Somewhere in 2022, there’s a magnificent market drop coming, with a lot of Chinese banks holding mortgage situations about to fall apart. You put this with Covid problems and port issues...it just promises to be a fairly chaotic period for three or four months.
Don’t think they’ll have much choice. Every other central bank in the world has already raised rates.
A 0.1% interest-rate change?
(AKA 10 basis points)
You sow the wind you reap the whirlwind.
Chinese banks have under the direction of the Communist Central committee have allocated and squandered huge amounts of capital by make loans to fuel a huge urban construction boom. Also the economically non productive armed forces have consumed huge amounts of capital with procurements. Unfortunately these projects have not been profitable, nor have they made a credible return on investment. In fact many remain empty and are deteriorating before they were ever occupied. The banks have papered over the loans or there would be massive defaults. If anything interferes with Chinese exports and the intake of foreign capital in the form of hard currency and investment, the Chinese economy would soon collapse. The only way for China to control this situation and avoid a catastrophic inevitable collapse is a carefully planned bankruptcy proceeding on a nationwide basis.