Many noted China's immense accumulation of foreign currency reserves, most of which were in dollars.
Many asserted that China's outsize holdings of US Treasury debt instruments, and holdings of US government sponsored agencies debt, made China the banker for a declining, decaying, US capitalism that was parasitic not just upon the labor of workers inside and outside its borders but parasitic on the "emerging market" capitalisms-- the BRICS-- with China the biggest brick in the bloc.
A few disagreed.
A few argued that China held US currency reserves, that it invested those holdings in US debt markets; but...
In reality, China owned almost none of those currency reserves.
A few argued that China's holdings of US debt securities were nothing more than reserves against claims made upon it, China, by capitalists foreign and domestic for their hard currency earnings generated through foreign direct investment, through production for export.
A few argued that the People's Bank of China held in essence demand deposits.
A few argued that China invested in US debt securities because those securities were liquid, that China's currency reserves were, in essence, friable, requiring but little pressure to crumble and become a river of dust, draining away.
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The Wall Street Journal, Thursday, January 28, 2016
Beijing Moves to Slow Money Outflows
China is ramping up efforts to halt a flood of money leaving the country in response to an economic slowdown, moves that risk undermining Beijing's ambition to elevate the yuan's profile on the world stage.
Its latest steps involve curbing the ability of foreign companies in China to repatriate earnings, shrinking the pool of Chinese yuan available for banks in Hong Kong to make loans, and banning yuan-based funds for [sic] overseas investment, people with direct knowledge of the matter said.
The measures, most of which haven't been publicly disclosed, follow efforts by China's central bank to discourage investors from betting against the yuan and to crack down on overseas money transfers. They're sparing no effort to prevent capital outflows,' said a senior Chinese banking executive close to the the central bank..."
The people with direct knowledge said the People's Bank of China, the central bank, also is considering ways to lure money back to the country, including letting foreign residents and companies buy certificate of deposit for fixed periods. Currently they are restricted to ordinary deposit accounts....
In its latest efforts, the central bank instructed banks on the mainland to require more detailed documentation from corporate customers to remit profits back to their home countries...
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January 28, 2016