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China's current demographic dividend has shifted from cheap workers to expensive pensions

 China's manufacturing industry has created one miracle after another in the past few decades, which is inextricably linked to China's demographic dividend

 Once made in China was an important support for China's economic development, and now Southeast Asian countries are beginning to make efforts in the middle and low-end manufacturing industries. And by China's family planning, labor force comprehensive quality improvement and other factors, China's demographic dividend advantage is gradually losing.

 Uniqlo, Nike, Foxconn, Samsung and other world-renowned companies have opened new factories in Southeast Asia and India, moving out of China. In recent years, Dongguan, known as the manufacturing capital, has closed hundreds of large factories.

But do you think the demographic dividend is over? The second demographic dividend

 When a country or region accounts for 10% of the population over 60 years old or 7% of the population over 65 years old, it means that the population of this country or region is in an aging society.

 At present, Japan is the world's most aging population, the proportion of people over 65 years old reached 27%, ranked first in the world, while Italy 23%, Germany 21% ranked second and third.

 2019 global population aging problem intensified, China's population aging growth rate of the world's first!

 For today's China, the population base is large, the economic development is also advancing by leaps and bounds, but the per capita proportion is small, also faces the population age question, has become the economic development a resistance.

It is expected that by 2030, China's population over 65 years of age will exceed that of Japan, becoming the world's most aging country. In 2050, society will enter the stage of deep aging.

 With the acceleration of the aging process, the resources of nursing homes in China are gradually in short supply. Many investors have seen business opportunities in nursing homes.

 Now the pace of urban life is relatively fast, young people's work is busy, life pressure is great, there are many people do not have time and energy to take care of the elderly at home, so choose to send the elderly to nursing homes, I hope the elderly can get more professional care.

 Now the general nursing home charge is basically made up of nursing fee, accommodation fee, board fee, basic medical reserve fee, and so on several aspects, comprehensive these items, the ordinary nursing home charge is about 5000 yuan per month, of course, the cost will also be local standard, and the actual situation of the elderly have a certain relationship.

 Some mobility inconvenience, life can not take care of the elderly, fees can reach about 10,000 yuan if a nursing home can recruit 30 people, then a year, nursing home investment costs can be earned back.

The Economic Reference has published an article entitled "Pension, education, medical care is expected to stimulate domestic demand" troika "article. At present, the rigid demand in the fields of old-age care, education and health care is explosive

 In the first-tier cities, it is understood that the phenomenon of "one bed is difficult to obtain" in nursing homes is more common, and the contradiction between the demand for a blowout and the shortage of supply is becoming increasingly sharp.

 "Behind the big problem is the big opportunity, as long as the measure is appropriate, the endowment will become the new motive force of economic development quickly ." Zhang Kai, vice president of the China Association of Aging Industry, said.

 As a pioneer in the pension industry for more than 10 years, Hunan "Chinese Care" Company CEO Longpan believes that the pension industry is likely to become the next industry after the real estate "rich mine ".

 Zhao Baoquan, president of Happy Old People's Daily, believes that the "middle class" consumption capacity of the first cities that are aging is relatively strong, and the consumption will is strong, and they are eager to enjoy professional pension services.

Shanghai's richest man is also short of money?

On July 27, Moody's, a rating agency, downgraded Fosun International Ltd.'s corporate family rating from quote Ba2" to quote Ba3".

 Moody's said the downgrade was due to Fosun's high and increasing debt leverage; long-term investment dependent on short-term funds; low-interest coverage at the holding company level; and increased risk of credit contagion.

 On July 28, Fosun said in a related reply that the rating downgrade quote was overly pessimistic quote;, overestimated the difficulties faced by Fosun and underestimated the ability of Fosun quote; to resist anti-epidemic risk & quote;, as well as the resilience of its fundamentals and business sector structure.

 Fosun International is a listed company of Shanghai's richest man, Guo Guangchang, according to public information. According to Hurun in 2019, Guo ranked 45th with a value of 57 billion yuan.

