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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    Will Beijing's debt become a major threat to the global economy in 2020?

    Rocky
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    • Post n°1

    Will Beijing's debt become a major threat to the global economy in 2020? Empty Will Beijing's debt become a major threat to the global economy in 2020?

    Post by Rocky Mon 23 Dec 2019, 2:06 am

    Will Beijing's debt become a major threat to the global economy in 2020?

    Will Beijing's debt become a major threat to the global economy in 2020? 18393



    Economy News - Baghdad
    While the curtain has not fallen definitively on the trade war between Washington and Beijing, the Chinese economy is under a bundle of crises that may be compounded by the burning trade war led by US President Donald Trump against China for more than a year and a half .
     
    Between the violent American pressures that target pruning the Chinese genie, and the huge debts recorded by Chinese companies, it remains for Beijing to rearrange its cards, especially as crises still persist as long as the trade war with the United States of America continues .
     
    A few days ago, the "first stage" agreement was announced, in the context of repeated attempts to avoid the continuation of the trade war that has ravaged the economies of the two countries during the past period, although the Chinese economy is the most affected so far, according to official data and figures .
     
    In a recent report, Mark Zandi, chief economist at Moody's credit rating agency, considered that China's corporate debt represents a "greater risk" to the global economy during the coming period, especially during 2020 .
     
    He said that Chinese corporate debt is the biggest risk to the global economy today, with the fact that it is growing very fast. He pointed out that many Chinese companies struggle to deal with the country's economic slowdown, due to trade crises and other factors .
     
    Last week, a report by Fitch Ratings said that private companies in China had defaulted on their debt repayment at a record pace this year. He pointed out that 4.9% of Chinese private companies had defaulted on debts denominated in local currency (yuan) in the first 11 months of this year, which is a record high level, compared to 0.6% in 2014 .
     
    This year, China witnessed the lowest economic growth rate in more than 27 years, amid trade friction with the United States and declining global demand with slowing growth in a number of major and developing economies .
     
    To what extent has China's external debt jumped?
     
    Official data and figures indicate that China's total debt jumped to 310% of its GDP until mid-July, or 15% of total global debt, compared to more than 303% at the end of the first quarter of this year, up From about 297% of its GDP at the end of the first quarter of last year .
     
    The Institute of International Finance data indicated that China's total debt increased to more than $ 40 trillion, constituting about 15% of global debt. China's government debt increased from 47.4% in the first quarter of 2018 to 51% of its gross domestic product in the first quarter of this year .
     
    The data indicated that household debt in China increased from 49.7% to 54% of GDP during the same period. Bond issues inside China have increased, leading to a sharp increase in borrowing by local governments and banks this year .
     
    At the same time, China's economic growth slowed to 6.2% during the second quarter of this year, at the weakest pace in at least 27 years. This decrease is due to the cooling demand at home and abroad in the face of the increasing American trade pressures that raised tariffs .
     
    And with the Chinese government continuing to rely on issuing government bonds as part of its efforts to bridge the huge deficit, the total net issuance of local government bonds reached 2.1765 trillion yuan ($ 316.5 billion) in mid-July, and despite repeated warnings of its continued rise, but the Chinese government You see that debt risk is generally controllable .
     
    Violent losses due to the war with the United States
     
    So far, with the trade war between Washington and Beijing continuing, official figures indicate that China's losses are great compared to the losses incurred by the United States of America as a result of the war between them, as the data pointed to the decline in figures for foreign trade of China during the month of June (June) last .
     
    And China's exports fell by 1.3% during the month of June, compared to the figures achieved in the same period last year, due to the imposition of new customs duties on Chinese products exported to the United States. During the same period, imports continued to decline by 7.3% over a year .
     
    In a previous research memorandum, the studies described by Capital Economics, that "the contraction of exports to the United States escalated last month" as a result of the new US tariffs. In light of the escalating trade tension with Beijing, Washington decided in May to increase customs duties from 10 to 25% on imports of Chinese goods worth $ 200 billion annually .
     
    China responded on June 1 by imposing tight customs duties on more than 5,000 US goods. Exports are one of the pillars of the Chinese giant's economy, which last June faced a drop in domestic demand .
     
    The agency warned that "a new slowdown in domestic demand will affect the volume of imports for the rest of the year," noting that the risks surround the Chinese economy as long as the trade war with Washington continues, which insists on passing a trade agreement with Beijing, but to serve its foreign interests and exports .
     
    The trade agreement is a "priority" for Washington
     
    And while US Trade Representative Robert Lighthiser said yesterday, the conclusion of a trade agreement between the United States and the United Kingdom is a priority for Washington, and that negotiations will start as soon as London sets its goals. Trade tensions eased, but the risk of escalation again .
     
    The agency said that the tensions between Washington and Beijing, especially in areas such as technology, would constitute a major obstacle to a full settlement of the trade war. And it expected that the Chinese economy will grow by nearly 6% during the year 2020, compared to its previous forecast at the level of 5.7%, after the implementation of the initial trade agreement .
     
    The United States and China last week calmed the intensity of their trade dispute by announcing a preliminary trade agreement that cuts some US tariffs on Chinese goods in exchange for Chinese purchases of US agricultural products and other goods .

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