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Why China’s path to ‘financial superpower’ status could begin in Hong Kong
FinanceSCMP8d ago

Why China’s path to ‘financial superpower’ status could begin in Hong Kong

When Wilson Chan Fung-cheung joined Hong Kong’s banking industry as a foreign-exchange trader more than four decades ago, his work involved US dollars, UK pounds, Japanese yen and various European and Asian currencies – but not Chinese yuan. “Back then, there was no yuan trading at all as, in fact, the internationalisation of the yuan only started in 2009,” recalled Chan, who has worked for various Chinese banks. Beijing’s decision that year to promote its currency for wider use in trade,...

Businesszerohedge15d ago

China's Debt Model Creates Danger Of Stagnation

China's Debt Model Creates Danger Of Stagnation Authored by Daniel Lacalle, The latest social financing figures from China show an economy that is increasingly relying on government debt while private demand for credit remains weak. The strength of the Chinese technology sector and its exporting companies gives enough room for leverage. However, behind the weak private sector credit demand lies an evident economic slowdown that the Chinese government acknowledges, challenging consumption patterns, a significant overcapacity problem, and the depth of the housing crisis. The current economic model, focused on delivering 5% real economic growth, requires larger doses of debt to achieve smaller increments of growth, especially productive sector growth. The government has focused on reducing debt and overcapacity imbalances while reorienting its exports and financial system to lessen dependence on the US dollar; however, the main challenge for the Chinese economy remains boosting consumer demand, despite rate cuts and easing financial conditions. To understand the intensity of debt of the Chinese model, we must go to the year 2000 and see the acceleration in the flow of debt, not just the current stock. At that time, real GDP growth was around 8–9%, so each percentage point of growth came with roughly 13–16 points of debt‑to‑GDP. Government debt was very low, at around 25% of GDP, and most leverage sat in the state-owned corporate sector with modest household debt. China was able to deliver near‑double‑digit growth with a total non‑financial debt ratio barely above 120% of GDP. By 2023, non‑financial sector debt had risen to about 285% of GDP, more than doubling its level of 2000. Chinese think‑tanks and official commentators put the “macro leverage ratio” closer to 300% of GDP by 2025, according to the Chinese Academy of Social Sciences. The macro leverage ratio rose by 11.8 percentage points to 302.3 percent in 2025, exceeding the 10.1-point increase reported in 2024. Over the same period, the trend of real GDP growth has slowed to roughly 4–5%, so each percentage point of growth now requires around 60–75 points of debt‑to‑GDP, more than three times the debt per point of growth required in 2000. Furthermore, it comes mostly from government debt. In January 2026, aggregate social financing jumped by 7.22 trillion yuan, significantly higher than in the same month of 2025 and above market expectations, consistent with 5% annual GDP growth and a larger composition of the public sector in the mix. Outstanding social financing reached 449.11 trillion yuan at the end of January, rising 8.2% year‑on‑year, while money supply (M2) rose by 9%.​ New yuan bank loans were 4.7 trillion yuan, about 420 billion less than a year earlier and significantly below consensus, showing the weak private‑sector credit demand and the prudent approach of Chinese customers and businesses to debt addition. RMB loans outstanding stood at 276.62 trillion yuan, up only 6.1% year‑on‑year, clearly below the pace of overall financing and money growth. The driver of credit growth in China is no longer households and private firms but the government and state-owned companies. The real estate problem has impacted Chinese families in numerous ways. Not only did most of them see the value of their homes decline, but many families invested in the attractive yields of real estate developers’ commercial paper, which led to large losses and even the wipe-out of savings for many. Additionally, despite the excess in supply of houses, prices have not fallen enough to warrant enough appetite for new mortgages, as affordability remains an issue and the traditional prudence of Chinese citizens when it comes to consuming and borrowing adds to the challenge. Beijing plans to issue 4.4 trillion yuan in local government special‑purpose bonds in 2025, 500 billion more than in 2024, looking to boost government investment and a “proactive fiscal policy,” knowing that raising taxes would be exceedingly negative for growth and consumption. Local governments are expected to issue more than 10 trillion yuan in bonds in 2025, including refinancing, general bonds, and new special bonds. The Chinese government knows that it can manage more debt but also sees the weak investment and household spending and acknowledges that large tax increases would be counterproductive.  However, to prevent future debt-driven stagnation, a focus on productivity is necessary. The official budget sets a deficit of 4% for 2025. However, once all budget items are consolidated, including government funds, special bonds, and off‑budget vehicles, this true fiscal deficit in 2025 is closer to 9%, up from 7.7% in 2024, according to Rhodium Group and JP Morgan. China increasingly relies on hidden or almost fiscal borrowing to support growth. With outstanding social financing now around 449 trillion yuan and real growth around 4–5%, each incremental point of GDP is increasingly linked with a much larger stock of debt than a decade ago. This rising credit intensity of growth may prevent a significant slowdown but may create a significant fiscal challenge in the future. The Chinese model demands high growth and low taxes; any change to the fiscal system will be negative. For years, local governments relied on the sale of land for property development to collect tax receipts. Thus, the drag from real estate is evident in the economy and in fiscal sustainability. Real estate development investment fell 13.9% year‑on‑year in the first three quarters of 2025, with residential investment down 12.9%, the steepest drop since 2021, according to official figures. Property investment and sales both posted double‑digit declines in 2024, and forecasters expect real estate investment to fall another 11% and sales to drop 7.5% in 2025, according to Reuters, with further declines in 2026 before stabilizing only in 2027… if it happens as fast as consensus estimates. The property sector, once a key engine for economic growth and tax receipts, absorbs new credit to stabilize its accounts without boosting growth or creating a multiplier effect. Additionally, China’s industrial capacity utilization remained at 74.9% at the end of 2025, well below the 78.4% peak reached in 2021. Overcapacity is clear in steel, autos, legacy chips, and parts of sectors like green tech, where expansion has surpassed domestic and external demand. Thus, the purchasing managers’ indices show weak new orders and foreign demand, while bankruptcies and insolvencies have risen, although not to levels that would indicate a financial crisis.​ The Chinese economy needs to reopen, improve investor and legal security and allow the housing slump to materialize fully to see the type of productive economic growth it needs to avoid much larger increases in debt. Otherwise, the risk of stagnation will likely be elevated as population growth stalls, overcapacity remains, and the stock of unsold property becomes a larger liability.   Tyler Durden Mon, 02/16/2026 - 22:25

