www射-国产免费一级-欧美福利-亚洲成人福利-成人一区在线观看-亚州成人

News >Bizchina

China faces choice between 'bad and worse'

2010-08-19 13:49

China faces choice between 'bad and worse'

Japan or the United States, it's a choice between "bad or worse" - this is the situation facing China as it decides whether to buy Japanese or US debt.

China has been buying Japanese treasury debt for six consecutive months, almost five times the total growth in new holdings during the past five years. At the same time, its holdings of US treasury bonds dropped for two months after hitting a yearly high of $900.2 billion in April.

Related readings:
China faces choice between 'bad and worse' China starts diversifying forex reserves
China faces choice between 'bad and worse' China doubles S. Korean debt holdings
China faces choice between 'bad and worse' China cuts holdings of US Treasury

China faces choice between 'bad and worse' Buying more of Tokyo's debt is risky

It is believed that Japan's debt-holding structure and the currency's strength against the US dollar are behind China's decision, although the Japanese yield rate is actually far lower than the US. Japanese treasury debt's risks seem much higher than that of US debt. The ratio of outstanding debt to GDP is about 90 percent in the US while it is as high as 200 percent in Japan.

However, Japanese debt has a unique holding structure, with only 5 percent of the total issued held by outside investors while 33 percent of US treasury debt is owned by foreigners. Because native investors don't have currency exchange risks, the structure of Japanese treasury debt means it is more secure than the US.

Another main potential risk for China in holding foreign government bonds is that the currency may depreciate as the US dollar did since the eruption of the global financial crisis. However, the yen continued to rise in the past three years, up 27 percent against the US dollar.

The yen and gold are the only two commodities whose market price is higher than before the crisis.

The appreciation of the yen comes from Japan's surplus current account, large overseas net assets and the need for international arbitrage.

After the crisis, excessive demand for the yen boosted its price. The yen's short-term price will remain strong against the US dollar.

Japan has a low yield rate of 1 percent and policy risks such as a liquidity trap, a financial deficit and aging problems while US has a weak currency but a 3 percent yield rate and favorable long-term expectations regarding its economy.

In fact, Chinese investors have not given up on US treasury bonds. Though the buying of short-term debt dropped, holdings of US long-term treasury bonds increased by $88.5 billion in the past ten months.

To solve the problem completely, the nation should reform its economic structure and currency management mechanism if it wants to prevent a "twin surplus" in both its current and capital accounts.

The author is a researcher with Shanghai Institute for International Studies.

Related News:

主站蜘蛛池模板: 我要看一级大片 | 国产成人精品精品欧美 | 色综合日韩 | 国产欧美日韩精品一区二区三区 | 精品一区二区三区波多野结衣 | 欧美一区二区精品系列在线观看 | 欧美精品束缚一区二区三区 | 在线观看免费av网 | 日本 国产 欧美 | 韩国美女高清爽快一级毛片 | 国产男女免费视频 | 精品国产三级在线观看 | 国产成人精品在线观看 | 亚洲福利国产精品17p | 免费观看呢日本天堂视频 | 国产在线综合视频 | 国产一级毛片视频在线! | 亚洲区精品久久一区二区三区 | 精品一精品国产一级毛片 | 亚洲综合在线观看视频 | 99久久精品国产一区二区小说 | 99爱视频免费高清在线观看 | 九九成人 | 亚洲国产精品一区二区九九 | 成人国产在线视频 | 美国一级毛片完整高清 | 亚洲一区二区中文 | 亚洲成人视 | 中文字幕在线观看一区二区 | fc2ppv在线播放 | 国产在线观看高清不卡 | 欧美成人极品怡红院tv | 国产精品美女视视频专区 | 一级成人a做片免费 | 在线观看国产一级强片 | 北岛玲亚洲一区在线观看 | 国产成人禁片免费观看视频 | 一区二区三区欧美在线 | 欧美国产日韩在线播放 | 久久精品欧美日韩精品 | 欧美成人3d动漫专区 |