China. Taming the Dragon. A little History…. China Proper was unified for the first time in 221 B.C. Once the king of Qin consolidated his power, he took the title Shi Huangdi (First Emperor). A little History….
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Taming the Dragon
China Proper was unified for the first time in 221 B.C. Once the king of Qin consolidated his power, he took the title Shi Huangdi (First Emperor)
To fend off barbarian intrusion from the north, fortification walls were connected to make a 5,000- kilometer-long great wall. (What is commonly referred to as the Great Wall is actually four great walls rebuilt or extended during the Western Han, Sui, Jin, and Ming periods)
Genghis Khan (1167?-1227) supreme leader of all Mongol tribes invades China in the mid 13th century
Kublai Khan, grandson of Genghis Khan establishes the first alien dynasty to rule all China--the Yuan (1279-1368).
Marco Polo visits China in 1271
Emperor Tai Zu, founded the Ming Dynasty in 1368. He first applied himself to the task of expelling the Mongols.The Great Wall was rebuilt to the form that we know it today.
The Ming dynasty ended upon the arrival of the Manchus, who were invited to end a domestic rebellion, but decided instead to stay and take over the country!
There was increasing European demand for tea, silk, and porcelain from China, but the Chinese didn’t want anything the Europeans had to offer ….the problems was solved by including India
The emperor tried to end the opium trade by seizing opium imports. The British responded by crushing the Chinese (the Opium War) – The British were awarded the island of Hong Kong
Frequent uprisings and rebellions ultimately ended the dynastic system. The republican revolution broke out on October 10, 1911.On March 10, in Beijing, Yuan Shikai was sworn in as provisional president of the Republic of China
On October 1, 1949, the People's Republic of China was formally established, with its national capital at Beijing. The country was led by the Chinese Communist Party under the Chairmanship of Mao Zedong
China adopted “Five Year Plans” to achieve industrialization and agricultural collectivism. The most noted of these plans was the “Great Leap Forward” which was a disaster!
Hu Jintao became head of China's ruling Communist Party in late 2002
Recently, China outspent the US in virtually every commodity!!
Implied “Neutral” Interest Rate: 9.1%
8.28 Yuan = $1
People’s Bank of China
$900B (Foreign Reserves
2.3T Yuan (Currency)
3.3T Yuan (Reserve)
296B Yuan (Gov’t Bonds)
2.0T Yuan (Other)
7.8T Yuan (Total Assets)
7.8T Yuan (Total Liabilities)
To keep the Yuan weak, the Chinese continue to buy US Treasuries. They currently own about $609B. (They increased their holdings by $100B in the last year!
Recent Productivity gains (with the exception of Telecommunications) is less than stellar!
Government Deficit (% of GDP)
China’s trade surplus has shrunk since 1996
Just the facts ma’am.
Most of China’s capital inflow is FDI (US companies setting up subsidiaries). IF economic conditions change, FDI is not easy to reverse quickly.