China has been waging economic warfare via equity markets for a while now. The U.S. hasn’t done anything to protect investors from billions in losses. Totally embarrassing.
B) Why should the US do anything? If your risk profile when dealing with Chinese companies doesn't include the risk that the CPC will change the rules of the game later to benefit the domestic economy, you're a sucker.
A) I'd suggest that there are a wide variety of options here, reciprocal actions are common in diplomacy, so for instance the US could default on an equal amount of US debt that China holds, or perhaps pass a law that in the case of the bankruptcy of US companies bonds owned by Chinese nationals at any time after the proposal of said law (to avoiding them just selling them) are void.
Of course these options (and probably any other options you imagine) would have pretty wide reaching side effects - to the extent that I'm not even sure they are worth the cost - but they definitely exist.
B) Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade.
The United States government defaulting on any amount of its debt would be really really really stupid policy.
> Because transfer of wealth from US investors to China harms US interests, the US government exists to serve US interests and part of that is standing up for their nationals in international trade.
I am not convinced apriori that this is the case, and don't feel comfortable having politicians who definitely have no clue whether that is the case making the calls.
The market has a way of dealing with this. Chinese corporate debt is currently trading for pennies on the dollar. Chinese companies are going to be essentially locked out of global credit markets for the foreseeable future.
> The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.
The US defaulting on any debt is unconstitutional.
If private investors want to invest in China, that's fine. But pensions and banks should not, and should not be investing in funds that do. Their risks are shared, and China trashing their balance sheets is a public policy concern.
> But pensions and banks should not [invest in china], and should not be investing in funds that do.
It could be argued that pensions should not be investing in risky bonds (or assets), but this idea shouldn't have anything to do with china specifically. Institutions that can't absorb these risks should not take them.
Just because it's china related, doesn't mean that the gov't should have a specific policy to prevent it from happening (but allow these institutions to invest in other, equally risky assets). To allow such policy to be set is to turn investment into political weapon. I do not want to see that.
For A) the U.S. should delist all Chinese ADRs to start. There were literally billions of stock in completely fraudulent companies being sold on U.S. exchanges.
A) Fight back by limiting Chinese expansion with US financial influence. Sanctions, etc.
B) The US should do something, because if they don't, China will continue to take advantage of US ineptness. States have powers which investors simply don't have.
US government ineptness? Or US citizen ineptness. It's not the government buying this debt
Now what, the government stops people from trying to make a quick buck on a high risk investments? We can start from stopping Americans from paying 7 figures for digital drawings of monkeys
> We can start from stopping Americans from paying 7 figures for digital drawings of monkeys
NFTs are even more moronic than that: they are nothing more than links to external content - Tweets, images, videos, whatever. Meaning that everyone who wants to see and reproduce the content you paid a million dollars for only has to download and dump the corresponding blockchain... and also meaning that you are the proud owner of a bit of nothing when the external hosting service goes down.
If you ask me, NFTs are a combination of tulip mania, scams and good old-fashioned money laundering using art.
There is other value than the current outlook on NFT's. It is a record of a digital thumbprint. This is really the value of all blockchain based tech.
The example i use is this. Think of the Green Rolling Hills photo that was on however billion windows desktops. The original owner could have copyrighted that photo and registered its first upload onto the blockchain. It is registered then as the first photo of a very specific high use photo and i would say that digital asset has a value.
Crypto Kitties etc are not my cup of tea, its the value created by the option of the tec that i think will have ramifications. I am working on a project in this space currently.
Why do you need a blockchain with all the environmental waste (CO2 from electricity generation as well as heaps and heaps of eventually discarded mining equipment) for the purpose of maintaining who is the owner of the copyright for a piece of work?
That's what the US has the Copyright Office for ffs!
> US government ineptness? Or US citizen ineptness. It's not the government buying this debt
You are focusing on this one type of transaction whereas the reality is that the Chinese state exercises influence in a lot of other areas where US investors have no control. Say, for, example using state-sponsored hacking and espionage to give an unfair advantage to their investors on the international free market. Something US investors could go to jail for if they tried to do. I repeat, if the US doesn’t fight for US investors interests, China will nonetheless fight for theirs.
If the US intervenes, they're branded as interlopers. If they don't, they're branded as inept. Seems like they're fucked either way in the eyes of the rest of the world.
I want to understand that second sentence better. Is it the same sentiment as the Bukowski quote stating “The problem with the world is that the intelligent people are full of doubts, while the stupid ones are full of confidence”?
If we hamfist "politics" to mean nothing but culture war noise, then sure, economics and politics are separate. I always thought that people were smarter than that.
I guess it's "warfare via equity markets" if you didn't exit the trade soon enough.
But what would you call it when American investors make boatloads of money investing in Chinese stocks? And should the US regulate away their ability to earn those returns?
Since US investors can also lose money when US companies default, should investors also be prevented from investing in those too?
Incidentally, this "protect investors" logic is the same reason for the accredited investor regulations that prevent the masses from investing in startups.
If a large group of innocent US citizens that ventured to China for tourism reasons were shot down by CCP police would you say the government should stay out of it, instead blaming them for trusting China?
if those large group of people agreed to be shot at, for a chance to get a lot of money in return, then they made their own choice and must live with those consequences.
