Why is China hiding 700 billion dollars?

China runs large trade surpluses with the United States. Typically these funds would be returned to the US as capital investments, either through buys of fixed assets, securities, or lending.

China, however, is liquidating stakes in companies in the United States, and is selling off its portfolio of Treasury bonds.

These two trends are resulting in enormous imbalances in Balance of Payments, which much be re-balanced via China's central banking activities. China is clearly recycling giant capital pools from the United States for investment purposes inside China, and among China's top trading partners.

And because the US dollars are never returned to the capital markets, it is also clear that China and the BRICS countries are setting up their own trading and economic bloc, funded largely with US debt instruments.

(Editor note: At about the 2:00 mark, I misspoke. The US ran a trade deficit of approximately $800 billion, not surplus. Apologies.)

Resources and links:

Bloomberg, US Trade Deficit Widens to $78.8 Billion, Largest in Two Years

Why is China dumping US Treasuries for gold?

Vanishing Act: The Shrinking Footprint of Chinese Companies in the US

China Should Explain ‘Enormous’ Data Gaps, US Ex-Official Says

Bloomberg, China Plans to Sell Dollar Bonds in Saudi Arabia as Ties Deepen

The Economist, Chinese firms are growing rapidly in the global south

Closing scene, Yangzhou Gardens, Jiangsu

[talkdatrue]

Why China has to justify itself what they do with their money???

[John-yxyz]

Why would China want to keep their dollars in the US and risk having it confiscated? If I had dollars there, I'd take it out too.

[skyfall]

If I'm being bullied at school, I do my best to avoid the bully at school and I won't tell the bully where I'll be.

[banshong]

😂😂😂you all wanted de-coupling. This is how China does de-coupling and de-risking

[iWantPeace]

I think I'm entitled to do whatever with the money that I earned. I owe nobody an explanation.

[laohu]

There is a lot of good channels on YouTube this one is among one of the best.

[Truthstelling]

You bought the goods. You paid the money. The deal is done. Why do you care about the Missing Money?

[lincolnteh]

Countries are sovereign, freedom to spend, save, or hide.

[FaiziTimber]

After ceasing the Afghanistan's reserves and Russian reserves in US banks . The US should expect others to not trust them and withdraw the money from US banks .

[huanghermann]

700 billions dollar for a large country such as China is not a big amount of money.

[hadi]

It's no longer your dollar, once you exchange it for something, what the recipient does with it afterwards is none of yours or anybody else's business.

[MASMIWA]

Remember, China is also buying gold with its dollars and brining all its gold abroad back to China.

[Trueye-slmr]

Why should China explain to the US regulator?

[semqueixas]

The Chinese are outsmarting US in their own game. 😂

[Humphrey-kf]

If you are not in the financial market right now, you are making a huge mistake. I understand that it could be due to ignorance, but if you want to make your money work for you...prevent inflation

[skydragon]

China is like creating a secondary FED outside U.S. for trading purposes.

[sergioestevao]

I believe thats one of the reasons why the trade war stared and its getting out of hand. USA, just can't control the chineses as it did with Japan and others... Chinses are toooo smart for that.. By the way, as always, great video...

[patriknorsten]

Just fantastic to bee able to watch your videos for free. So educational and well presented. Thank you for your effort to educate the masses! Cheers from Sweden!

[martinhovorka]

It is impossible to repatriate dollars unless it is cash. Dollars issued by the central bank are only held at the central bank and other banks only refer to the dollars they hold at the central bank. The only options are to offset payables and receivables in dollars when no dollars are transferred or to use gold or other currencies. But China has chosen to spend the dollars on investments in other countries before they are devalued or confiscated.

[jjsmith]

how arrogant of us to require china to explain balance of paykments data