Chinese banks find their credit in high demand(no more T-bills)

WP ^ | 01/02/09 | Ariana Eunjung Cha

[TigerLikesRooster]

Chinese banks find their credit in high demand

By Ariana Eunjung Cha

Washington Post Foreign Service

Saturday, January 2, 2010; A01

BEIJING -- China's state-owned banks have become a main engine of the global recovery, financing the construction of copper mines, purchase of airplanes, expansion of retail stores and other projects even as their U.S. and European counterparts scale back lending.

The surge in Chinese lending, triple the 2008 rate, has provided a lifeline to international corporations during the worst recession in decades, and it reflects a diversification in China's global economic role beyond its holdings of vast amounts of U.S. government debt.

Over the first nine months of 2009, new lending by Chinese banks has injected $1.3 trillion into the world economy, according to statistics from the People's Bank of China, which functions as China's central bank. The beneficiaries have included U.S.-based Southwest Airlines, the Netherlands' Aercap airplane leasing company, Civil Aviation Authority in Dubai, and Foster's brewery and Woolworths supermarket chain in Australia.

China's banks have been signing so many new loan contracts so quickly that the country's banking regulatory commission recently warned them to avoid the "blind" pursuit of size lest they run into the same troubles as their Western counterpar

[TigerLikesRooster]

Ping!

[Vaduz]

If China banks fail they will have to call in Obama’s IOU’s and we don’t have the money,so I wonder what Obama will give them was it a set up from the get go?????.

[TigerLikesRooster]

T-bills in China's possession are pretty much worthless in the end. China would try to phase them out gradually. However, it won't be an easy task. Who would buy those T-bills in large quantities except U.S. Treasury or Fed? If they balks, China loses big and U.S. dollar will plunge overnight.

Both countries will be mutually destroyed financially.

[expat_panama]

For years Obama's told us that our enemy was 'fat cat investment bankers' and that Mao was another Mother Teresa.

So, what's it going to be now, are we supposed to start hating the Chinese or do we start liking banks?

[TigerLikesRooster]

Well, it is not an ‘either-or’ proposition.

[djf]

Not quite what we are seeing here.

Chinese banks making in situ loans means they are becoming less dependent on income from the west, and are less dependent on American consumers.

If they are big enough, and produce enough, and internally consume enough, they can basically tell us enuff is enuff!

Then, what does Mr. UAW in Detroit say?

[Vaduz]

The dollar plunge would give them the upper hand to call in the t-bill debt I wonder what Obama would give the in trade??China can take the hit but still be strong.

[djf]

In the face of a declining dollar, they might be better to divest it now!

[TigerLikesRooster]

I think, instead of spending money on T-bills which could become worthless, Chinese want to reallocate money into loans to viable foreign companies. That would make a better source of investment income.

[djf]

Resources. Africa. The Caribbean.

I have long thought 200 million Russians don’t stand a hoot of a chance against China, and Russia is loaded with oil and minerals and agriculture (and doesn’t have the manpower to get it)!

[TigerLikesRooster]

what Obama would give the in trade??

Probably nothing.

China can take the hit but still be strong.

Not sure about the 'strong' part. They could hunker down and ride out the storm if they choose to, but it is politically untenable for Chicom. On top of that, massive stimulus by Chinese gov made Chinese hooked on asset bubble. What started as a defensive economic policy to contain the fallout from world economic crisis is now turning into a disaster.

[TigerLikesRooster]

That is what Russian nuke is for.

[expat_panama]

Aw heck, for me I’m happy doing business with both bankers and the Chinese. My post had to do with Obama’s hatred for banks and his adoration of Mao —wondering how he planned to reconcile to the two.

[djf]

From a strategic viewpoint, though, it makes far more sense for China to tackle Russia than us.

They would get hit either way. But Russia is right there, there are not those big lakes in the way.

Besides, then they get the best of both worlds. Access to all the stuff in Russia, and they still keep us as Wally World shoppers.

America has long had a tendency to see Russia and China as being kinda the same, because of communism. But I do not think that is true at all.

If you were to ask me personally, I still think it will come down to US and USSR against China.

[djf]

BTW, and I think the Chinese know that.

