CHINAMacroReporter

South China Sea & Taiwan

'It would not be accurate to say China claims the entire South China Sea as its sovereign territory because the Chinese are unclear about what exactly their claim is and what it is based on.'
by

|

CHINADebate

May 2, 2020
South China Sea & Taiwan

SOUTH CHINA SEA

1. SOUTH CHINA SEA: China's Claims

2. SOUTH CHINA SEA: China's Energy Intimidation

TAIWAN

1. TAIWAN: China Ramps Up Intimidation

2. TAIWAN: Is Now the Time for China to Invade?

3. TAIWAN: Could China Conquer Taiwan?

4. TAIWAN: Will the U.S. Defend Taiwan?

SOUTH CHINA SEA

1. SOUTH CHINA SEA: China's Claims

For more on China's claims, read the 501- page ruling, 'IN THE MATTER OF THE SOUTH CHINA SEA ARBITRATION.'

'It would not be accurate to say China claims the entire South China Sea as its sovereign territory because the Chinese are unclear about what exactly their claim is and what it is based on.'

Malcolm Riddell: ‘How do the Chinese justify their claims in the South China Sea?’

Bonnie Glaser: ‘The Chinese have never really made clear - I would say they are deliberately ambiguous - about what their claims are.’

  • ‘So it would not be accurate to say China claims the entire South China Sea as its sovereign territory because the Chinese are unclear about what exactly their claim is and what it is based on.'
  • 'And that applies to the Nine-Dash-Line (above) that China uses to assert sovereignty.’

‘The Chinese have said the South China Sea is historically theirs, based on their discovery of the islands, their naming of the islands, they're using of the islands.’

  • ‘The Chinese have asserted that because they were there first, that they have rights to fish or rights to energy, regardless where those take place in the South China sea.’

‘But the Philippines brought a suit against China disputing its claims.’

  • ‘And a July 2016 ruling by an arbitral tribunal, formed under the Convention on the Law of the Sea, found in favor of the Philippines; China rejected the ruling.’

‘Among other things, the tribunal found.’

  • ‘that China's “Nine-Dash Line” is invalid.’
  • ‘that historic rights - in this particular instance in the Spratlys - is not the basis for a legal claim.’
  • ‘that China’s assertion of a 200 nautical mile exclusive economic zone around these land features because they were islands is invalid.’

'So, the most China can claim now is in accordance with this ruling, even though it rejected it.’

  • ‘The Chinese are trying to come up with a claim of 12 nautical miles of exclusive territorial sea around the islands - not a blatant violation.’
  • ‘The United States challenges even these claims by sailing inside and through them.’

2. SOUTH CHINA SEA: China's Energy Intimidation

from the ASIA MARITIME TRANSPARENCY INITIATIVE, CSIS

‘When any of these countries has tried to survey for oil or drill for oil, China has very quickly responded and intimidated them from doing so.’

Malcolm Riddell: ‘What is China’s position on oil & gas exploration and drilling in the South China Sea?’

Bonnie Glaser: ‘China considers the South China sea to be a core interest.’

  • ‘We have seen over the last few years that China is pursuing its objective of gaining control over activities in the South China sea.’

‘In most instances, the Chinese are relying on paramilitary forces and maritime militia really to advance their administrative control and to prevent other countries - other claimants in the region – from developing new oil and gas sources.’

  • ‘The countries that are really the targets are the Philippines, Malaysia, and Vietnam.’

‘When any of these countries has tried to survey for oil or drill for oil, China has very quickly responded and intimidated them from doing so.’

  • ‘This is really to signal that China is no longer going to tolerate anything other than joint development.’
  • ‘If a country wants to survey for oil or drill, it's going to have to do so jointly with a state-run Chinese company.’

Malcolm: ‘How does China intimidate these countries?’

Bonnie: ‘Well, for example, in the last just a couple of months we’ve yet another episode of China's intimidation taking place off the coast of Malaysia.’

