The Biggest Problem China Faces Isn’t Real Estate

The Biggest Problem China Faces Isn’t Real Estate
A Chinese bank employee counts 100-yuan notes and U.S. dollar bills at a bank counter in Nantong in eastern China's Jiangsu Province on Aug. 6, 2019. STR/AFP via Getty Images
Christopher Balding
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Commentary

After it joined the World Trade Organization in 2000 and anchored the Chinese yuan to the U.S. dollar, China linked its economy to the United States. Enforcing a fixed exchange rate regime with strict capital controls, China benefited from large inflows and relatively low-interest rates largely because of the low-interest-rate environment in the United States. What happens to the Chinese economy when interest rates increase in the United States?

Christopher Balding
Christopher Balding
Author
Christopher Balding was a professor at the Fulbright University Vietnam and the HSBC Business School of Peking University Graduate School. He specializes in the Chinese economy, financial markets, and technology. A senior fellow at the Henry Jackson Society, he lived in China and Vietnam for more than a decade before relocating to the United States.
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