Investors abandon the dollar and rush to the Chinese market

With record foreign investment in bonds, China shows the strength of its currency and challenges US global supremacy

Bond yields in renminbi (RMB, Chinese currency) have shown positive performance since the beginning of the year, attracting growing interest from foreign investors who have increased their holdings in the market, it said Li Hongyandeputy head of State Administration of Foreign Exchange of Chinathis Tuesday (22).

Currently, the foreign holdings in domestic RMB bonds surpassed US$640 billionmarking a historic record, highlighted Li in a press conference.

“Overall, the holding of RMB assets by foreign investors contributes to diversifying domestic market participants, increasing liquidity and promoting more dynamic and international development of China’s capital market.”said Li.

She further added that authorities will continue to facilitate investmentscreate a favorable environment for investors, promote a high-level financial openness to the global market and support actively the participation of foreign investors in the Chinese capital market.

What else is happening in the Chinese economy?

According to a Reuters report, the US government is about to finalize regulations that will ban investments in artificial intelligence in China, as highlighted by a recent update. The measure aims to restrict specific outbound investments to areas such as AI, semiconductors, microelectronics and quantum computing.

The report says the regulation is currently under review by the Office of Management and Budget, suggesting it should be released next week.

These rules will require U.S. investors to notify the Treasury Department of certain investments in sensitive technologies, such as AI, in China.

China evaluates boosting economy with trillion-dollar public investment and sends message to Brazil

A China needs to adopt economic stimulus measures “as quickly and quickly as possible” to combat the risk of a downward spiral, in which decrease in spending ea drop in income mutually reinforce each other.

The alert was made by Zhang Bindeputy director of Institute of World Economics and Politics of the Chinese Academy of Social Sciencesduring a webinar held on October 20 by China Macroeconomics Forum.

Zhang highlighted that the Chinese government may need to raise new debt in 2024, including treasury bonds, local special purpose bonds and off-budget debt sales totaling more than 12 trillion yuan (nearly US$1.67 trillion).

With information from O Cafezinho and News Agencies