China Credit Strategies

During last months or even year, i exposed many times my thought on geo-political restructuring, and how next 50 years scenario could be on the historical data forecast, which include a large margin of mistake.

I already talked about China good's export predominance in two of my works ( Università Bocconi New generation EU contest - A DECADE VIEW ON TESLA " publicly shared on LinkedIn ")

Instead, this time i want to report some data i collected after the reading of a great publishing made by AidData " https://lnkd.in/dvgRPP6".

Data to focus on:

- Export-Import Bank of China, (one of the three institutional banks in China set up to implement state policies on industry, foreign trade, economy and foreign aid in other countries) with 76% of contracts registered an amount of 15,95B (usd) while China Development Bank (headed by a governor-level government minister, under the direct jurisdiction of the State Council) with only 8% of total contracts registered an amount of 16,10B (usd).

- 47% of total international contracts is to Africa.

This great percentage can be easily linked to two other data

1) Lithium exportation leaded by China and US

( Exported Lithium Batteries (US$): United States $422,938,000 China$344,131,000 )

2) Cobalt exportation leaded by Republic Of Congo, which has a contractual credit relationship of 891,57 Mln USD with CCP, and also another relationship which include the second largest cobalt mine owned by a chines company, which is China Molybdenum, with a particular shareholders board :

GIC Pte Ltd. (Investment Management) (owned by the Government of Singapore) 8.09%

Yong Yu 7.70%

UBS Asset Management Switzerland 7.11%

JPMorgan Asset Management (Asia Pacific) Ltd 5.68%

The Vanguard Group, Inc. 3.19%

- Confidentiality clause where the parties to the agreement agree that each shall treat as confidential all information provided by a party to the others regarding such party’s business and operations. So the terms of the agreement, shall not be disclosed to any third party without the prior consent of such providing party.

As you can see from the columns chart ( first on the left ) that analyze a sample of x contracts with and without this clause from 2000 to 2021, the confidentiality ones are basically the the overwhelming percentage majority.

You can build your tough on the other tables i exposed but the general idea , is that the new credit policies is not composed by coincidences and in particular:

- types of credits participation

- borrower's income bracket

- guarantors activities ( see credit income bracket and creditor type tables )

Are leading the new type of geopolitical growth, which is the economic one.

I want to conclude by bringing up a personal example in economy studies: Milton Freedman: "There is no political freedom without economic liberty and no economic development in a non-free country"

So this thesis does not hold true for China?