Unless there's some element of fraud undertaken on the part of a national gov't (like CCP), which only the US gov't could present as a counter to, there should be no intervention from the US gov't about the defaults in china and the investment losses incurred to US citizens.
how about not let people invest in companies that are Chinese? since the CCP bans them from being listed anyways, now when you invest in Chinese companies your investing in some fake company in the Bahamas ...
The U.S. shouldn't protect investors from the free market? That's the free market at work. Investors are not entitled to be paid. All investments carry risk.
it did - some people left holding the bag lost out. The banks were playing the middleman, they weren't the ones taking the risks.
It could be said that the rating agencies were complicit, since their ratings were trusted by various parties by assumption and did not do their own due diligence.
From a US government perspective, the options are either let people invest their money in China or not let people invest their money in China. To let people decide on their own if investing money in Chinese companies is worth the risk seems to me to be the more free market option than our government forbidding it. That China can then pull the rug out from under you is the risk you take due to your choice of investment, if we wanted the government to protect people from that risk it should have been done before investment happened, not after.
free market where if i want to invest into a Chinese company i have to invest into a fake company in the Bahamas? If i want to really invest into China there are crazy rules and in the end they will just take your ip...
How is Evergrande's foreign debt default translate to "waging economic warfare via equity markets"? Of course China is responsible for its own domestic debt, because evergrande borrowed from state-backed banks. Are foreign debters also backed by Chinese government? Are you suggesting Chinese government should take responsibility for foreign investors?
And "for a while"? Name another case remotely matches "economic warfare".
Since you asked, China basically had an inside man in the Californian pension system and purchased a large amount of Chinese tech stocks. Beijing then pulled the carpet out from under them, causing 400B in US pension losses: https://www.google.com/amp/s/californiaglobe.com/articles/us...
OP makes a complicated allegation. I don't care enough about the allegation to devote the mental effort to understand it or to determine if the source cited is bogus. Generally I have more regard for the opinions of careful thinkers. Pasting an untidy URL is a sign of sloppy thinking.
Assuming that you are trolling, one advice in this situation is that you can curb the urge to post something on your phone, which restricted your flexibility and causes the tendance to post things with little context and concrete meaning, and wait until you have access to the right tool for expressing yourself.
It is not easy.
At the spot of seeing something that you feel strongly, it's an exercise of strong will to actually have a clear mind and use rationality to communicate.
Emotion is the fuel of mental activity. It likes to explode. The mind's role is to place it on steady pace, and generate power that actually changed things, instead of just exploding on spot.
Now sure how to connect the dots from your article to the claim that China "waging economic warfare through equity market".
Facts:
* US pension fund lost 400B on China investment. That's total in US not directly related to the "inside man in the CA pension system". But wait for others facts below.
* This CA pension system inside man "Yu Ben Meng" is chief investment officer of CA public employees retirement system (CalPERS). He "has long and cozy relationship with China". Because he was recruited into the "thousand talents" program.
* CalPERS invested 3.1 billion into Chinese companies. The amount lost because of them us undisclosed in the article.
Back to your statement:
> China basically had an inside man in the Californian pension system
He is recruited as thousands talent program. The relationship is claimed to be academic.
When his investment decision into Chinese companies on behalf of Cal PERS is unknown. To substantiate your statement, at least, based on the known facts, there should be a casual connection between his recruitment to thousand talent program, and later decision to invest into Chinese firm.
Further, the investment gain from this investment needs to be negative or noticeablly below market norm to actually give any doubt that such investment was not driven by sane investment assessment.
> Beijing then pulled the carpet out from under them, causing 400B in US pension losses
It's strange to paint this as a economic warfare.
Why is regulatory action with the intention to curb private corporations' influence (as western media like to portrait), being transformed into economy warfare.
Of course, it's not a stretch to claim that in this action, CCP indeed achieved the purpose of economic warfare.
But that's just usual international business. US fed has already caused global financial crisis, because of their domestic policies. For multiple times over the 20 and 21 centuries.
Did US wage economic warfare against all other nations on earth? (Because of US dollars' supremacy)
If one admit US is wagging war, then sure, China is also waging a war.
Call this whatabohtism.
But at least make it clear that this is not some Chinese specific evil. This is a universal evil.
As a Chinese myself, I don't want to be the spagagoat once US China got into an actual war. CCP is as bad as USA, thats not any Chinese fault.
And who is not investing in China? Ray Dallio? He must be a more China inside man. As he is not only investing in China, he openly claim it's still good to invest in China!
Mr. Yu Ben Meng, aside from being a Chinese, is he doing more pro China than Mr. Dallio? I cannot find any such evidence from your article.
So the reason call him a China inside man, is just because he is a Chinese?
Tell me, except the word "racism" what should I use to describe this reasoning?!
Sorry, that’s a lot of words that doesn’t address anything. This guy is under investigation because of his actions. Bringing up a bunch of irrelevant facts just serves as a distraction. Seriously, the U.S. causing the global financial crisis is your counter argument?
Should I spend time engaging with this guy who appears not reading, or cherrypicking statements, or plainly trolling?...
I think the one sentence explanation is that your statement is plainly racism.
Even in this post, you admitted that "This guy is under investigation", yet you are able to use a unsubstantiated charge, and blow it into China economic warfare, and label that person as "China inside person".
> that’s a lot of words that doesn’t address anything
I think the original accusation is a bit of a stretch. Alot of funds of all sorts have diversified and invested in China which makes sense since China is the world's second largest economy.
