### Summary
Ray Dalio, a renowned investor, believes that China's struggling economy needs a significant debt restructuring, despite economists stating that Beijing won't intervene to support the failing property sector.
### Facts
- Ray Dalio currently has approximately $3 billion invested in Chinese businesses.
- China's struggling property sector, plagued by failing property giants and sinking house prices, is causing concerns about contagion in other industries.
- Beijing is unlikely to step in and prop up developers, even though the sector is described as the "single most important" industry on a global scale.
- China's debt has nearly doubled over the past five years, reaching about 66 trillion yuan ($9.3 trillion), which is more than half the country's annual economic output.
- Dalio suggests that China should undertake a massive debt restructuring, similar to what Zhu Rongji orchestrated in the late 1990s but on a larger scale.
- Dalio believes that China's restructuring would be easier than other countries' due to the majority of debt being held in the country's own currency.
- The two levers to facilitate the "beautiful deleveraging" process in China are deflationary defaults and restructurings, combined with the inflationary measure of printing money.
- Other countries, such as Japan, the United States, and Europe, will also need to deleverage eventually, but Dalio thinks China should take the first step.
- China is currently facing various alarming issues, including intervention in the currency markets, soaring youth joblessness, and a drop in land sales.
- China Evergrande, a major property developer, has filed for bankruptcy protection, and China's largest developer, Country Garden, is on the verge of default.
### Summary
China's finance and water resources ministries have allocated 500 million yuan ($68.68 million) to aid disaster-stricken residents in national flood storage areas in restoring normal production.
### Facts
- 💰 China's finance and water resources ministries have allocated 500 million yuan ($68.68 million).
- 🌊 The funds aim to assist disaster-stricken residents in national flood storage areas.
- 🔄 The goal is to restore normal production as quickly as possible.
### Summary
China's foreign trade with other BRICS countries (Brazil, Russia, India, and South Africa) increased by 19.1% in the first seven months of 2023, reaching 2.38 trillion yuan ($326.85 billion).
### Facts
- 💼 In the January-July period of 2023, China's trade with other BRICS countries accounted for 10.1% of its total foreign trade value, rising by 1.6 percentage points.
- 📈 China's exports to BRICS countries reached 1.23 trillion yuan, showing a year-on-year growth of 23.9%.
- 📉 China's imports from BRICS countries amounted to 1.15 trillion yuan, with a year-on-year growth of 14.3%.
- 🌐 China's private companies expanded their trade with BRICS countries, with a trade volume of 1.36 trillion yuan, representing a year-on-year growth of 29.4% and accounting for 57.1% of the total trade volume between China and BRICS countries during the period.
- 🔧 Since its establishment in 2006, the BRICS mechanism has become a significant driver for global economic recovery and has continuously strengthened economic and trade cooperation among its member countries.
The International Monetary Fund reports that nations around the world indirectly subsidized fossil fuels by $7 trillion in 2022, despite the increasing dangers of greenhouse gas emissions and global heating.
A McKinsey Global Institute report highlights the need for $37 trillion in cumulative spending power increase by 2030 to achieve global economic empowerment, focusing on fulfilling essential needs such as nutrition, housing, healthcare, and education while also addressing environmental concerns. Economic empowerment and sustainability must go hand in hand, requiring additional investment of $47 trillion to achieve net-zero emissions, resulting in a total global investment of $84 trillion by 2030. While businesses and the market economy can contribute half of these resources, bridging the remaining gap will require new policies and incentives.
China's currency, the yuan, has depreciated over 8% against the dollar as the Chinese economy grows less than expected, making it harder to reach its growth target of 5% for 2023, and worries about the economy have intensified due to issues in the real estate sector and financial health of local governments, causing concerns about the future of the yuan which may experience a slow but steady depreciation in the face of a weak dollar and a desire to maintain a trade surplus.
China's R&D expenditure increased by over 10% in 2022 to reach more than 3.08 trillion yuan ($421 billion), but concerns arise as the proportion of funding allocated to basic research remains low, hindering the nation's development goals.
Record growth in clean energy technology could still limit global warming to 1.5 degrees Celsius, but an investment of nearly $4.5 trillion per year would be required by the start of the next decade, according to the International Energy Agency.
A new report from the International Energy Agency reveals that countries are making progress in deploying climate-friendly technologies, such as solar power and electric vehicles, and that there is still a pathway to achieving net-zero emissions by 2050 and limiting global warming to 1.5 degrees Celsius.
Achieving the transition to net-zero emissions by 2050 will require around $2 trillion annually by 2030, with the majority of funding coming from the private sector, as many emerging market and developing economies lack the necessary financial markets and credit ratings to attract international investors; furthermore, the current climate policies and commitments of major banks are not aligned with net-zero targets.
Developing countries require $2 trillion in annual climate investments, with the majority of the funding expected to come from the private sector, according to the IMF, who warns that relying on public funds could lead to high debts. The IMF suggests implementing carbon pricing schemes and emissions taxes, as well as tightening regulations for ESG labels and improving investment climates, to attract private investments for climate initiatives.
China has suffered economic losses of $42 billion over the first nine months of 2023 due to natural disasters, including torrential rains, landslides, hailstorms, and typhoons, which have caused deaths, massive flooding, and crop damage.
China's state-owned firms, known as "national champions," have been urged to strengthen their presence and invest more in addressing economic and technological bottlenecks caused by restrictions imposed by the US, according to a report by the Chinese Academy of Social Sciences. The report emphasizes the key role of state-owned enterprises in safeguarding industrial and supply chains in the face of external containment and supporting the country's economic development. Despite criticism, state firms have seen their stake in the Chinese economy grow significantly over the past decade, with assets reaching 308.3 trillion yuan ($42.27 trillion) in 2021.
China is considering increasing its budget deficit by an additional 1 trillion yuan ($137 billion) for infrastructure projects, surpassing its 3% GDP target and aiming to boost the economy.
China has imported a record amount of coal this year due to a spike in electricity demand caused by increased air conditioning usage and a decrease in hydropower generation, with imports expected to reach 470m metric tonnes in 2023, a 60% surge from 2022.
China is planning to approve over 1 trillion yuan ($137 billion) in additional sovereign debt issuance in order to stimulate infrastructure spending and boost economic growth.
China is set to approve over 1 trillion yuan ($137 billion) in additional sovereign debt issuance to boost infrastructure spending and support economic growth.
China plans to issue 1 trillion yuan in government bonds to stimulate its economy, aiming to drive domestic spending and support economic growth.
The International Energy Agency predicts that world fossil fuel demand will peak by 2030 due to the increase in electric cars and slower economic growth in China, undermining the need for further investment in the sector.
Emerging markets will require a $1.5 trillion investment by 2035 to make buildings environmentally friendly and prevent a surge in carbon emissions, particularly in China, according to the International Finance Corporation (IFC). The funds would be used to upgrade older buildings with cleaner energy and construct energy-efficient new buildings, with the aim of reducing construction-related emissions by 13%.
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