  • ‘Here’s what is happening.’

‘In December, a Malaysian state-run energy company contracted a vessel to explore two areas in the South China Sea, off the Malaysian coast, where has an extended continental shelf claim.‘

  • ‘This is in an area that is claimed not only by Malaysia but also by China and Vietnam. Both China of those countries sent ships.’

‘The Chinese sent a survey ship, the Hai Yang Di Zhi 8.’

  • ‘This ship is well-known.’
  • ‘Last year, it was operating last year off the coast of Vietnam, surveying inside of Vietnam's exclusive economic zone, because China was angry about drilling operations that were going on off the coast of Vanguard Bank.’

‘The United States has sent two Navy ships over the past week to these waters near Malaysia.’

  • ‘There is a report that these ships are operating within 50 nautical miles of the Malaysian ship that's there.’

‘The United States doesn't take a position on sovereignty in the South China sea in any of these sovereignty disputes – other than supporting the arbitral tribunal’s ruling in favor of the Philippines again China.’

  • ‘But this is a rare moment where the United States has signaled that it is concerned about Chinese bullying.’
  • ‘We saw once in 2014, the United States had sent a reconnaissance plane, a PA to overfly Second Thomas Shoal when the Chinese were intimidating the Philippines.’
  • ‘Thatwas a very far over a land feature, not a Navy ship close by.’

TAIWAN

1. TAIWAN: China Ramps Up Intimidation

‘Ever since President Tsai Ing-wen was reelected in Taiwan in January, we have seen Beijing ramp up pressure on Taiwan both diplomatically and militarily.’

Malcolm Riddell: ‘What are you seeing in Taiwan cross-strait relations these days?’

Bonnie Glaser: ‘Ever since President Tsai Ing-wen was reelected in Taiwan in January, we have seen Beijing ramp up pressure on Taiwan both diplomatically and militarily.’

‘On the diplomatic side, Taiwan has done a pretty good job of combating COVID-19 and has done so with technology and without shutting down schools or businesses – and is using this to promote itself.’

  • ‘That has led Beijing to be quite concerned about international support for Taiwan to rejoin the World Health Assembly, where it used to be an observer, and about international support expanding more broadly.’
  • ‘Within China, I expect the government is blocking information about Taiwan success - it doesn’t want people in China to see that a Chinese-organized society and democratic polity like Taiwan has been successful.’

‘On the military side, we are seeing a lot more Chinese military exercises against Taiwan.'

  • ‘New things, like the first ever 36-hour endurance nighttime exercise held by the PLA air force.’
  • ‘And large numbers of Chinese aircraft are crossing the centerline in the Taiwan Strait.
  • ‘All in all, a much higher volume and tempo of activities than we had seen prior to the election.'

2. TAIWAN: Is Now the Time for China to Invade?

‘I do not believe that China is going to seize U.S. distraction from the pandemic to invade Taiwan.’

Malcolm Riddell: ‘With the United States and the world distracted by the pandemic, do you see a potential for China to take advantage of to ramp up intimidation on Taiwan or even invade?’

Bonnie Glaser: ‘The U.S. military is mindful of the fact that the PLA might see that its preparedness is not quite what it usually is, given the large number of infections that we've seen in the U.S. military.’

  • ‘And there has been some signaling going on to the PLA to not take advantage of this situation and not miscalculate.’

‘One example:There have been two U.S. Navy transits through the Taiwan Strait already this month [April] - usually they're held once a month.’

  • ‘The Trump administration has made these public – in contrast, the Obama administration did not.’
  • ‘We also saw the B-52 bomber flights after some of the rather provocative Chinese military exercises that were taking place earlier this month.’

‘I do not believe that China is going to seize this opportunity to invade Taiwan.’

  • ‘The risks to China remain quite high, and there is no guarantee that the PLA will succeed.'
  • ‘Also Xi Jinping is consumed with domestic challenges.’