Albanian Foreign Exchange Rates Today
Financebalkan-web1d ago

Albanian Foreign Exchange Rates Today

On the Albanian foreign exchange market today, one US dollar will be bought for 81.5 lek and sold for 82.5 lek. The European euro will be bought for 96 lek and sold for 96.6 lek.

Dollar to Naira exchange rate today, February 26, 2026
Financevanguard-ng6d ago

Dollar to Naira exchange rate today, February 26, 2026

The Nigerian Naira held its ground against the US Dollar on Thursday, February 26, 2026, as the market reacted to the Central Bank of Nigeria's (CBN) recent decision to enter a "stabilization phase." The post Dollar to Naira exchange rate today, February 26, 2026 appeared first on Vanguard News.

Dollar to Naira exchange rate today, February 25, 2026
Worldvanguard-ng7d ago

Dollar to Naira exchange rate today, February 25, 2026

The Nigerian Naira maintained a steady performance against the US Dollar during early trading on Wednesday, February 25, 2026. The post Dollar to Naira exchange rate today, February 25, 2026 appeared first on Vanguard News.

Need 72.2 billion ISK
Worldmorgunbladidindex-hrla-vanguardia9d ago3 sources

Need 72.2 billion ISK

Ukraine needs 588 billion US dollars to rebuild the country after the destruction caused by Russia's four-year invasion war.

The 30 countries that spend the most on their militaries, ranked
WorldBusiness Insider15d ago

