China's debts hit 28t yuan

Discussion in 'Markets & Economies' started by millededge, Jul 13, 2011.

  1. millededge

    millededge Active Member

    Joined:
    Sep 4, 2010
    Messages:
    2,386
    Likes Received:
    21
    Trophy Points:
    38
    Location:
    camp x-ray, spelling division
    Updated: 2011-07-12 17:36

     
    millededge, Jul 13, 2011
    #1
  2. Clawhammer

    Clawhammer Well-Known Member Silver Stacker

    Joined:
    Feb 26, 2010
    Messages:
    8,809
    Likes Received:
    72
    Trophy Points:
    48
    Location:
    Gone Fishin'
    But who do they owe it too?
     
    Clawhammer, Jul 13, 2011
    #2
  3. projack

    projack Well-Known Member Silver Stacker

    Joined:
    Aug 12, 2009
    Messages:
    3,354
    Likes Received:
    598
    Trophy Points:
    113
    Location:
    Brisbane
    When Chinese companies sell internationally they receive USD. They take that USD to the banks to get Yuan. The Yuan is borrowed into existence, but at least has the collateral USD invested in US debt. So if the US defaults, everyone will default so this is a hedge like insurance policy.
    I can be wrong, but makes sense to me.
     
    projack, Jul 13, 2011
    #3

Share This Page