 According to Fosun International's 2019 report, Fosun International's total liabilities are 534.757 billion yuan, net assets are 18.0924 billion yuan, and the ratio of assets to liabilities is 74.72 yuan.

 Since 2014, Fosun International's financial leverage has been above 70 percent.

 Fosun International's short-term debt-servicing risk has soared because cash and cash equivalents do not cover the short-term debt. The continuous decline of operating cash flow indicates that the ability of "hematopoiesis" is insufficient and the financing channels are smooth, which is very important to Fosun International.

High leverage, Moody's downgrades Fosun international rating outlook to negative
 Moody's downgraded Fosun International Ltd.'s corporate family rating (CFR) from & quote Ba2" to & quote Ba3". in a recent rating adjustment

 Meanwhile, Moody's downgraded Fortune Star (BVI) Limited's senior unsecured debt rating from & quote Ba2" to quote Ba3". The bonds are guaranteed unconditionally and irrevocably by Fosun International.

 Lina Choi, Moody's senior vice president, said :& quote downgrade and negative outlook reflect Moody's expectations that Fosun's business will continue to face a challenging operating environment in the coronavirus-induced economic downturn, putting pressure on its weak liquidity and maintaining a high leverage ratio over the next 12-18 months quote ;

 On July 28, Fosun Group's official public name issued a statement:" in the short term, we do not deny that Fosun International has been implicated in the epidemic, this force majeure is inevitable. The Moody's downgrade of Fosun's international rating, we believe, is the future of Fosun has an overly pessimistic presupposition or estimate ."

 The Fosun Group said that judging Fosun's actual perception of debt risk by the level of data and the change of debt structure is more like a false professional misjudgment quote

Net operating cash flow continued to decline, foreign media reported that Fosun sold rookie equity to withdraw funds

 At the holding company level, Fosun International's liquidity (measured by adjusted operating cash flow interest)/interest coverage is weak, Moody's said. Moody's expects the ratio to remain well below double over the next 12-18 months, as its recurrent income (i.e. dividends mainly from base investments) will not be sufficient to cover its interest and operating expenses.

 It is worth noting that in recent years, Fosun's net operating cash flow has been declining year after year. In the last three years, the index is 30.453 billion yuan,13.302 billion yuan, and 7.834 billion yuan respectively. It can be seen that its ability to operate and obtain the cash is deteriorating, and its ability to guarantee debt and interest is declining.

 In the case of insufficient hematopoiesis, Fosun international debt service mainly depends on external financing. However, in 2019, Fosun net international financing cash flow from net inflow to net outflow, a significant outflow of 4.754 billion yuan.

 Another sign of the deteriorating financing environment is the rise in corporate lending interest rates, which ranged from 0.5 percent to 17.65 percent in 2019 and from 0 percent to 9.8 percent in the same period in 2018.

 In addition to the income brought by the change of fair value, the actual dividend income is not enough to cover the interest expenditure. In 2018-2019, Fosun International received interest and dividends (investments) of 2.265 billion and 5.868 billion, respectively.

 Aware of liquidity problems, Fosun International took measures to speed up asset recovery, which once triggered speculation about its capital constraints.

 In June, Reuters reported that Fosun International was negotiating with Alibaba and others to sell its shares in the smart logistics network rookie for a $20 billion valuation. Alibaba, Cainiao and found declined to comment on reports of the transfer of shares.

 Cainiao's stake was acquired by Fosun International in 2013 at 500 million yuan, accounting for 10 percent. In 2019, Alibaba announced an investment of 23.3 billion yuan in capital and old shares, increasing its stake in Cainiao from about 51 percent to 63 percent, while fosun's stake was diluted.

 According to the annual report, Fosun currently holds 5.81 percent of rookie shares, which are valued at $1.162 billion.

 In addition, on the evening of July 6, Guangdong High-Speed A announced that shareholders Yadong Fosun Asian Federation intended to transfer 202 million shares of the company's shares to Shandong High-Speed Investment Development Co., Ltd., a wholly-owned subsidiary of Shandong High Speed by agreement. It accounts for 9.68% of the total share capital of the company.