The 30 countries that spend the most on their militaries, ranked

The US has the most expensive military in the world. Tajh Payne/US Navy via Getty Images The International Institute for Strategic Studies compiled data about the world's military budgets. The top militaries spend hundreds of billions of dollars on defense, with the US leading worldwide. President Donald Trump has proposed increasing annual defense spending to $1.5 trillion. The US has the world's most expensive military, spending nearly $1 trillion on defense each year. That's roughly four times China's reported defense budget, the next largest. From spending on nuclear technology to advanced aircraft and warships, the world's top militaries allocate hundreds of billions of dollars each year to stay ahead. In some countries, big-ticket items such as naval assets or technologically advanced aircraft or missiles account for the bulk of military spending, while others devote large sums to maintaining large conscription troop systems. Ultimately, military spending varies by country depending on location and interests, Gian Gentile, a retired US Army colonel and senior historian at RAND, told Business Insider. Some countries prioritize homeland defense while others value overmatch and far-reaching power projection. "The US spends a lot on more sophisticated, extremely precise weapon systems," he said. A military's budget can be measured either as a total amount or as a share of its country's GDP, reflecting the burden on its economy. Worldwide, countries spent an average of 2.4% of their GDP on defense in 2024. Wartime spending as a share of GDP typically rises, putting strain on the civilian economy, said Mark Cancian, a senior advisor at the Center for Strategic and International Studies. Ukraine in 2024, for example, devoted over 15% of its GDP to its military, the highest share globally. Spending statistics help paint a picture of defense priorities, but they don't always translate into readiness for conflict. "Readiness is very expensive, and perishable," Cancian said. A country's on-paper investment in its defense systems doesn't always translate directly into military capability, he added. Training and maintenance are often overlooked in analyses of spending on equipment and technologies. A particularly significant cost when it comes to technologically advanced aircraft, for instance, is maintenance and sustainment. Still, looking at military budgets can reveal how much capital each country relies on to defend itself. Last year, the International Institute for Strategic Studies, a London-based think tank, released its Military Balance report, which included data on nearly every country's defense budget based on each's reported 2024 figures. The report includes each country's total budget (in US dollars), per-capita figures, and defense budget as a share of GDP. Some countries, such as North Korea, Libya, Syria, Cuba, and Afghanistan, did not publicly report their defense budgets. These are the 30 countries that spend the most on their military, ranked by the size of their defense budgets. 30. Qatar KARIM JAAFAR/AFP via Getty Images Defense budget: $9.66 billion Defense budget per capita: $3,785 Percentage of GDP: 4.36% 29. Norway Yauhen Yerchak/SOPA Images/LightRocket via Getty Images Defense budget: $9.79 billion Defense budget per capita: $1,776 Percentage of GDP: 1.94% 28. Mexico Victoria Razo / AFP Defense budget: $10.19 billion Defense budget per capita: $78 Percentage of GDP: 0.55% 27. Indonesia BAY ISMOYO / AFP Defense budget: $10.93 billion Defense budget per capita: $39 Percentage of GDP: 0.78% 26. Sweden Leon Neal/Getty Images Defense budget: $12.25 billion Defense budget per capita: $1,157 Percentage of GDP: 2.01% 25. Iraq Zaid AL-OBEIDI / AFP Defense budget: $12.68 billion Defense budget per capita: $301 Percentage of GDP: 4.8% 24. Turkey Anadolu/Anadolu via Getty Images Defense budget: $14.27 billion Defense budget per capita: $170 Percentage of GDP: 1.06% 23. Singapore ROSLAN RAHMAN/AFP via Getty Images Defense budget: $15.17 billion Defense budget per capita: $2,517 Percentage of GDP: 2.86% 22. Taiwan I-Hwa Cheng / AFP Defense budget: $18.86 billion Defense budget per capita: $799 Percentage of GDP: 2.43% 21. Spain picture alliance/dpa/picture alliance via Getty Images Defense budget: $19.44 billion Defense budget per capita: $411 Percentage of GDP: 1.12% 20. Algeria NurPhoto/NurPhoto via Getty Images Defense budget: $21.4 billion Defense budget per capita: $455 Percentage of GDP: 8.23% 19. United Arab Emirates VCG/VCG via Getty Images Defense budget: $22.27 billion Defense budget per capita: $2,220 Percentage of GDP: 4.09% 18. The Netherlands Remko de Waal / ANP / AFP Defense budget: $23.61 billion Defense budget per capita: $1,328 Percentage of GDP: 1.94% 17. Brazil Anadolu/Anadolu via Getty Images Defense budget: $24.4 billion Defense budget per capita: $111 Percentage of GDP: 1.11% 16. Canada Artur Widak/NurPhoto Defense budget: $27 billion Defense budget per capita: $696 Percentage of GDP: 1.22% 15. Poland Aleksander Kalka/NurPhoto Defense budget: $28 billion Defense budget per capita: $723 Percentage of GDP: 3.25% 14. Ukraine Tetiana DZHAFAROVA / AFP Defense budget: $28.41 billion Defense budget per capita: $797 Percentage of GDP: 15.43% 13. Israel Elke Scholiers/Getty Images Defense budget: $33.75 billion Defense budget per capita: $3,589 Percentage of GDP: 6.39% 12. Italy Antonio Masiello/Getty Images Defense budget: $35.23 billion Defense budget per capita: $578 Percentage of GDP: 1.48% 11. Australia Ian Hitchcock/Getty Images Defense budget: $36.40 billion Defense budget per capita: $1,360 Percentage of GDP: 2.02% 10. South Korea Kim Jae-Hwan/SOPA Images/LightRocket via Getty Images Defense budget: $43.88 billion Defense budget per capita: $842 Percentage of GDP: 2.35% 9. Japan JIJI Press / AFP Defense budget: $53.01 billion Defense budget per capita: $430 Percentage of GDP: 1.3% 8. France Philippe Magoni / POOL / AFP Defense budget: $64.03 billion Defense budget per capita: $937 Percentage of GDP: 2.02% 7. Saudi Arabia BANDAR ALDANDANI/AFP via Getty Images Defense budget: $71.73 billion Defense budget per capita: $1,963 Percentage of GDP: 6.52% 6. India Roslan RAHMAN / AFP Defense budget: $74.36 billion Defense budget per capita: $53 Percentage of GDP: 1.91% 5. United Kingdom Owen Humphreys - PA Images/PA Images via Getty Images Defense budget: $81.06 billion Defense budget per capita: $1,184 Percentage of GDP: 2.26% 4. Germany Michaela Stache / AFP Defense budget: $85.98 billion Defense budget per capita: $1,022 Percentage of GDP: 1.83% 3. Russia VCG/VCG via Getty Images Defense budget: $120.32 billion Defense budget per capita: $854 Percentage of GDP: 5.51% 2. China Greg Baker / AFP Defense budget: $234.98 billion Defense budget per capita: $166 Percentage of GDP: 1.29% 1. United States Mario Tama/Getty Images Defense budget: $967.96 billion Defense budget per capita: $2,831 Percentage of GDP: 3.32% Read the original article on Business Insider