[Vaduz]

Unlike the U.S they save at least 40% of revenue for emergency events we on the otherhand keep spending and our debt is a money pit,I don’t trust Obama & Co. one bit they will sell out in a heart beat my main question what is Obama going to give them when thet call our IOU?

[TigerLikesRooster]

As I said, he is likely to stiff China by ignoring Chinese demand.

[winodog]

I would give them FRN, with bigger numbersand clown faces.
Barry will probaly deed over all the federal land in the West.
But in reality, I suspect the stage has been set and Barry will follow the script. Theres gonna be a new world order, everyone will join, debts will be forgiven and you get a cool chip implanted that is your new passport/ID, money card, health card, etc.
How wicked is that?

[djf]

Just give them health care!

Then he can win another Noble Peas prize.

[winodog]

Thanks for all the news and the different prospective you have shared over the years.

Do you have a future outlook? I dont mean to pin you down to precise facts. Just in general, especially any nuke stuff! : )

[TigerLikesRooster]

For now, N. Korea needs lots of outside aids. Chia Head dumped new monopoly money onto population. It was not supposed to be that way, but backlash against currency reform was so bad that some report says that N. Korean gov. gave each household enough money to last 10 months. Now somebody has to provide goods they can purchase with those new money. They can only come from outside. Chia Head is likely to visit China again and have summit with S. Korean President. He will try to secure enough goods to placate his population by agreeing to some nice-sounding (verbal) commitments and make a photo-op with leaders of N. Korea's neighbors.

As for nukes, there will be probably no real changes. Negotiations will bog down. N. Korea wants peace treaty followed by 'mutual nuclear arms reduction.' That is, U.S. has to recognize N. Korea as a nuclear power and then haggle about how many missiles or bombs N. Korea should give up (in return for the same move by Americans.) If this thing does not go well (it won't,) I think there will be third nuclear test sometime next year.

[rockstar01]

http://tieba.baidu.com/%D6%D0%BB%AA%B3%C7%CA%D0/tupian There is a lot of photos about China！That will change your mind about China.

[MEG33]

http://tieba.baidu.com/%D6%D0%BB%AA%B3%C7%CA%D0/tupian

[1rudeboy]

You can’t “call in” T-bills.

[FreedomPoster]

I expect that Siberia has an illegal immigrant problem that makes our problem with illegals from the south look like small potatoes.

[InternetTuffGuy]

We can pay China in bars of tungsten. Peter Schiff (R) to beat Dodd this year comes out and admits we can't pay them back.

http://www.youtube.com/watch?v=NkEtArDFNYA

[Gritty]

If China banks fail they will have to call in Obama’s IOU’s and we don’t have the money,so I wonder what Obama will give them was it a set up from the get go?????.

That's easy. Just run the printing presses and buy the bonds back. Problem solved!

Of course, the dollar will be destroyed and inflation will be running in hyper-drive but, hey, one has to break a few eggs to make an omelet, right?

[grey_whiskers]

Over the first nine months of 2009, new lending by Chinese banks has injected $1.3 trillion into the world economy, according to statistics from the People's Bank of China, which functions as China's central bank.

The People's Bank of China says it is financing makework/Potemkin Village "Hero Projects" in China.

Doesn't matter, without a middle class there.

Cheers!

[grey_whiskers]

China doesn't have the nukes, nor does it have the population, to take on both us and Russia.

And India as a "mass of bodies" counterweight...?

China is more screwed than their propagandists let on.

Cheers!

[TigerLikesRooster]

Economic tide reversed, and it is exposing intractable systemic flaw and exacerbating pathologies of Chinese economy.

Their model geared up for ever-rising foreign demand sustained by continued growth of world economy. However, we are past full capacity and in the realm of overcapacity, which cannot be met by Chinese domestic economy. Chinese economy is now in uncharted territory.

[XEHRpa]

>>> If they balk, China loses big and U.S. dollar will plunge overnight. Both countries will be mutually destroyed financially. <<<

I’m reminded of the adage, “if you borrow a little money, you are a debtor. But if you borrow enough money, you are a partner.”

[LomanBill]

>>Both countries will be mutually destroyed financially.

 

So...

 

Eat more (dollars,) Chinese!

[Vaduz]

Agree

[Vaduz]

That new world order thingy bothers me they can’t even run a country right and yet they want the world.

[Vaduz]

It would be his last voluntary act on earth,may not be a bad thing.