prc30 on Nostr: China Morning Missive The People’s Bank of China made the decision, once again, to ...
China Morning Missive
The People’s Bank of China made the decision, once again, to hold firm on its benchmark lending rate. Not at all a surprise.
Once again, I will reiterate that “Keynes is Dead in China”. Keep this in mind every time you see some commentator or some podcast discussion where they yammer on about some mythical “China money printer”. If you do ever hear that particular talking point, know that the people making the comments have no clue as to what, exactly, is taking place.
Is China issuing gobs of debt? Yes, yes it is. The proceeds from nearly all of that issuance, however, is being deployed to retire opaque and costly local government/municipal debt. Debt swap, or debt restructuring. Call it what you will, but do not call it fiscal stimulus or money printing. China is simply working through the process of cleaning up its fiscal house.
I would add, mind you, that China isn’t entirely refraining from attempts to stimulate the economy. Far from it. The focus though is on the central bank – monetary policy – playing around with various liquidity instruments. There’s been a concerted move towards credit market efficiency. Basically, China’s planners have been experimenting on improving the productivity of its various liquidity instruments. Attempts are being made to get more out of what liquidity is available rather than just flood the zone.
Again, this has been the playbook for 2+ years and is expected to remain the playbook at least until there is greater clarity over what, if anything, Trump 2.0 aims to do in targeting China.
China keeps benchmark lending rates steady amid rising tariff risks https://www.cnbc.com/2025/02/20/china-lpr-decision-february.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard
The People’s Bank of China made the decision, once again, to hold firm on its benchmark lending rate. Not at all a surprise.
Once again, I will reiterate that “Keynes is Dead in China”. Keep this in mind every time you see some commentator or some podcast discussion where they yammer on about some mythical “China money printer”. If you do ever hear that particular talking point, know that the people making the comments have no clue as to what, exactly, is taking place.
Is China issuing gobs of debt? Yes, yes it is. The proceeds from nearly all of that issuance, however, is being deployed to retire opaque and costly local government/municipal debt. Debt swap, or debt restructuring. Call it what you will, but do not call it fiscal stimulus or money printing. China is simply working through the process of cleaning up its fiscal house.
I would add, mind you, that China isn’t entirely refraining from attempts to stimulate the economy. Far from it. The focus though is on the central bank – monetary policy – playing around with various liquidity instruments. There’s been a concerted move towards credit market efficiency. Basically, China’s planners have been experimenting on improving the productivity of its various liquidity instruments. Attempts are being made to get more out of what liquidity is available rather than just flood the zone.
Again, this has been the playbook for 2+ years and is expected to remain the playbook at least until there is greater clarity over what, if anything, Trump 2.0 aims to do in targeting China.
China keeps benchmark lending rates steady amid rising tariff risks https://www.cnbc.com/2025/02/20/china-lpr-decision-february.html?__source=iosappshare%7Ccom.apple.UIKit.activity.CopyToPasteboard