‘That said, I do think that China sees an opportunity to intimidate Taiwan more now - which is what they are doing.’

  • ‘We also see examples of this in Hong Kong and in the South China Sea.’
  • ‘So China’s bullying and intimidation are not limited to Taiwan.’

3. TAIWAN: Could China Conquer Taiwan?

'It's very hard to take over an island - that's of course what Taiwan is.’

Malcolm Riddell: ‘It was conventional wisdom for a great deal of my life, but China didn't possess the capabilities even if it had the will to retake Taiwan. What do you think now?’

Bonnie Glaser: ‘If you just look at the military balance between China and Taiwan, there is no doubt that China has military superiority.’

  • ‘But it's very hard to take over an island - that's of course what most of Taiwan is.’
  • ‘The largest island China could seize is Jinmen or Matsu. It might go after Taiping Island, which is the one land feature that Taiwan occupies in the South China Sea.’
  • ‘But taking over the island of Taiwan itself would be difficult for China.’

‘They are making progress but are still lagging behind in some capabilities.’

  • ‘In amphibious landing capabilities they're definitely catching up - for a while it wasn't a PLA priority, but now it is.’  
  • ‘China would be able to prevent Taiwan from dominating the airspace - it can probably take out Taiwan's fighter fleet. But if Taiwan continues to build its capabilities, for example, in numbers of surface-to-air missiles, it could prevent China from gaining that military superiority in the airspace.’
  • ‘China as good anti-submarine warfare capabilities, which would be against the United States, but also Taiwan.’

‘But even if the Chinese were able to land on the beach and somehow establish control, what would it take to control the entire island? Would there be an insurgency?’

  • ‘Maybe we need to draw some lessons from the protests in Hong Kong.’

‘The young people in Hong Kong are willing to stand up for their freedom. They've been willing to fight in the streets.’

  • ‘Some people think that the young people in Taiwan would not. I'm not so sure.’

‘The young people in Taiwan have grown up in a free society (which of course has only existed since really around 1990).’

  • ‘I think that maybe people – young and old - would fight in order to preserve it.’

4. TAIWAN: Will the U.S. Defend Taiwan?

‘That is my fervent hope.’

Malcolm Riddell: ‘If China did invade Taiwan, what would the U.S. do?’

Bonnie Glaser: ‘There are several factors that that might precipitate a U.S. intervention.’

  • ‘But we'd have to consider how this conflict started.’

‘If it were unprovoked and the Chinese just out of the blue decided we're impatient, we want to take over Taiwan, now is the time.’

  • ‘Yes, I think that the United States would come to Taiwan.’  
  • ‘It becomes a little bit more complicated if Taiwan has taken an action that provoked Beijing - perhaps an action that the United States even discouraged Taiwan from taking.’

‘The other factor is the American public's attitudes towards China - we don't know if Americans would really support the us coming to the defense of Taiwan.’

  • ‘In the past, public opinion polls have not shown that a vast majority of Americans would support it.’
  • ‘But today, we can look at the most recent poll this week showing that 66% of Americans now have a negative view of China.’
  • ‘Now, maybe that is to some extent specific to the COVID-19 So we'll have to see if that holds.’  

‘The strongest advocate of coming to Taiwan's defense is going to be the U.S. Congress.’

  • ‘And they matter.’

‘So I'm of the view that - given the trajectory of American attitudes towards China, and if Taiwan continues to elect leaders, like its current president, who are unprovocative and are just trying to preserve the status quo and Taiwan's autonomy - it is very likely that the U.S. government, Congress, and  American people would support intervention on Taiwan's behalf if China attacked.’

Malcolm Riddell: ‘That is my fervent hope.’

