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China Is Hunting for Foreign Buyers for Its Sovereign Debt

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Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#61

Post by nate_meurer »

jcranmer wrote: post #57
aristophenes wrote: post #50

Earlier quoted context omitted.

Is your claim that good trade is not possible? I think in the 150 years since your examples there have been many positive examples of trade beneficial to both parties, and hardly any that are harmful, though there should be a handful. For example, South Koreas economy, in a single persons lifetime, has grown 60x per person, inflation adjusted. An entire nation pulled out of poverty. https://tradingeconomics.com/south…

> Is your claim that good trade is not possible? I think in the 150 years since your examples there have been many positive examples of trade beneficial to both parties, and hardly any that are harmful, though there should be a handful. More like 70 years. It was only around WWII that the US kicked the theme of trade-or-death running its foreign policy. The early 20th century has several wars you don't read about in…

Which wars would those be?

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#62

Post by _cs2017_ »

cm2187 wrote: post #3

Can someone explain to me why an investor would want to invest in a foreign debt and currency from a country that has capital controls and a history of undervaluing its currency?

Capital controls don't apply, you buy the bonds through HK.

Devaluation is always a risk, in any country. USD can fall too, look at historical USD exchange rates to the world currency basket. Foreign bond investors have to live with that risk; I assume they don't expect a large Yuan devaluation. also see https://www.bloomberg.com/news/articles/2018-11-16/the-world...

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#63

Post by jazzyjackson »

nate_meurer wrote: post #61
jcranmer wrote: post #57

Earlier quoted context omitted.

> Is your claim that good trade is not possible? I think in the 150 years since your examples there have been many positive examples of trade beneficial to both parties, and hardly any that are harmful, though there should be a handful. More like 70 years. It was only around WWII that the US kicked the theme of trade-or-death running its foreign policy. The early 20th century has several wars you don't read about in…

Which wars would those be?

Not all of these were hot wars, but the point of overwhelming force is, best case scenario, you don't have to shoot anyone. Hawaii, Panama, Nicaragua, Honduras, Haiti...

Did you know that USA and allies attempted to keep the Tsars in power against the Soviet Revolution of 1918? I didn't until now...

https://en.wikipedia.org/wiki/United_States_involvement_in_r...

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#64

Post by jazzyjackson »

nate_meurer wrote: post #60
jazzyjackson wrote: post #49

Earlier quoted context omitted.

Given that the UK & USA has a habit of showing up with a Navy when someone refuses to trade (thinking of the perry expedition, the opium wars) I'm left wondering what a good trade actor looks like.

A habit... really? Based on examples from two centuries past?

The purpose of the US Navy is to keep trade routes open. When countries close their ports we have an absolute conniption.

The entire 20th century was a war between globalization and the self-sufficient dream of communism (I don't know why they couldn't find a happy compromise myself, but alas) -- a fight to keep "trade" flowing -- this often manifests in the west extracting resources from less powerful countries (not saying Soviet Russia never extracted resources from poorer countries)

I don't have all the answers but USA is out for itself just the same as everyone else is.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#65

Post by nradov »

ajross wrote: post #17
wonderwonder wrote: post #2

I wonder if China is seeing any impediments due to people being loathe to invest in a country where personal freedoms are very restricted and millions of their citizens are swept up in re-education camps. I would be hesitant from a personal standpoint but most larger wealth funds are probably not so restricted. By the same token neither are most manufacturers.

Sort of, but that's not why. Modern authoritarian governments, historically, are volatile. The Soviet Union lasted about 75 years, and that's pretty much a record for stability. The PRC is just getting to that age now. Who's going to buy a 30 year bond from a government that has about even odds of surviving to maturity?

You're right about the level of political risk. But even when there's a revolution or secession, the successor state is still legally liable for the debt. So investors might still get some of their money back.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#66

Post by oyashirochama »

jazzyjackson wrote: post #63
nate_meurer wrote: post #61

Earlier quoted context omitted.

Which wars would those be?

