"Chinese banks are rapidly deleveraging their dollar balances”. What, exactly, was leveraged?
"Sanctions imposed on Russia may have panicked Chinese monetary authorities into directing the reduction in dollars held in their system”. Given that Elvira Nabiullina and Yi Gang talk weekly (their new reserve currency, ruble support, eliminating dollars in trade), this seems unlikely.
"There has long been a suspicion that Chinese lending to emerging economies came with unpalatable conditions”. Happily, we now know that the 'suspicion,' which was suspected by the hopelessly mendacious USA, was groundless. See the work of Johns Hopkins' Debora Brautigam et al on this.
Well, it seems we may have room for divergent opinions on three counts, at least. Any banking system exposed to foreign currency holding may be considered to be leveraged as the risk demands additional capital above that for domestic balance sheet. On the second point, the claims of Nabiullina and Yi Gang are politically imperative but don’t reflect any shift in dollar dominance. On the third point, we simply don’t know, so we should be suspicious.
"Chinese banks are rapidly deleveraging their dollar balances”. What, exactly, was leveraged?
"Sanctions imposed on Russia may have panicked Chinese monetary authorities into directing the reduction in dollars held in their system”. Given that Elvira Nabiullina and Yi Gang talk weekly (their new reserve currency, ruble support, eliminating dollars in trade), this seems unlikely.
"There has long been a suspicion that Chinese lending to emerging economies came with unpalatable conditions”. Happily, we now know that the 'suspicion,' which was suspected by the hopelessly mendacious USA, was groundless. See the work of Johns Hopkins' Debora Brautigam et al on this.
Well, it seems we may have room for divergent opinions on three counts, at least. Any banking system exposed to foreign currency holding may be considered to be leveraged as the risk demands additional capital above that for domestic balance sheet. On the second point, the claims of Nabiullina and Yi Gang are politically imperative but don’t reflect any shift in dollar dominance. On the third point, we simply don’t know, so we should be suspicious.