Biden held his first press conference of his term Thursday, saying he has no intention of clashing with China but insisting Beijing must abide by international rules. But the U.S. military is engaged in full-scale preparedness, releasing a series of reports on the Chinese Communist Party‘s military threat to the United States over the past few months.
A move by the Chinese Communist Party scares the financial community! China’s banking sector will face the risk of $600 billion in new bad loans. Multiple negative effects, Chinese tech companies suffer massive sell-offs in the US and Hong Kong stock markets, with heavy share price declines. Philips withdraws from the Home appliance market, selling billions of euros to Chinese companies.
Hong Kong’s popular Japanese brand “MUJI”, in recent years to promote cotton clothing to “Xinjiang cotton” manufacturing, Hong Kong people refuse to buy.
A move by the Chinese Communist Party scared the financial circle! The banking industry will face 600 billion new bad debt risk
In 2020, the Chinese Communist Party virus ravaged the world, in order to save the economy, the governments of Europe and the United States directly to the business difficulties of enterprises and individuals living without cash subsidies, while the measures taken by the Chinese Communist Party is through policy pressure, forcing banks to give loans to manufacturing and small and micro enterprises. This is putting China’s banking sector at risk of nearly $600 billion in bad loans.
China’s independent big data expert, Barbarian Warrior, recently wrote that the percentage of medium and long-term loans to China’s manufacturing sector will be 5.80% in 2019, rising to 6.17% by 2020. This is the first Time in the past 10 years that the share of manufacturing loans has increased.
The manufacturing loan balance rose from $9.2 trillion in 2019 to $11.0 trillion, an increase of $1.8 trillion in absolute terms, or 19.6%, the highest increase ever, after the previous annual increase in manufacturing loan balances was only between 3-7%.
This 1.8 trillion incremental manufacturing loans accounted for 9.1% of the total loan increment of 19.8 trillion, while in 2019 this ratio was only a miserable 3.6% only.
The whole financial circle began to turn in 2020, from looking down on manufacturing bosses to begging for loans from manufacturing bosses. The incident of CITIC Bank’s President Sun Deshun explains this shift very well.
The CDC’s briefing to Sun says this, “seriously violating the decision and deployment of financial services for the real economy, restricting and suppressing manufacturing loans”, which means that not lending money to the manufacturing sector can even constitute a criminal offense sufficient for the CDC to intervene.
In addition, the percentage of loan balances for small and micro enterprises has increased from 23.26% in 2019 to 23.93% in 2020. The absolute value of the loan balance of micro and small enterprises increased by 5.8 trillion, far exceeding the previous annual increase of 3-4 trillion.
According to the annual report data of major banks, from 2010-2019, the bad debt ratio of manufacturing loans and micro and small business loans, in general, is between 5-7%.
Barbarian Warriors analysis, the 2020 wave of bank loans to manufacturing and small and micro enterprises, is based on the results of strong policy pressure, approval and risk control gate-keeping is bound to be loose, the bad debt rate is bound to exceed the traditional 5-7% range, we will assume that 10%, which is a fairly conservative estimate.
5.8 trillion new loans to small and micro enterprises balance ✖ 10% = 580 billion. This means that the banking industry will face a pounding of $580 billion in new bad debt risk in 2021. This does not count the new bad debt risk from manufacturing enterprises above the scale, how the two together also more than 600 billion.
President Biden’s First Press Conference Says He Has No Intention of Clashing with China
Biden held his first press conference in office Thursday, saying he has no intention of clashing with China, but insisted Beijing must abide by international rules.
President Biden held a more than hour-long press conference at the White House Thursday afternoon to explain his plan to pursue Epidemic prevention, economic policy, immigration policy and his philosophy of governance, saying he will run for re-election in four years to defend his plan to rebuild America.
Asked about relations with China, Biden said he does not seek conflict with China, but insisted that it abide by international rules.
Biden said Xi Jinping is the foreign leader he has met with the most during his tenure as vice president and that “Xi is not democratic at heart, but he is very smart. He’s someone like Putin who believes that dictatorship is the wave of the future and that (democracy) can’t work in an increasingly complex world.”
Biden said, “I have told him (Xi Jinping) personally on several occasions that we are not looking for confrontation, that while we know there will be fierce competition, we will insist that China abide by international rules, fair play, fair practices, fair trade.”
To strengthen competition with China, Biden said he will deal with China on three fronts. First, he will triple U.S. investment in high-tech during his tenure, from the current 0.7 percent of GDP to 2 percent, to increase U.S. leadership in high-tech.
Second, Biden said he would rebuild U.S. cooperation with allies in China Policy, especially the four-country cooperation between the U.S., Japan, Australia and India, to force China to comply with international rules in areas involving the South China Sea and Taiwan.
Third, he will adhere to the values of democracy and human rights in his policy toward China, and take a stand on issues involving the Uighur minority, Hong Kong, and domestic abuses in China.
Biden also said that China seeks to be rich and powerful and wants to become the world’s number one power, and he does not oppose China’s pursuit of that goal, but he stressed that “under my watch, that will not happen because the United States will continue to grow.” Biden said.
In response to a question about North Korea’s missile launches, Biden said, “If they choose to escalate, we will respond accordingly.”
He said he is prepared to engage in “some form of diplomacy” with North Korea, “but that has to be contingent on the end result of denuclearization.”
For the first time in seven decades! U.S. military commits to full-scale war preparations
In the face of the Chinese Communist Party’s global expansionism and military threat to the United States, U.S. military generals have been testifying before Congress and issuing a series of reports on the Chinese Communist Party’s military threat to the United States and U.S. readiness for war over the past several months in the interest of preparedness and national security.
Photo: The U.S. aircraft carriers USS Roosevelt (CVN 71, far) and USS Nimitz (CVN 68, near) rehearse together in the South China Sea, Feb. 9, 2021.
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