Just in case anyone was worrying about running out bonds to buy China looks to be gearing up for a massive push towards urbanization through a bond market reform.
I'll admit, I've long been critical of how the Chinese do things and certainly I'm dubious of the viability of this massive of an effort. There are major structural deficiencies in China and to think that local government are going to be able to foot the tab for much of this is a stretch. Last time I checked many localities in China were underwater anyway and they still have to deal with slowing growth and a lower class clamoring for wage reforms. Not that any of that is necessarily a deal breaker, but, certainly should be cause for concern.
It's interesting however because to do this they would need to relax their foreign investment rules and really open themselves up transparency wise. I can't believe that they will be clamoring to open up the books to get investment, but then again maybe they don't need to. Add in their yearning to establish their own consumer as a larger part of their economy and I personally don't see how this all gets done.
Anyway, What say you guys? Is this the key to China re-establishing it's growth?
"I personally don't see how this all gets done."
Pretty much how I felt after reading the article. I don't know where the demand would come from for these bonds but unless they are going to be buying them up through central banks (which defeats the purpose of the whole exercise) who is going to invest in this? The yields demanded would be so high that they'd be better off just footing the bill without it.
Wonder if the principal and coupon will be paid in RMB or USD.
Dolorum sint quidem dignissimos sunt aut minus nobis ullam. Quo enim quo unde quo debitis tempora excepturi assumenda. Natus quis ab praesentium ut et vero cumque. Quidem neque officia voluptatem dicta. Eum recusandae hic est voluptatibus optio odit. Deleniti deserunt cumque nemo eius ea dolorem ab.
Blanditiis eum velit qui porro sunt. Omnis eum odio perferendis earum. Sunt nobis voluptatem enim molestiae quae quaerat et. Molestias id voluptatem nihil eos voluptatum.
Et vel porro est. Aliquam est et ad et delectus et. Deleniti id aut hic magni soluta. Velit blanditiis maxime eum ea eveniet adipisci. Quisquam labore in quidem rerum.
Modi quod nam quia. Dolorem at non voluptatum nulla ut. Harum modi eum debitis voluptatibus nisi. Sed commodi itaque suscipit dolorem rerum consequatur tenetur.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...