More

CHINAMacroReporter

February 22, 2021
How American Free Trade Can Outdo China
‘When it comes to trade, a critical dimension of the U.S. and China competition, America is ceding the field. At the same time, China has expanded its trade footprint. When it comes to trade and investment agreements, China isn’t isolated. The U.S. increasingly is. Now we have to make up for lost ground. America can out-compete China, but first it needs to get back in the game.’
keep reading
February 21, 2021
China’s ‘two sessions’: why this year’s event is so important for Xi Jinping’s vision for the future
‘The ‘Two Sessions,’ the annual meeting of the National People’s Congress, the country’s legislature, and the top political advisory body, the Chinese People’s Political Consultative Conference, begins on March 5 and runs for about two weeks.’
keep reading
February 20, 2021
‘The Future of China’s Past: Rising China’s Next Act'
‘By the Party’s own acknowledgment, Deng’s initial arrangement has run its course. It is therefore time to develop a new understanding that will do for the Party in the next 30 years what Deng’s program did in the previous era.'
keep reading
March 6, 2018
'E-commerce' is rapidly evolving into 'New Retail.' Jack Ma, Alibaba
Ed Tse, founder of the Gao Feng consultancy and the leading expert on Chinese innovation, introduced me to New Retail in a recent conversation. You will find his explanation of New Retail below, along with a couple of videos showing New Retail in action - as amazing today as Minority Report seemed years ago. Perhaps even more amazing is the China business strategy, the 'Third Way,' that made things like New Retail possible. Ed explains the Third Way in Part Two of our discussion that I will be posting soon. Chinese do do things their own way, as the Third Way again demonstrates. For now, have a look at the future today. And, stay tuned for Part Two for Ed's explanation of the Third Way that made New Retail possible.
keep reading
March 1, 2018
'Trump's tariffs just first shot—the big China action is Section 301'
Leland points out that President Trump's really big trade move against China yet to come, that is, Section 301 penalties. If you aren't up to speed on 301, you will be after you read and watch Leland's comments. As Leland says, with Section 301, 'regardless of how Section 232 steel and aluminum tariffs end up in the next few days - you're seeing the beginning, not the end, of Trump's aggressiveness on trade.' 'And, I don't think people have prepared themselves yet for the fact that 301 is coming.'
keep reading
February 22, 2018
A world of debt mortgages our economic future
Irresponsible borrowing by the US, China and India imperils global growth: What is not natural is China’s bad track record on debt: according to the Bank of International Settlements, every measure of debt — consumer, government and corporate — has risen as a share of GDP for the past decade. China went from a low-leverage country in 2007 to having a worse debt position than the US in 2017, despite the fact that the US itself has borrowed heavily.
keep reading
February 16, 2018
China's Crisis of Success
Here are five key points, each corresponding to a section below. "The Rise of China: How Economic Reform Is Creating a New Superpower" by Bill Overholt, published in 1993, was called 'nonsense' and 'too optimistic.' How did that work out for the reviewers? Now, almost three decades after "The Rise of China", Bill believes that China's future has become 'much more uncertain.'
keep reading
February 12, 2018
2017 China Property Report
One of the highlights in our recent 'In Pursuit of Patterns' series of client notes, showed that the land sales growth had tended to lead the price growth and a significant increase in land sales would lead, with a lag, to the subsequent correction in prices.
keep reading
February 9, 2018
The extraordinary power of China's corporate 'mega ecosystems'
Besides Alibaba and Tencent, companies like Ping An Insurance Group, Baidu and JD.com are building out mega ecosystems with incredible speed and intensity. Even some traditional manufacturers are moving in this direction. Zhejiang Geely Holding Group has gone from producing entry-level cars to selling premium models with the help of foreign acquisitions and has been the first Chinese carmaker to move into on-demand mobility services. It has also been experimenting with connected intelligent vehicles, shared ownership programs and flying cars, together assembling a sprawling transportation services ecosystem.
keep reading
February 8, 2018
China's trade surplus up, RMB weaker
