Submitted by Taps Coogan on the 11th of October 2019 to The Sounding Line.

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Christopher Balding, associate professor at the Fulbright University of Vietnam and long time China resident, recently spoke with Bloomberg about the possibility of de-listing Chinese companies from American exchanges and China’s increasing shortage of foreign currency.

 

Some excerpts from Christopher Balding:

“…This is really a Beijing problem (of potential de-listing of Chinese companies in the US) because Beijing has declared all of the financial records of these companies state secrets. So, I actually believe a good number of them would actually like to comply. We’ve seen that when some percentage of Chinese companies are faced with either competition or higher regulatory standards, they comply… There are, of course, some that would not. However, I think the primary obstacle is not these companies, but Beijing and their unwillingness to really acknowledge global regulatory standards for accounting and auditing.”

“Just recently (China) released balance of payments data and this is the largest year of net errors and omissions in their capital account really this decade. I believe the number was $131 billion in net errors and omissions and that’s basically money that they can’t account for that has somehow left China. This is basically showing us that capital outflows are increasing and so even though Beijing is working very hard to tamp down on that, I think all indications are that they are much shorter US dollars than I think most people realize. We just saw them, this week, pull out of a $5 billion investment in an oil field in Iran. We’ve seen other indications that they’re much shorter US dollars than is widely understood.”

There is more to the interview, so enjoy it above. For a further discussion of the Chinese economy by Christopher Balding, read here.

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