{"id":289262,"date":"2025-03-10T12:00:58","date_gmt":"2025-03-10T12:00:58","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=289262"},"modified":"2025-03-06T06:30:53","modified_gmt":"2025-03-06T06:30:53","slug":"quantitative-easing-with-chinese-characteristics-how-to-fund-an-economic-miracle","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2025\/03\/quantitative-easing-with-chinese-characteristics-how-to-fund-an-economic-miracle\/","title":{"rendered":"\u2018Quantitative Easing with Chinese Characteristics\u2019: How to Fund an Economic Miracle"},"content":{"rendered":"

11 Feb 2025 –\u00a0<\/em>China went from one of the poorest countries in the world to global economic powerhouse in a mere four decades. Currently featured in the news is DeepSeek, the free, open source A.I. built by innovative Chinese entrepreneurs which just\u00a0pricked the massive U.S. A.I. bubble<\/a>.<\/p>\n

Even more impressive, however, is the\u00a0infrastructure China has built<\/a>, including 26,000 miles of high speed rail, the world\u2019s largest hydroelectric power station, the longest sea-crossing bridge in the world, 100,000 miles of expressway, the world\u2019s first commercial magnetic levitation train, the world\u2019s largest urban metro network, seven of the world\u2019s 10 busiest ports, and solar and wind power generation accounting for over 35% of global renewable energy capacity. Topping the list is the Belt and Road Initiative, an infrastructure development program involving 140 countries, through which China has invested in ports, railways, highways and energy projects worldwide.<\/p>\n

All that takes money. Where did it come from? Numerous funding sources are named in mainstream references, but the one explored here is a rarely mentioned form of\u00a0quantitative easing\u00a0<\/a>\u2014 the central bank just \u201cprints the money.\u201d (That\u2019s the term often used, though printing presses aren\u2019t necessarily involved.)<\/p>\n

From 1996 to 2024, the Chinese national money supply increased by a factor of more than 53 or 5300% \u2014 from 5.84 billion to 314 billion Chinese yuan (CNY) [see charts below]. How did that happen? Exporters brought the foreign currencies (largely U.S. dollars) they received for their goods to their local banks and traded them for the CNY needed to pay their workers and suppliers. The central bank \u2014the Public Bank of China or PBOC \u2014 printed CNY and traded them for the foreign currencies, then kept the foreign currencies as reserves, effectively doubling the national export revenue.<\/p>\n

Investopedia confirms<\/a>\u00a0that policy, stating:<\/p>\n

One major task of the\u00a0Chinese central bank<\/a>, the PBOC, is to absorb the large inflows of foreign capital\u00a0from\u00a0China\u2019s trade surplus. The PBOC\u00a0purchases\u00a0foreign currency from\u00a0exporters\u00a0and issues that currency in local yuan.\u00a0The PBOC is free to publish any amount of local currency\u00a0and have it\u00a0exchanged for forex. \u2026 The PBOC can print yuan as needed\u00a0<\/em>\u2026.\u00a0[Emphasis added.]<\/p><\/blockquote>\n

Interestingly, that huge 5300% explosion in local CNY did not trigger runaway inflation. In fact China\u2019s consumer inflation rate, which was as high as 24% in 1994, leveled out after that and\u00a0averaged 2.5% per year<\/a>\u00a0from 1996 to 2023.<\/p>\n

TO CONTINUE READING Go to Original – ellenbrown.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

China went from one of the poorest countries in the world to global economic powerhouse in a mere four decades. Even more impressive is the\u00a0infrastructure it has built, including 26,000 miles of high speed rail, the world\u2019s largest hydroelectric power station, the longest sea-crossing bridge in the world, 100,000 miles of expressway, …<\/p>\n","protected":false},"author":4,"featured_media":179118,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[244,331,354,562],"class_list":["post-289262","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-transcend-members","tag-china","tag-development","tag-economics","tag-finance"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/289262","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=289262"}],"version-history":[{"count":2,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/289262\/revisions"}],"predecessor-version":[{"id":289271,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/289262\/revisions\/289271"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/179118"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=289262"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=289262"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=289262"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}