[China markets update with TRACK's Bob Savage ] 'The RMB did not like the trade data at all, and it weakened immediately - over 1% today.' 'Overnight, the world has moved a little bit away from its U.S.-centric obsession about equity volatility in the United States and around the world to what's going on in China,' says Bob Savage, CEO of TRACK and member of the soon-to-be-launched China Analyst Network.
keep reading
February 7, 2018
What we import from China
But he can’t keep saying China is ripping us off and he’s going to stop it unless the US targets the biggest imports. The trade deficit with China is bigger than with the next eight countries combined. NAFTA? The trade deficit in cell phones and computers alone with China is bigger than the trade deficits for all goods with Mexico and Canada combined.
keep reading
February 3, 2018
China's RMB oil futures exchange—the 'story of the year'!
‍The Shanghai International Energy Exchange:blowing up more than oil : There's a lot to follow in China. And, I had missed reports about the opening of the Shanghai International Energy Exchange or INE, likely this quarter. But, during my interview with Bob Savage, the well-respected analyst of global markets and CEO of TRACK, he told me the INE could be the 'story of the year.' That's a big - and interesting - claim about something that seems like one more ho-hum Chinese entity. Bob explained that the INE will create the an RMB-denominated oil futures contract. The first such contract in a petrodollar world, where China is largest crude oil importer. If RMB oil contracts - even just for trade with China - catch on, then the whole global oil trading regime will change. And, given the massive size of the global oil trade, a shift from dollars to RMBs will both erode the dollar as a reserve currency, and push the RMB closer its goal of becoming a full reserve currency.
keep reading
January 10, 2018
'China goes private'—from financial reform to the Belt Road Initiative
[Malcolm Riddell's conversation with Harvard's Tony Saich] The State & Party's technical prowess is somewhat limited.
keep reading
January 10, 2018
What Hiring Activity Says About Firm Valuations in China
How does an obscure factor like hiring practices impact firm valuation? That was the question posed by Deutsche Bank’s quant strategy group in a 2015 whitepaper titled, “Macro and Micro Jobenomics.” The report concluded that online job postings could be used to predict U.S. macroeconomic statistics and equity market returns. This piqued my interest – I wondered whether a similar process could be used for valuing A-share companies in China.
keep reading
December 31, 2017
December 2017: Is China Actually Deleveraging? Yes and No.
China Deleveraging Insider tracks the status of China’s financial de-risking initiatives and the state of deleveraging.The most recent data from the PBoC and the CBRC show that bank asset growth hit a fresh all-time low in October. That means China is actually deleveraging – a little. It’s slow and slight, and done with a bit of trickery, but the debt load has shrunk in comparison to the size of the economy.
keep reading
December 18, 2017
What are the policy implications for China's economy from the 19th Party Congress?'
Pieter Bottelier—top China economist, former World Bank head in China, and stalwart CHINADebate expert—set the theme today: the crucial albeit unsung importance of elite technocrats in guiding China's Economic Miracle.
keep reading
November 27, 2017
Is China's Economic Power a Paper Tiger?
The People’s Republic of China has surely seen faster GDP growth than the United States for most of the past forty years. It's the value of that growth that's questionable. : The Chinese economy is strange in many ways. Not only is it a hybrid between private capital and state control, but very few people directly invest in the mainland — and yet everybody is interested in how the second largest economy in the world is going to develop. That’s because Chinese demand determines the prices of world commodities, and the operations of multinational companies in China impact earnings. When the yuan falls, markets across the world get jittery. China watchers accept the fact that official Chinese data is severely flawed, and often simply fabricated, yet they still use it to analyze the Chinese economy and markets because there are few alternatives. One alternative, however, is the China Beige Book International (CBB), a research service that interviews thousands of companies and hundreds of bankers on the ground in China each quarter. They collect data and perform in-depth interviews with Chinese executives.
