 06:39 AM
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Yes I think China is a worry in more ways than one. And I think part of the problem is that it is difficult, if not impossible, to actually get reliable figures on their debt, economy and almost anything to do with them. http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_don_t_know.gif

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Bill
 Posted: Feb 14 2018, 02:21 PM
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China entering the 'Oil Futures" market will certainly put pressure on the $US. Other countries have tried to write 'oil prices' in something other than $US and the U.S. has embarked on a 'regime change' assault on them.

This move by China is less obvious but has the same thrust.

If the nexus can be broken between international trade and the $US, the U.S. economy may collapse with no continuing access to what is virtual monopoly money.

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scepo
 Posted: Feb 14 2018, 05:20 PM
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Maybe the Chinese economy may collapse. http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_don_t_know.gif

Just a thought. http://fairdinkumnewschat.com/blink.gif

Then again I don't suppose anything communist run could collapse eh? http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_don_t_know.gif

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Bill
 Posted: Feb 16 2018, 03:32 PM
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QUOTE (scepo @ Feb 14 2018, 05:20 PM)
Maybe the Chinese economy may collapse.  http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_don_t_know.gif

Just a thought.  http://fairdinkumnewschat.com/blink.gif

Then again I don't suppose anything communist run could collapse eh?  http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_don_t_know.gif

When you micromanage the economy that's a given scepo. No speculators.

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Flin
 Posted: Feb 16 2018, 03:38 PM
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They have probably already figured out a way to reduce their risk by cheating.

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scepo
 Posted: Feb 16 2018, 04:39 PM
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Could the world’s new superpower be on the verge of collapse?

CHINA may be witnessing the beginnings of its own end. Could the world’s new superpower be on the verge of collapse?

Paul Wilson
news.com.au
June 21, 2017





COULD China be witnessing the beginnings of its own end?

The vast majority of commentators say chances are slim. Most are as dismissive of China-sceptics as Nikita Krushchev was of USSR doom-mongers in the late fifties. Yet within three decades of “We will bury you!” Krushchev was proved wrong. History was not on his side and the only grave being dug was for the Soviet Union itself.

But, surely, this is the beginning of the great “Chinese Century”? The People’s Republic is completely different to the USSR? It’s all about economics now? Well, yes and no ...

A ‘NATION STATE’?

Pull out a map of the Orient. Not a Chinese Communist Party standard issue, but one from history. Whether you go back a hundred years or a thousand, the image that greets you is strikingly similar: a far, far smaller “China”, centred on the old Han Chinese heartlands. Much of what lies within “Chinese” borders today was not so long ago a mosaic of very separate, non-Chinese states, only absorbed by force.

Travel around China, and as you leave the booming cities of the east, the picture becomes clear. Fewer people look “Chinese”, speak Chinese (either Mandarin or Cantonese), or act “Chinese” (mosques instead of Mao, chortens instead of chopsticks). It is not so much “ethnic minorities” living in “autonomous zones”, more non-Chinese majorities whose homelands have been swiped from beneath their feet. The contrast with Beijing and Shanghai is stark, despite millions of Han Chinese families being forcibly relocated to live in these regions, or bribed with government jobs.

If it was inevitable Soviet Republics like Kazakhstan and Uzbekistan would one day seek self-determination, is it so hard to believe Tibetans and Uighurs won’t do the same? Or that Inner Mongolians wish reunification with their “Outer” cousins?


THE WAR IS OVER?

China may not face the threat of a cold war, yet it is still embroiled in major conflict. Trump, Putin, even Kim Jong-un could be roll-called as potential adversaries, but foreign opponents are the least of Party Leaders’ worries. The reality is they are already at war on three home fronts:

Xinjiang

This is the Mandarin name for the enormous province that makes up northwest China. However, a significant minority of the region’s (primarily Muslim) inhabitants use “East Turkestan” or “Uighurstan”. The area’s history is of mixed fortune but for much of the past it was made up of rich independent kingdoms like Khotan or Kashgar. As recently as 1949, East Turkestan existed as an independent republic. Today, the largest ethnic group is the Uighurs, and many are in conflict with Beijing. Suicide bombings, embassy attacks and plane hijackings are regularly carried out by groups demanding their own nation state. A 2014 attack at the Kunming Railway station killed 31 and injured 141.