Not all of these were hot wars, but the point of overwhelming force is, best case scenario, you don't have to shoot anyone. Hawaii, Panama, Nicaragua, Honduras, Haiti... Did you know that USA and allies attempted to keep the Tsars in power against the Soviet Revolution of 1918? I didn't until now... https://en.wikipedia.org/wiki/United_States_involvement_in_r...

The Tsar would have probably been a better choice looking in hindsight. Most likely would have resulted in an eventual democracy.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#67

Post by oyashirochama »

dcposch wrote: post #36
unioncalia wrote: post #18

Earlier quoted context omitted.

Not only can you not move money out of China if you have some invested there, you can't even leave! => The US government is warning Americans that if they visit China they may not be able to return home https://www.businessinsider.com/us-china-travel-advisory-201...

> The new China travel advisory is a level two advisory which urges increased caution. > Other countries or regions with a level two advisory include Algeria, Burma, Antarctica, Belgium, France, Germany, Denmark, and the United Kingdom. Sounds not particularly serious. Also lol at Antarctica

Any travel advisory is pretty serious since it implies a risk, that itself will cause diplomatic issues due to tourism loss.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#68

Post by ianai »

jazzyjackson wrote: post #64
nate_meurer wrote: post #60

Earlier quoted context omitted.

A habit... really? Based on examples from two centuries past?

The purpose of the US Navy is to keep trade routes open. When countries close their ports we have an absolute conniption. The entire 20th century was a war between globalization and the self-sufficient dream of communism (I don't know why they couldn't find a happy compromise myself, but alas) -- a fight to keep "trade" flowing -- this often manifests in the west extracting resources from less powerful countries (not…

I think you’re conflating topics, concepts, and history. I was talking about international trade and macroeconomics - primarily the last 30-50 years. The Churchill quote seems relevant as well but still off topic: “democracy is the worst government except for all the other governments tried through time.” (Paraphrased.)

Every international trade has an associated international currency exchange. China’s manipulated its global position through exchanging more of its currency for USD than the market clearing rate for decades. This had the affect of setting their entire economy on “fire sale” prices, also for decades. They only acknowledge the existence of Chinese IP rights owned by Chinese companies. Etc,etc,...There are books on these topics.

During that timeframe the US government has worked unilaterally and internationally to combat the dotCom bust, the S&L crisis of the 80s, and the Great Recession, amongst other things. A good trade actor has many things, including a relatively stable currency and financial system. The US isn’t some paragon of perfection, but they have done some identifiably good international trade measures.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#69

Post by jcranmer »

nate_meurer wrote: post #61
jcranmer wrote: post #57

Earlier quoted context omitted.

> Is your claim that good trade is not possible? I think in the 150 years since your examples there have been many positive examples of trade beneficial to both parties, and hardly any that are harmful, though there should be a handful. More like 70 years. It was only around WWII that the US kicked the theme of trade-or-death running its foreign policy. The early 20th century has several wars you don't read about in…

Which wars would those be?

US "interventions" in Honduras, Mexico, Haiti, Cuba, and probably some other countries I'm forgetting. Even the entry in WWI is largely a trade-or-death policy move, as it was predicated in large part on Germany's hostility to American shipping interests.

Re: China Is Hunting for Foreign Buyers for Its Sovereign Debt

#70

Post by nate_meurer »

jcranmer wrote: post #69
nate_meurer wrote: post #61

Earlier quoted context omitted.

Which wars would those be?

US "interventions" in Honduras, Mexico, Haiti, Cuba, and probably some other countries I'm forgetting. Even the entry in WWI is largely a trade-or-death policy move, as it was predicated in large part on Germany's hostility to American shipping interests.

You're taking a lot of liberty with the term war here :) And in none of your examples was trade even remotely as great a consideration as were strategic regional rivalries between global powers, e.g., Germany in pre-WWII mexico and carribean, the Soviets for the rest of the century...

The United States' entry into WWI had nothing to do with forcing Germany to trade. Literally nothing. I'll let you refresh your own memory regarding events at that time, including Germany's unrestricted submarine attacks on American civilians.

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