 According to public information, The controlling shareholder of the Fosun Asian Union is Nangang Union, The actual controller is Guo Guangchang, Guangdong Expressway A" Cohesion quote; Because of the total price of more than 4 billion yuan in 2015 major asset restructuring. At that time, the additional price was 4.94 yuan, As of 3 July this year, Guangdong High-Speed A closed at 7.15 yuan, Based on the calculation of East Asia Fosun Asian Union holding four years floating earnings 45, It's about 446 million yuan.

 Will Fosun sell more assets to cut debt? CNMOULDING will continue to pay attention to.

Per capita disposable income in Shanghai

Recently, the National Bureau of Statistics website announced the first half of 2020,31 provinces residents per capita disposable income.

 In the first half of 2020, Shanghai residents are proud of their disposable income of 36600 yuan(around 5250usd) per capita. Beijing followed closely, with a per capita disposable income of 34600 yuan in the first half of the year. Shanghai and Beijing are the only members of the "30,000 yuan club "of per capita disposable income in the first half of the year.

Here is the definition of per capita disposable income:

 Per capita disposable income in real life often used to refer to per capita disposable income, strictly speaking, this use is not accurate. The disposable income of the residents is the sum of the final consumption expenditure and savings that the residents can use for the discretionary income. Includes both cash income and in-kind income. According to the source of income, disposable income includes four items: wage income, net operating income, property net income and transfer net income. In other words: excluding social security, provident fund, personal tax and a series of accounts payable, the rest of the money is your disposable income

 I know that when this per capita data comes out, a large number of people say: how can I be averaged? Where do I get that much money? I'm dragging my feet again!

 But is this per capita disposable income really higher than the actual situation this year?

My first feeling about per capita disposable income in Shanghai is that the data is low.

 This is not to say that my salary is high but relative to the consumption in Shanghai.

 The National Bureau of Statistics has released per capita disposable income and per capita consumption in cities in the first half of the year.

From the statistical data, in the first half of the year, Shanghai people were the ablest to consume, and the per capita consumption expenditure again exceeded 20,000 yuan, which was also the only city in the country to break through 20,000 yuan.

 Beijing, Zhejiang, Tianjin, Guangdong, Jiangsu, Fujian, and Chongqing are located in the 10,000 yuan ladder, the remaining 22 places per capita consumption expenditure is below 10,000 yuan.

 The per capita disposable income in Shanghai in the first half of the year was 36577 yuan, and the per capita consumption expenditure was 20112 yuan. Although Shanghai earns the most, it also spends the most.

 Why can spend so much money in Shanghai? Let's make a simple calculation.

Dinner

 According to Shanghai consumption level: breakfast lunch =30 yuan,30*30=900 yuan

 This is already a very economical algorithm, plus overtime dinner, supper, weekend dinner and so on that can be more than 900.

 Transportation

 Commute to and from public transportation, compromise even 6 good, occasionally bad weather, bad mood and so on hit a car  Even 200! 21 working days*6 200=326 yuan

 Shopping consumption. Everyone thinks that girls buy strong, but in fact now boys in shopping is also unwilling to show weakness!

 Game clothes, shoe bags, monthly wages to hand, the first is to lose the shopping cart stored in the baby. Don't tell me,1000 yuan is always required.

 Human expenses

 Friends' birthday, colleagues married, these irregular factors, although not necessarily every month, but when met is a big expense, the average down to 500 yuan per month is absolutely no exaggeration.

 Love Fund

 Love is very beautiful, but the cost is not small, after all, is not ancient, flower watching the month can be fixed for life, modern life is where to spend money, said before the cost of a date in Shanghai? 800 yuan! All kinds of fees: rent, utilities, internet, telephone, membership account fees. If you say you're single, love money does n' t exist. So, at least sleep? The rent can be expensive, in Shanghai even if the suburbs can no longer be suburban, including your utilities, telephone charges, Internet charges,1500 a month is absolutely super conscience price. Total :900 326 1000 500 800 1500=5026

 The monthly guaranteed cost is 5026 yuan! This is not a mortgage, car loans, not to mention deposits, negative assets have been very contented!