Dollar to Naira exchange rate today, March 3, 2026
Financevanguard-ng1d ago

Dollar to Naira exchange rate today, March 3, 2026

The Nigerian Naira opened the second trading session of March with a slight cooling against the US Dollar on Tuesday, March 3, 2026. The post Dollar to Naira exchange rate today, March 3, 2026 appeared first on Vanguard News.

Dollar to Naira exchange rate today, March 2, 2026
Financevanguard-ng2d ago

Dollar to Naira exchange rate today, March 2, 2026

The Nigerian Naira began the new month on a note of cautious stability against the US Dollar on Monday, March 2, 2026. The post Dollar to Naira exchange rate today, March 2, 2026 appeared first on Vanguard News.

Russia Bypasses Sanctions Through UK Overseas Territories
Worldlsm-lv5d ago

Russia Bypasses Sanctions Through UK Overseas Territories

Transparency International reports that Russia has conducted at least eight billion US dollars in foreign trade through companies registered in British overseas territories between February 2022 and January 2025, despite international sanctions.

China’s yuan strengthens to near 3-year high as US dollar uncertainty grows
FinanceSCMP7d ago

China’s yuan strengthens to near 3-year high as US dollar uncertainty grows

China’s yuan has strengthened to its highest level against the US dollar in nearly three years, with its official fixing rate also firming amid growing uncertainty over the American currency. On Wednesday afternoon, the offshore yuan traded at 6.867 per US dollar, its strongest level since April 2023. The same day, the People’s Bank of China set the yuan’s midpoint rate – also known as the daily fixing – at 6.9321 per US dollar, also the strongest since May 2023. The currency has appreciated...

European Officials Surprised by Hungary
Politicsdelfi-lt9d ago

European Officials Surprised by Hungary

Hungary has angered European Union member states by threatening to block the latest package of sanctions against Russia and a 90 billion euro (106 billion US dollar) loan to Ukraine.