China's Global Disruption: Myths and Reality

Cover
China’s Global Disruption
China’s Global Disruption: Myths and Reality
Copyright
Dedication
Table of Contents
List of Abbreviations
Preface
1. China's Global Disruption: From Digital Currency to COVID-19
	The Rise of a Chinese Digital Currency
	Crypto-renminbi to Challenge the US Dollar
	The COVID-19 Disruption
	Tourism and beyond
	Trade Disruption
	Supply Chain Shock
		China as a Demander
		China as a Supplier
		Changing Dynamics
	Disruption to Investment
	The China Disruption
	The Post COVID-19 Geo-political Disruption
	COVID-19 Legacy
2. The Chinese Emperor Shock
	China's Anti-corruption War
	The Handicap of Market Forces
	No China Disruption to Luxury Demand
	The New Emperor
	Will Growth Fall Below 6% Soon?
	Is It Simply Power-grabbing?
	Problem with Multiple Policy Goals
	Changing the Incentive Scheme…
	… the Chinese Way
	The Ultimate China Risk
3. The China–US Tech Race
	The Core of the Tech Conflict
	Is ‘Made in China’ That Formidable?
	The Patents Myth
	What About Intellectual Property Theft?
	The Big Question
	The Disruption Risks
	The China Challenge and Its Limits
	The Disruption and Opportunity Cost
4. The Sum of All Fears
	The Economics-politics Marriage
	How Would the Shock Unfold?
	Demographic Pains – What We Know
	What We Don't Know
		Early Retirement and the Incentive Problem
		Finding Another 200 Million Workers
	Relaxing the Growth Constraints
	Escaping the Middle Income Trap
	The Real China Growth Story
5. China's Role in the Global Market Cycle
	It Cuts Both Ways
	Things Have Changed
	The Capital Flight Scare
	The Fuss About China's Current Account
	Structural Erosion but not yet Structural Deficit
	Implications
	The Fear of the Commodity Market
		The Cyclical Impact
		Secular Impact
	A Story of Relative Changes
6. The Debt Time Bomb
	Debt Vulnerability – Déjà vu
		The Domestic Growth Shock
		The External Funding Shock
	A Ticking Time Bomb…
	… That Won't Detonate
	The Risk Lies Somewhere Else
	Not yet a Dire Problem
	Bank Failures – A Turning Point for Reform?
	Unregulated Growth Is Over
	Local Government Debt
	LGD Build-up and Risks
	Debt Risk Is Still Manageable
	What Matters the Most
	The Household Debt Mystery
	Is China's Household Debt Excessive?
	The Risks
	Outlook and Policy
7. The Crooked Debate of China's Debt Risk
	De-leveraging Cannot Go Fast
	The Partial Debt Debate
	The Financial Deepening Conundrum
	Mortgages not a New Debt Bomb
8. China and the Currency War
	Currency Wars and Causes
		Domestic Economic Woes
		Debt
	The Currency War Game
		Prisoner's Dilemma – A Digression
		The Currency War Game
	China's Devaluation Choice
	Risk Implications
	Did China Join the Currency War After 2015?
	Devaluation Will Backfire on China
	Currency War Prompts Renminbi Reform
	Japan Aggravating the Currency War…
	… Opening a Window for Renminbi Reform
	It's all About Reform
9. From Trade War to Global Disruption
	From Global Imbalance…
	… To Currency War
	No Proof of Devaluation
	The Trump Disruption
		Nash Equilibrium – A Digression
		Corner Solution (Winner Takes All)
	Why Are We Confused?
	Trump's Optimal Strategy
	Relevance to China
	Damage on the United States
	Collateral Damage
	Impact from Contagion
	From Trade War to Cold War to Global Disruption
	Impact on Climate Change
	Disruption to Stay!
10. Renminbi Internationalisation
	The Motives
	A Portfolio Perspective
	Fostering a New Monetary Order
	The Failure of the G3 Currencies
	The Role of the ‘Chinese Dream’
	Internationalisations Slows Down
	Speculative Demand Not Good for Internationalisation
	Stuck in First Gear
	Trade Is Not Enough – The Japanese Experience
	Internationalisation the Japanese Way
	Not a Top Policy Priority
11. The Disruptive Belt and Road Initiative
	The Strategic Importance for China
	It's a Sino-US Disruption
	The Hype About the BRI
	The Commercial Reality
	The Suspicion
	Abide by International Norms
	The Invisible BRI
	The Close Linkage with the US
	An Invisible Global BRI
	The Reality of ‘Debt-trap’ Finance
	Risks for China
	BRI Ambition Scaled Back
12. Global Disruption – The New Normal
	The Geo-strategic Disruption
	COVID-19 Awakes the Wolf Warrior
	Inherent Global Disruption
	Central Bank ‘Put’ and Moral Hazard
	Unintended Consequences
	The Fiscal Complication
	China Offers Food for Thought
References
Index