 Per capita, disposable income is 36,577, or 6096 yuan per month. Relative to this only for reference 5026 yuan of basic consumption, do you think it is still high? U. N. Secretary-General George Guterres recently pointed out that the richest 26 people control half of the world's wealth. Twenty-six people control half the world's wealth, and I am a billionaire on average with one of the 26. At the same time, I think that I have brushed a video some time ago. At a press conference during the two sessions, the Prime Minister said that about 600 million people in China earn about 1000 yuan, not to mention in first-tier cities. Even in the second and third-tier cities is difficult to survive.  After this video came out, I looked at most of the comments below, thinking that the Prime Minister was very approachable and focused on the bottom income of the masses. But some people use the topic, whenever there is positive news in society, he has moved out of the Prime Minister's words, very proud to say: China has about 600 million people in the income of about 1000 yuan. It's like he knows the country best. 

 CNMOULDING think about it, no money is not terrible, no money and take it for granted is terrible. Since we are a small mold maker, a plastic injection molding machine technician income can reach $2000 a month, if you do not have money, can only show that you did not work hard.

China opens a global tax era!

Big news! China opens a global tax era! Overseas resident Chinese domestic account to be canceled?

 

Recently, Bloomberg News, shock many Chinese citizens working overseas.

 According to the news, China began to tax the overseas income of Chinese citizens, that is, China began to be like the United States, no matter where you work in the world, you need to pay taxes to China, as long as you are a Chinese citizen, as long as you still hold a Chinese passport.

Bloomberg quoted people familiar with the matter as saying that China was tracking taxes on some Chinese citizens living outside the country. People familiar with the matter told Bloomberg that for nearly a while many Chinese state-owned employees in hong kong had been notified of the requirement to declare their global income for 2019 and pay personal income tax in accordance with china's domestic tax laws.

 Staff in Hong Kong have received a tax notice

 In the knowledge, also appeared the title "Big! China opens a global tax era! The post.

 The article quotes Bloomberg reports as well as a screenshot of a suspected Chinese state-owned enterprise in Hong Kong sending employees a "notification letter on the settlement of personal income tax on foreign earnings ".

According to the Circular of the General Administration of Taxation of the Ministry of Finance on the Policy on Personal Income Tax of Overseas Income, the income of Chinese residents from outside China shall be combined with domestic income to calculate the amount of tax payable and to declare and pay taxes annually.

 Of course, this notice is for employees of Chinese mainland enterprises in Hong Kong. But for British, American, Canadian, Australian, New Zealand, Singapore... Maybe it's just a matter of time.

 So who needs to pay taxes?

 Let's first define the concept of Chinese taxpaying residents.

 According to the new tax law issued last year, Article 1 of the Personal Income Tax Law of the People's Republic of China stipulates:

 Individuals who have a domicile in China or who have no domicile and have resided in China for a total of 183 days in a tax year shall be individual residents. Individual income tax shall be paid in accordance with the provisions of this Law for income derived by individual residents from within and outside China.

 If you don't live in China, how do you define a residence? Article 2 of the Regulations on the Implementation of the Personal Income Tax Law of the People's Republic of China states:

 Having residence in China means habitual residence in China because of household registration, family, and economic interests.

 In order to further illustrate this abstract concept, the State Administration of Taxation has further explained the "residence ": for an individual who lives abroad for reasons such as study, work, family visit, travel and so on, and who still lives in China after these reasons have been eliminated, China is the habitual residence of the taxpayer, that is, the individual belongs to the residence in China.

About 60 million Chinese citizens live overseas

 Some people say that I work overseas, if not Chinese state-owned enterprises, if not large Chinese companies abroad, but British companies, or Chinese small and micro-enterprises or companies, how can the country know where I work, and my income and property situation?