keep reading
November 22, 2017
Will Chinese Commodities Derail The Global Reflation Trade?
[Leland Miller and Derek Scissors on why investor excitement over Chinese capacity cuts this winter is oversold, and the serious implications for the global reflation trade.] For over a year, commodities bulls have feasted on China. In the aftermath of the recent Communist Party Congress, many investors are now drooling over the prospect the boom will continue, based on Beijing’s promises to supercharge its campaigns against overcapacity and pollution this winter. If such pledges are fulfilled, the thinking goes, substantial chunks of steel, aluminum, and other refining capacity will be taken offline, rebalancing markets and providing rocket fuel to already frothy prices. 2018 could prove to be an even more amped-up version of 2017.
keep reading
November 8, 2017
Novel Data on China's Auto Loans - An Inefficient Market
The continued growth of China’s auto sales has relied increasingly on consumer credit, according to the WSJ; but, granular data is hard to come by. So, we created a process to collect, clean, and structure data from online auto loan offerings. Our findings imply that the auto loan market, like many credit markets in China, runs on two parallel tracks, and is woefully inefficient.
keep reading
October 19, 2017
'Inside China’s quest to become the global leader in AI'
'The RMB did not like the trade data at all, and it weakened immediately - over 1% today.' 'Overnight, the world has moved a little bit away from its U.S.-centric obsession about equity volatility in the United States and around the world to what's going on in China,' says Bob Savage, CEO of TRACK and member of the soon-to-be-launched China Analyst Network.
keep reading
October 11, 2017
Novel Data on China's Mortgage Loans
China’s banks are directed by the state, without irony, to “vigorously promote reasonable home ownership.” Their most recent annual reports repeatedly bury in the notes this line, or some variant of it, as an explanation for the explosion of mortgage lending over the previous 12 months. Granular mortgage data however, is hard to come by – so we created a process to collect, clean, and interpret that information.
keep reading
September 12, 2017
China’s property market risks are rising, says data expert
Price trends in China’s housing market are unsustainable, according to Real Estate Foresight chief executive Robert Ciemniak who worries that excessive leverage among homeowners could lead to a crisis. Real Estate Foresight founder and chief executive Robert Ciemniak has made it his business to gather and interpret real time data on China’s residential property market. He gives his thoughts on what’s to come in China’s housing market.
keep reading
September 1, 2017
The father of business consulting in China knows why eBay failed there
In the early 1990s, when China was still struggling to shrug off the straightjacket of its planned economy, the man appointed to lead the first business consulting firm allowed in the nation was immediately confronted with the scope of the challenge ahead.
keep reading
August 30, 2017
Is china prematurely declaring victory in its reforms?
At the heart of China's economic take-off during the last four decades is a fragile equilibrium between economic reforms and one­ party rule. The communist party has demonstrated pragmatism and adaptability - but just at a time when China seeks to fully enter the knowledge economy and participate in global markets, it has put the brake on further reforms.
keep reading
August 29, 2017
China's unsolved liquidity risk
The question we should ask ourselves is, how many of China’s corporate borrowers are paying off existing debt with new debt?
keep reading
August 22, 2017
Predicting Chinese stock returns
[The Largest Single—Factor Study of China’s Stock Markets] Outside observers paint China’s stock markets as a casino, where picking stocks requires as much skill as roulette, and investors avoid the country in their portfolio allocations. Patterns exist, however, if you know where to look.
keep reading
August 2, 2017
Leland Miller on Pressing China Issues
