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Chinese policy makers recognise this problem.
Listen to Xi's speech carefully in which he urge developed countries policy makers to consider developing economies. This is similar to the Greenspan hikes which were the trigger of Asian crisis.
I don't worry about the delisting risks ...or regulations etc
However interest rate effects at a time when China economy is weakening will mean potential for large downside is higher.
Investors have to be prepared.
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
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China is now facing the reverse of this
(This post was last modified: 21-04-2022, 08:54 AM by
revealer.)
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Ji Pei, China Huat Liao!!!
HUAT AH !!!!!
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(21-04-2022, 08:53 AM)revealer Wrote: China is now facing the reverse of this
![[Image: 601121a48009010773ae4441-carry.jpg]](https://i.ibb.co/w4f5WJg/601121a48009010773ae4441-carry.jpg)
The reverse is
1 Global investors borrow inUS$ cheaply.
2. They buy high yield.binds in China.
3. US rate rise
4. They have to.dump China bonds and flow back the money to pay off US$ debts.
5. This case the yield to shoot up for.china.corporate bonds.
6. China economy is weakening and these companies have difficulty paying the debts and have to borrow T higher a d higher cost.
Cutting rates in China will accelerate the problem as the gap will trigger outflows
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
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This issue is a lot more serious. I sort of miss it due to ther headline news of delisting regulation war etc.
This is same pattern as Asian crisis. Only difference is China has big reserves and currency control in place
But it is still serious. Key an eye on this
Many China bulls will be wrong at least until this is resolved
I, being poor, have only my dreams; I have spread my dreams under your feet; Tread softly because you tread on my dreams.
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