China’s Deflationary Spiral Is Now Entering Dangerous New Stage

[Dalit]

US External Debt: % of GDP, 2003 – 2024 | CEIC Data

US External Debt accounted for 95.0 % of the country's Nominal GDP in 2023, compared with the ratio of 95.3 % in the previous year.

www.ceicdata.com

US external debt is 95 percent of gdp

How much debt does the US owe to China and vice versa?

 

[FHN]

How much debt does the US owe to China and vice versa?

749 billion as of April 2024. I don't think china owes the US anything.

 

[Dalit]

749 billion as of April 2024. I don't think china owes the US anything.

That speaks volume.

 

[FHN]

Most of

That speaks volume.

Remember it was china that helped the US from the 2008 financial crisis.

 

[Mista]

Well if you are only comparing government debt then 35 is way more than 16 trillion. Then don't bring up total debt to GDP ratio lol

There's really more to that. The US has higher government debt (due to reckless spending), while China has higher corporate debt (due to reckless investments/inefficient SOEs). Government is able to raise taxes or print money to repay debt; corporates don't have that luxury.

Even China themselves recognize that their macro leverage is higher than other major economies, and it's being exacerbated by persistent deflation (increasing the real value of debt). Their priority is to reinflate the economy and not end up like Japan.

http://www.nifd.cn/Uploads/SeriesReport/a2b08cfb-2cae-4cce-90d7-b22e749559b0.pdf

当前中国的宏观杠杆率已经超过主要经济体，2021 年以来主要经济体出现了去杠杆周期，私人和政府部门的杠杆率都有所下降，G20 经济体的杠杆率共下降了接近 50 个百分点，而中国的宏观杠杆率仍在继续上升。导致走势分化的主要原因在于通胀水平走势的分化。疫情后，中国价格水平低迷，GDP 缩减指数已经有六个月为负，而发达经济体正在经历持17续较长时间的高通胀。加大逆周期调节力度，抬高通胀率既有利于提高企业信息，拉动经济增长，也有利于缓解宏观杠杆率过快上涨的趋势，降低金融风险。

Translated:
Currently, China's macro leverage has exceeded that of the major economies. Since 2021, the major economies have been undergoing a deleveraging cycle, with both private and government leverage declining, with the leverage of the G20 economies declining by a total of close to 50 percentage points, while China's macro leverage has continued to rise. The main reason for the divergence in trends is the divergence in inflation levels. China's price level has been subdued in the aftermath of the epidemic, and the GDP deflator has been negative for six months, while the advanced economies are experiencing prolonged periods of high inflation. Increasing counter-cyclical adjustment and raising the inflation rate will not only help to improve corporate information and boost economic growth, but also help to mitigate the trend of excessively rapid rise in macro leverage and reduce financial risks.

Translated with DeepL.com (free version)

 

[Dalit]

Most of

Remember it was china that helped the US from the 2008 financial crisis.

Exactly. We all remember.

 

[FHN]

China has little overseas debt, and a high national savings rate. In addition, most of the debt is state owned – state-controlled banks loaned funds to state-controlled firms – giving the government the ability to manage the situation.Non-financial corporate debt is literally investments in the real economy. It is the healthiest of all debts. I do agree that it's something that needs to be managed.

 

[Dalit]

China has little overseas debt, and a high national savings rate. In addition, most of the debt is state owned – state-controlled banks loaned funds to state-controlled firms – giving the government the ability to manage the situation.Non-financial corporate debt is literally investments in the real economy. It is the healthiest of all debts. I do agree that it's something that needs to be managed.

By the way, this is also what worries the Western world. Such a healthy economic situation for China is bad news for the West.

Ideally, the Western world loves to have Pakistan's around the world. Economically shambolic and easy to manipulate. Drown the enemy in debt, humiliate them for a few billion dollars and uphold your authority over them.

 

[FHN]

By the way, this is also what worries the Western world. Such a healthy economic situation for China is bad news for the West.

Ideally, the Western world loves to have Pakistan's around the world. Economically shambolic and easy to manipulate. Drown the enemy in debt, humiliate them for a few billion dollars and uphold your authority over them.

The West doesn't have much to offer to the global South hence why they are shifting toward China. Build back better was a Scam. the US Africa summit was all about lecturing and no offer was made except more imf loans. America can't build infrastructure at home let alone in the global South.

U.S. makes $200 billion global infrastructure push to counter China

The funding will be spread out over five years and come from a mix of existing federal funds, other G7 and European Union countries, and private companies.

www.nbcnews.com

This article makes me laugh where's the 200 billion dollars Biden promised for global South. All empty talk like usual.

 

[Dalit]

Buzz off then!
No one needs an economic lesson from Pakistani pizza selling economic refugee!

You are on our forum. The last I time I checked, the forum's name is Pakistani defence forum.

Why don't you follow your own advice?

 

[Dalit]

The West doesn't have much to offer to the global South hence why they are shifting toward China. Build back better was a Scam. the US Africa summit was all about lecturing and no offer was made except more imf loans. America can't build infrastructure at home let alone in the global South.

U.S. makes $200 billion global infrastructure push to counter China

The funding will be spread out over five years and come from a mix of existing federal funds, other G7 and European Union countries, and private companies.

www.nbcnews.com

This article makes me laugh where's the 200 billion dollars Biden promised for global South. All empty talk like usual.

The Global South and the West is on a massive collision course.

 

[FHN]

The Global South and the West is on a massive collision course.

US sanctions Chinese firms for aiding Pakistan missiles project

The United States has sanctioned a Chinese research institute and several companies for supporting Pakistan's ballistic missile program. This action precedes PM Narendra Modi's visit to the US for the Quad summit. The sanctions target entities involved in missile proliferation, including firms...

m.economictimes.com

The US always find a way to sanction Chinese firms lol soon they will have nothing else to ban.