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銮锏赵
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1 Bond Crises in America and in the EU and its Impact on Japan and China Lim Hua Sing A bond crisis erupted initially in the USA in August 2011 and has spread to the EU countries quickly thereafter. The bond crises in the Western nations have since had a serious impact on the world and on Japan and China in particular. The USA has been the largest debtor in the world although she is also the world s largest economic power in terms of GDP. On the other hand, as the key currency in the world, the US dollar backed by the US domestic gold stocks, is being used internationally and the USA has printed greenbacks endlessly. However, the US currency has lost its real value and has depreciated against other major currencies drastically over the years. The weak US economy has to rely on issuing national bonds in order to cover her financial deficits. This excessive issuance of national bonds has caused the downgrading of the national bonds in the USA from AAA to AA+, and it has eventually created this bond crisis in the country. The USA was unable to solve the bond crisis by itself. The G7, the G8 and even the G20 were also unable to solve the US bond crisis. The bond crisis in the USA quickly spread to the EU and has created a domino effect among the EU countries. Greece, Spain, Portugal and Italy are seriously affected. The two most important economic powers in the EU, namely France and Germany, are also not in good shape. The EU, led by Germany and France, has made every effort to rescue Greece from collapsing, financially and economically, but in vain. The Greek bond crisis is not only Greece s problem but that of all EU nations. The EU will not be dismantled and the EU countries are not going to quit the EU so long as the EU can solve its bond crises as soon as possible. 1

2 The bond crises in the Western nations have also seriously affected Japan and China. Japan, as the second largest holder of foreign currency reserves, is also the second largest holder of American national bonds. Japan has also invested in bonds in the EU and is urged by the EU to increase her purchase of European bonds. Japan s investment in bonds in the Western nations has been risky and the drop in value of these bonds has affected Japan badly. On the other hand, bond crises and economic crises in the Western nations have prompted investors to increase purchases of the Japanese currency. The Japanese currency has thus appreciated dramatically and it has seriously affected Japanese exporting industries and further jeopardized Japan s economic recovery. The Japanese economy is now hollowing-out and its economy has remained gloomy and stagnated. China, as a successful emerging economy and the largest holder of foreign currency reserves in the world, has been the largest purchaser of American national bonds. To avoid risks associated with holding these American national bonds, China has diversified her bond portfolio and increased purchases of other bonds in Japan, Korea, Middle East, and of course in Europe. After the EU bond crisis, China has been urged by the EU to increase her purchase of bonds issued by EU nations. The ranking of national bonds issued by European nations has generally been low graded and the interest paid on these bonds has been increasing, which indicates that the value of national bonds in Europe has been depreciating. As such, China s investment in national bonds in Europe has become more and more risky. On the other hand, China has been urged and pressurized by the Western nations to increase the value of her Renminbi. China has emphasized that she will adjust her Renminbi in accordance with both domestic and international economic situations. China s Renminbi has so far remained under the control of the Chinese government. The Western nations, especially the USA, hope that the drastic Renminbi appreciation will rectify international trade deficits against the Western nations, and reduce China accumulating trade surpluses which shifts the balance of power. This article is aimed at analyzing the current bond crises erupting in the USA and in the EU, and its direct and unavoidable impact on the economies of Japan and China. 2

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5 - G20 - G7 G8, G G

6 G Moody s Investor Service Aa 2 Aa G

7 % 10% GDP 189.3% * /GDP % 199.7% 93.6% 126.8% 147.3% 87% 85% 80% 60% 17%** 96%

8 % % G

9 AAA AA+, speculators hedge fund managers hot money % % 9

10 % 10% 20% 20% 3% CPI % GDP PPP Purchasing Power Parity GDP

12 TPP TPP, G7 IMF EFSF European Financial Stability Facility. 12

13 * Monaco ( Lei cht enst ei n) Br unei 1-10 /GDP % % % % 113.4% employer employee central provident fund social infrastructure. industrial infrastructure. state enterprises and statutory boards. Government of Singapore Investment Corp. ( Temasek Holdings) (SingTel) (Singapore Airlines) (DBS Bank) (SMRT) M&A --- ** Financial Times /GDP 37% 90% 13

Chinese oil import policies and reforms 随着经济的发展, 目前中国石油消费总量已经跃居世界第二作为一个负责任的大国, 中国正在积极推进能源进口多元化, 鼓励替代

Chinese oil import policies and reforms SINOPEC EDRI 2014.8 Chinese oil import policies and reforms 随着经济的发展, 目前中国石油消费总量已经跃居世界第二作为一个负责任的大国, 中国正在积极推进能源进口多元化,