Blackrock, The World's Largest Asset Management Co, Questioned The Theory Of "Empty China".

BlackRock, the world's largest Asset Management Co, said it did not see China empty.

A researcher named BlackRock's Investment Research Institute and corporate credit group recently released a question entitled "can Chinese depositors"? Save the world ? Can China "s Savers Save the World?" Research Report, trying to analyze the real situation of China's risks.

These researchers believe that there are currently "hate Chinese" and "Pro Chinese" The two category. The former is a commentator waiting for the collapse of China, while the latter believes that China's government policies and financial mobility will help the Chinese economy avoid going to the end of the road.

The views of the authors of the report seem to lie somewhere between the two above. They believe that China's risk is that it does not have enough funds to meet all investment requirements of its participants in economic activities, who are now fighting for funds. The report says it is important that the liquidity of the financial system, rather than solvency.

The report authors believe that China's economy is growing rapidly, which is an indisputable fact. But at the same time, there are also interest rate subsidies and the opaque banking system in China. China's real estate market may be at the end of its battle, and China's risk exposure outside its balance sheet is also expanding. (not to mention the reverse takeover of Chinese enterprises in recent weeks and the SEC's investigation.)

The authors of the report wrote that although we expressed our sympathy for these reasons for worrying about China, we still believe that some of the analysis based on this worry is not enough.

The report attributed China's economic recovery since 2008 to Chinese depositors, not the Fed. They pointed out that the high savings rate in China is a positive beacon guiding China's economic development. It is because of the existence of high Savings rate With current account surpluses, China has lost much of its loopholes that led to the collapse of the western credit system in 2008.

The author of the report wrote that people who are worried about the future of China or people who are afraid of China may not understand that most of China's increased debt has been classified as quasi financial loans, which is supported by a certain system. Under this system, the Chinese government's income is also growing and its debt level is relatively low.

The authors write that China's balance sheet is strong, and that the fixed interest rate on loans and loans has subsidized the growth of profits. The strength of economic growth is sufficient to digest the loss of loans in the most reasonable range without threatening the stability of the financial system.

Unlike the US, China's current account has a large surplus and does not rely on foreign funds. The report said that with the internationalization of RMB, China's current account will be more permeable, but the possibility of large-scale capital flows is unlikely because China has strict supervision over deposits.