 There's away. China has announced that it will begin its seventh census on November 1,2020, targeting natural persons in china at the standard time point and Chinese citizens outside china who have not settled. The so-called settlement refers to the green card or permanent residence right.

 One of the priorities of the census was to clean up outstanding accounts. (Slippery and detailed at the end of the article)

 What is an unsold account? Many of the contents of the circular explained that: conscription into the army, overseas settlement, death, foreign nationality, etc. should be written off in accordance with the provisions of the account and not written off, it is defined as the account should be sold.

 That is to say, whether Chinese who have joined foreign nationality or Chinese who have settled overseas but still hold Chinese nationality may be canceled in this census.

 As soon as the census is over, which of the overseas Chinese tax-paying residents come to light. At present, Chinese state media reports that about 60 million Chinese citizens live overseas.

Pay up to 45% of personal income tax

 According to the relevant tax laws of China, residents are required to pay up to 45% of personal income tax according to the provisions of tax allowances and tax rates. The highest rate in Hong Kong is only one-third of that in mainland China, according to Bloomberg.

 China's vigorous enforcement of tax payments to Chinese citizens abroad means that Chinese citizens working abroad face enormous pressure to pay taxes. This pressure is even greater, especially when the national tax rate in the workplace is significantly lower than that in China.

 Of course, taxing the global income of residents is a more common practice internationally, and countries including Germany and the United States have relevant strict regulations.

 In Germany, for example, the failure to declare foreign income as required is illegal and requires criminal liability. China launched the revised regulations on the implementation of the personal income tax law at the end of 2018, which actually began to go into effect on January 1,2019, but has not yet been fully implemented.

 China's move is bound to cause panic among many foreign Chinese citizens, especially those with investment income overseas, who will pay a fortune if the new rules are strictly enforced.

 However, such an approach could result in a wealthy group of overseas Chinese simply emigrating and becoming nationals of the host country, thus avoiding a global tax on Chinese residents.

CNMOULDING thinks it's an important thing to know for all Chinese around the world. For your life and work, please make arrangements early.

An unprecedented 364 trillion yuan bubble

 Write in the beginning: struggle for decades to open the company, it is better to hype a suite! This is the joke of this era is also sad.

Even coronavirus has failed to stop the world's largest asset bubble from expanding.

 After a brief pause in the coronavirus blockade in February, China's property market, once considered unsustainable, resumed its climb. Although the economy is still not fully recovering, investors are trading hotly.
 In March this year, a new real estate development project in Shenzhen,288 apartments sold out in less than 8 minutes. A few days later, more than 400 homes in a new property in Suzhou were snapped up by buyers. It is estimated that Shanghai's second-hand housing sales in April are close to the highest level in history. On a Saturday last month, nearly 9,000 people each paid a down payment of $1 million to qualify for a property in Shenzhen.

"In March, when the market began to rebound, I had little time for lunch." Zhao Wenhao, Lianjia's agent in Shanghai, said. Lianjia is one of the largest real estate brokers in China. He said many customers were concerned that the yuan would depreciate in the face of a global slowdown, prompting more money to enter the housing market, which is seen as a safe haven.

 Many economists say the resulting asset bubble now outstrips the U.S. housing bubble of the first decade of the century. 

At the peak of the U.S. housing boom, about $900 billion was invested in residential property every year. In the previous 12 months, China's total investment in real estate was about $1.4 trillion. Last month, real estate investment in China exceeded any month since the record.
 According to Goldman Sachs Group, China's total inventory of housing and developers reached $52 trillion (364 trillion yuan) in 2019, twice the size of the U.S. housing market, or even more than the entire U.S. bond market.
 The stagnation of the housing market caused by the epidemic did not last long. Urban house prices rose 4.9% year-on-year in June. Despite a sharp drop in sales in February, investment in the first half of the year rose by 1.9%. On Thursday, the bureau said China's overall economy grew 3.2% in the second quarter.
 Evergrande, China's largest residential builder, has raised its sales target this year by 23% from January's expectations.

