Moscow. December 24. One of the few analysts, right prognozirovanii as the growth in the stock market in China, and the subsequent recession, said a shortage of dollar liquidity in the country that in the last 40 years has repeatedly served as a harbinger of crisis, writes Bloomberg.
In particular, this deficit was accompanied by a collapse of the oil market in the 1970s and the debt crisis in Latin America in the 1980s, and the collapse of the Asian currency market in 1997, and the global crisis of 2008, said the chief China strategist at Bocom International Holdings Hao Hong.
The growth rates of the Federal reserve system, improving the US balance of payments and strengthening the dollar will have next year a strong pressure on sectors of the Chinese economy is highly leveraged, he said.
“In the past every dollar strengthening following the improvement of the US balance of payments was accompanied by a crisis in any country, – said Hao Hong. – The shortage of dollar liquidity, it is likely that will manifest itself in the real estate sector of Hong Kong, as well as in the field of online lending and high yield corporate bonds in the PRC”.
Yuan, for many years considered the best currency for Asian operations carry trade, in 2015, fell to the dollar by 4.2%, while the difference in yield of Chinese government bonds and Treasury bonds, the U.S. declined to the lowest level in five years. Companies from China, the past three years held in a foreign currency at a record pace, now buy dollars for insurance against losses.
“The road to hell is paved with positive carry-trade. The last few years amid a firm conviction in the strengthening of the yuan, investors often commit unhedged borrowing in dollar bonds, and now many companies are trying to quickly pay off this debt, thus mitigating the risks, but not all,” said Hong.
In 2011-2013, the yuan was fixed at 13% in tandem with the dollar, but in 2014, its rate has decreased by 2.4%. Drop by 4.2% in the current year will be the highest in two decades.