Leland Miller, the founder of China Beige Book, spoke with The Epoch Times about which investors and companies are interested in China, the latest developments in the currency, U.S.-China relations, overcapacity problems, and the One Belt One Road Initiative. : The Chinese economy is strange in many ways. Not only is it a hybrid between private capital and state control, but very few people directly invest in the mainland — and yet everybody is interested in how the second largest economy in the world is going to develop. That’s because Chinese demand determines the prices of world commodities, and the operations of multinational companies in China impact earnings. When the yuan falls, markets across the world get jittery. China watchers accept the fact that official Chinese data is severely flawed, and often simply fabricated, yet they still use it to analyze the Chinese economy and markets because there are few alternatives. One alternative, however, is the China Beige Book International (CBB), a research service that interviews thousands of companies and hundreds of bankers on the ground in China each quarter. They collect data and perform in-depth interviews with Chinese executives.
keep reading
July 19, 2017
China Cause America's Trade Problems?
[Malcolm Riddell's conversation with Yukon Huang] 'America's trade problems are not the consequence of China's policies.'
keep reading
July 19, 2017
Siri: 'Can The iPhone Prove President Trump's Wrong About U.S.-China Trade?'
[Malcolm Riddell's conversation with Yukon Huang] 'America's trade problems are not the consequence of China's policies.' 'How much of that $650 iPhone - which adds to China's trade surplus with the U.S. - actually originates and stays in China? — Only $25.'
keep reading
July 2, 2017
China Doesn’t Have A Real Estate Bubble.
Prices spike in a city. The government puts the screws on the market, and prices go down. Investment then switches to a city with lax policies. Housing prices spike; regulations tighten; prices go down. Investors move on. And so on, and so on.
keep reading
June 28, 2017
Will 'One Belt, One Road' Tank China's Economy?
'My fear is that Xi will see this initiative as an alternative to economic reform.'— Pieter Bottelier : But, the biggest threat in the near term is that Xi Jinping will see OBOR as an alternative to completing the economic reforms promised - but not delivered - in 2013's Third Plenum.
keep reading
June 21, 2017
China's stock markets—are there any patterns?
'I find evidence for dramatic size and momentum effects; that is, small stocks and recent winners are the top performers in China’s stock market. Additionally, I find that high-beta stocks modestly underperform low-beta stocks.'
keep reading
June 7, 2017
China's higher rates don't matter, yet
In fact, high yields still haven’t filtered down to borrowers. Using industrial enterprise economic indicators data, I estimated the actual interest rate paid by Chinese borrowers. Over the past six months – as corporate bond yields, SHIBOR, and WMP yields all rose dramatically – the actual interest paid by China’s industrial enterprises fell to an all-time low.
keep reading
May 29, 2017
Why A Trump–Kim Jeong Eun Summit Could Work
[Malcolm Riddell's conversation with Bill Overholt] 'If it would be appropriate for me to meet with him [Kim Jong-un], I would absolutely. I would be honored to do it.' — President Trump — May 2017:'What President Trump has done is to signal we are willing to move away from this formula that the North Koreans have to give up everything in their nuclear program before negotiations - only then we'll talk with them. I admire our U.S. negotiators, but that formula is simply absurd.'
keep reading
May 17, 2017
A new framework for china's debt problem
In fact, high yields still haven’t filtered down to borrowers. Using industrial enterprise economic indicators data, I estimated the actual interest rate paid by Chinese borrowers. Over the past six months – as corporate bond yields, SHIBOR, and WMP yields all rose dramatically – the actual interest paid by China’s industrial enterprises fell to an all-time low.
keep reading
May 3, 2017
An inflection point in china's systemic risk
Additionally, given the incentives of regulated institutions everywhere, it is likely that risks have simply begun to migrate to new and more opaque parts of the balance sheet. As China watchers, we should prepare for yet another game of financial risk whack-a-mole.
keep reading
April 26, 2017
Clearing up a few misconceptions on China's capital flight
Last year, I debunked a popular measure of trade misinvoicing as the culprit for China’s capital outflows. Today, let’s scrutinize two other misconceptions bouncing around the China commentator echo chamber.
keep reading

Heading

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Suspendisse varius enim in eros elementum tristique. Duis cursus, mi quis viverra ornare, eros dolor interdum nulla, ut commodo diam libero vitae erat. Aenean faucibus nibh et justo cursus id rutrum lorem imperdiet. Nunc ut sem vitae risus tristique posuere.