While the rapid recovery in the real estate market is, to some extent, good news for the central government.

the government has also drawn attention to some of the long-running worries. The central government has repeatedly issued policies to stop house prices from getting out of control. The phrase "houses are for the living, not for speculation" became the guiding mantra of government housing policy.
 However, it is not easy for people to take this information seriously. China's home sales have experienced a decade of rapid growth driven by borrowing, with a record household leverage of 57.7% in the first quarter of this year. This is the largest quarterly increase in the ratio since the first quarter of 2010, which measures the ratio of household mortgages, consumer loans and other loans to GDP.
 At the heart of China's problem is that buyers already understand that the government seems unwilling to let the market fall. If house prices do fall sharply, this will destroy the main source of wealth for most people and may trigger unrest.
 This gives the Chinese with enough money the incentive to continue buying, because they believe that real estate in big cities will remain the safest investment in China, regardless of the overall economic situation.
 "Real estate hijacked China's economy, so the government is afraid to push home prices down, even if this is the most effective way to curb the bubble," Chen said he works for a retailer and plans to buy a property in Shenzhen.
 "You have to follow the money," he said,37. He added that he had raised the budget for real estate spending since the outbreak pushed house prices up. "As long as the government starts printing money, asset prices will rise. In China, only housing prices will continue to soar.

No one is sure how the government will solve the problem without undermining overall economic stability.

Cash-strapped developers and local governments selling land to them have also boosted sales. Both require increased revenue to pay off debt and additional policy measures have been developed to that end.
 No one is sure how the government will solve the problem without undermining overall economic stability. Policymakers have had to postpone more aggressive stimulus plans, though some economists say it is necessary, in part because of fears that they will push home prices higher.
 The results of a survey of Chinese household finance conducted by the southwest university of finance and economics in Chengdu also confirm the concern that demand for real estate is rising mostly among people who already own housing, while the demand for real estate has not changed much among those without housing.
 This is a sign of speculative investment, says Gan Li, a professor of economics at Texas A & M University and a Chinese family finance expert.
 "Speculative demand is rising because people think real estate is a safer asset than the stock market," he said. They think it's for sure. Because of the epidemic, they actually consume less and save more. so they have more money to invest. This will create a bigger housing problem ."

According to the latest data from the China Household Financial Survey, in 2017, about 21% of housing units in Chinese cities were vacant, that is, about 65 million units, which is very high compared with international standards.

 The vacancy rate was 39.4 % among households with two properties and 48.2 % among households with three or more properties.
 In big cities such as Beijing, Shanghai, Shenzhen and Chengdu, the rate of return on rent (the proportion of annual rental income to the value of the real estate) is less than 2%, which is lower than the rate of return on buying Chinese government bonds.
 Still, Ms. Bishan, a 42-year-old English teacher, said the outbreak prompted her plans to invest in a second home in Shenzhen ahead of schedule because she feared inflation. "You have to invest your money somewhere, or you'll lose value ." She said.
 Tao duo, another buyer, said she and her husband signed a contract to buy a second home in Shanghai in early May. His purchase of the home, located in the ideal school district, could increase her 3-year-old son's chances of entering a good primary school.
 "We've been watching closely for months. Normally, these homes are robbed as soon as they go public," said Tao duo,32. She decided to buy the house the next day after watching it. "We were lucky to get this. The broker's boss said that on the night we signed the contract, the company got another full offer from another client ."
 Part of the reason some economists worry is that Chinese real estate is rising so fast, and it is continuing to climb even when the economy is under pressure.

By the end of last year, about 96 percent of Chinese urban households had at least one home, well above 65 percent of U.S. housing ownership, according to a survey released by the central bank in April.