Tibet

The Tibetan struggle may be the most peaceful “war” on the planet, but this does allow the Dalai Lama to retain broad international sympathy. Historically, Tibet also included much of the modern Chinese provinces of Qinghai and Sichuan, and ethnically and culturally Tibetans have always been completely at odds with their Chinese neighbours. This whole region is still primarily “Tibetan”, despite 150,000 Tibetans living in exile. Recent protests have turned violent, sometimes deadly.

Taiwan

Technically, China is not at war with this nation but that is only because Taiwan has never formally declared nationhood. If Taipei does, Beijing has vowed it will launch an immediate military attack. As recently as March 2017, Taiwan’s Defence Minister talked of “warfare” against mainland China. With hostilities in the South China Sea steadily increasing, and Washington using Taiwan as a bargaining chip in its negotiations with Beijing, developments in Taipei could yet be a major catalyst for change.


ECONOMICS OR POLITICS?

If economics as much as politics proves instrumental in the unravelling of modern China, Hong Kong holds the key. Beijing has made every effort to integrate the former colony into the mainland economy, but fundamental obstacles remain. Uncompromising protests frequently denounce Beijing for reneging on promises, with many “islanders” demanding full democratic rights and an end to the one-party system.

Dissent is spreading across southern China and many protesters, like their Hong Kong counterparts, are Cantonese — or Hokkien-speaking Han. Those south of the Yangzte River may share ethnic and cultural ties with their Mandarin-speaking cousins in the north, but they have long considered themselves different. Traditionally this might have only been a preference for rice over noodles, but increasingly debate is about more than what food’s on the table.


PAPERING OVER THE CRACKS

The world’s new “superpower” hopes investment in the provinces will convince locals that life under CPC rule is preferable to any breakup. In particular, President Xi Jinping is staking billions on his “One Belt, One Road” policy, aimed at creating a “New Silk Road” to bring trade and prosperity.

Nevertheless, the economy is increasingly volatile. Could a 9/11-type terrorist event cause it to implode? Under such circumstances, might the Han Chinese call for their Uighur, Tibetan and Mongol “compatriots” to be cut loose? This is a country famous for turning its back on the outside world.

Tellingly, the Kremlin also ordered mass migrations. Stalin sent thousands of native Russians to “modernise” his newly created Soviet Republics, yet following the breakup of the USSR the vast majority quickly returned. Successive leaders tried similar “economic solutions” but the likes of Perestroika and Glasnost proved too little too late.

Will China collapse tomorrow? Probably not. In the next 30 years? Ask Mikhail Gorbachev.

Paul Wilson has been travelling through Central Asia and China since the late 1990s. His book, The Silk Roads (Trailblazer), is in its third edition. He is a regular speaker at the UNWTO’s Silk Road Programme and Open Central Asia Literary Festival.



http://www.news.com.au/finance/economy/world-economy/could-the-worlds-new-superpower-be-on-the-verge-of-collapse/news-story/46a688923e23434cb8bb32e8fa576b74


I would suggest to you Bill that the USSR collapsed economically.

Communism may be all well and good in theory, but in practice the greed in top echelon of communism is just as great as, or greater than it is in capitalism. It becomes very much like a feudal system.

It is inevitable that communism will fail and fail miserably.

http://fairdinkumnewschat.b1.jcink.com/uploads/fairdinkumnewschat/smiley_IMHO.png of course.

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charka
 Posted: Feb 16 2018, 05:59 PM
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get a mistress as a diversion and a no bonking rule works here
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