Posted on 07/02/2017 7:07:16 AM PDT by TigerLikesRooster
China’s fake travel spending masks capital flight, warns Fed
Outflows have also artificially cut country’s trade surplus, says discussion paper
Capital flight disguised as overseas tourism spending has artificially cut China’s reported trade surplus while masking the extent of investment outflows, according to research by the US Federal Reserve.
A significant share of overseas spending classified in official data as travel-related shopping, entertainment and hospitality may over a 12-month period have instead been used for investment in financial assets and real estate, the Fed paper argued.
The findings could provide fresh ammunition to US President Donald Trump and other critics of China’s persistent trade surplus, as they imply that the surplus has fallen less than official data indicate. Disguised capital outflows in the year to September may have amounted to $190bn, or 1.7 per cent of gross domestic product, according to the paper.
(Excerpt) Read more at ft.com ...
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Sum ting Wong.
The US constitution and legal protection of property rights makes the US a very attractive repository of the world’s wealth. Asians and nervous EU individuals flooded the US markets with capital. This huge infusion of foreign capital into equity and real estate markets benefited the US economy and the American people immensely. It certainly saved the people from the anti capitalist, socialist policies of the Obama administration.
From Petro-Dollars to Land-Dollars. The irony of recycling American wealth is bittersweet because we just end up enabling the lifestyles of truly awful people.
How do they get the money out of the country? The big island of Hawaii is very underdeveloped. A perfect place to take over.
all their numbers are doctored. It’s the freaking chicomms
Well said. Many people do not understand that dollars are only of use for buying things denominated in dollars and eventually all dollars must come home. The Chinese are going to learn the same bitter lessons that the Japanese, Germans, and most of the ME has learned. Taking US dollars in exchange for tangible goods and then having to spend the surplus on hyper inflated real estate and corporations is a fool’s bet.
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