 In some ways, this prosperity has achieved Beijing's goals. It has boosted economic growth and created wealth for millions of middle-class Chinese families. Local governments must hand over a large part of the income tax to the central government, but they also receive additional income from selling land to developers.
 But the housing boom has taken investment money from other industries. It also saddled many families with debt. According to the Bank for International Settlements, China accounted for about 57% of the $11.6 trillion increase in household loans worldwide between 2009 and 2019. The United States accounts for about 19%.
 Prices in some Chinese cities have reached levels comparable to those in some of the world's most expensive cities. According to the Chinese Academy of Social Sciences, the average house price level in China reached 9.3 times per capita income in 2018, compared with 8.4 times in San Francisco.
 In Tianjin, where 15 million people live, apartments in upscale locations are priced at about 60,000 yuan per square meter, according to Real Estate Service No .1 Pacific Davis. Although London's disposable income is seven times that of tianjin, it is roughly the equivalent of what an average homebuyer pays in some expensive parts of London.

local governments are under pressure to prevent further house prices from soaring, they are more worried about a sharp drop in prices

In essence, Chinese urban residents put everything on their own houses. They now have nearly 78% of their wealth tied to residential property, up from 35% in the US.
 When the coronavirus began to spread in China, many economists and property experts worried that the peak of real estate had arrived. Housing sales fell 36% in the first two months of 2020, compared with a year ago, and many cash-strapped real estate companies were pushed to the brink. As of June 5, more than 200 small developers had filed for bankruptcy, state media reported.
 After that, larger developers and local governments launched incentives to attract buyers back. At least 26 of China's 32 provinces and regions have introduced policies to boost the property market since February, including easing down payment requirements and home purchase subsidies, according to Huatai Securities.
 "While local governments are under pressure to prevent further house prices from soaring, they are more worried about a sharp drop in prices," said Gao Fei, general manager of property company Zhongyuan Group. They can't afford the consequences of the market falling. According to the Shanghai Yiju Real Estate Research Institute, in 2019, the proportion of land transfer income and related taxes on developers to local government income reached 52.9%, a record high.

As a china mold maker, I think most Chinese will invest their wealth in real estate during the downturn. "The worse China's economy gets," he said ." The higher the prices in Shenzhen and other places ."

US cut off the US dollar supply of Chinese banks! ?

What will happen after the US cut off the US dollar supply of Chinese banks

The United States dollar has the property of world currency because it has the highest utilization rate in international trade. As of March 2020, the United States dollar accounted for 44.1 percent of international trade settlements, while the euro ranked second was only 30.84 percent. Now, however, the U.S. is intent on cutting its own arm from allowing Chinese banks to get dollars and use them to settle accounts, potentially jeopardizing its dominance.

The US bill's proponents envisage that, by the end of 2019, China's four largest state-owned banks had $1.1 trillion in dollar-denominated debt, due to foreign trade transactions and foreign investment by Chinese companies, a small difference from the size of their dollar assets, are facing a shortage of dollars. Cutting off the dollar would deprive Chinese banks of the possibility of using the international reserve currency and could even prevent Chinese companies operating overseas from settling dollars. At that time," China's foreign trade will naturally decrease ".

China is the world's second-largest economy, with a total import and export trade of 31.54 trillion yuan in 2019, and the huge scale of trade settlement has made the United States dare not cut off the supply of dollars. Because if the United States does not allow Chinese banks to use dollars, then the use of the dollar is likely to drop sharply, and its dominance will be seriously challenged.

 China is also the second-largest lender overseas. According to U.S. statistics, in April, China reduced its holdings of U.S. Treasuries by $8.8 billion to $1.0728 trillion. Once China decides not to use dollar assets, the hedging role of holding dollar bonds will also be meaningless. By then, China's massive sell-off of dollar assets is likely to bring the dollar-led international financial system to a standstill.

The process of RMB internationalization is accelerating. So instead of the dollar, the use of the renminbi, the euro and other trade settlements will rise, and the renminbi will accelerate internationalization. The Central Bank of Turkey announced on June 19 that companies that have paid for imports from China through the Bank since June 18 will be settled in renminbi. In addition, the world's three major iron ore giants have also achieved RMB settlement with Chinese enterprises. All foreign trade manufacturing enterprises, including our plastic injection molding company, hope to maintain good relations between China and the United States. Of course, it's a national event, not something we little people need to worry about. But now that China-US relations are so bad, it is only because the United States needs elections.