China - Tópico principal

[Incognitus]

Bem, isto vai produzir efeitos relevantes quando estoirar:
 
Special Report - China's answer to subprime bets: the "Golden Elephant"
http://www.reuters.com/article/2012/08/06/us-china-banks-idUSBRE87501T20120806

[jeab]

Bem, isto vai produzir efeitos relevantes quando estoirar:
 
Special Report - China's answer to subprime bets: the "Golden Elephant"
http://www.reuters.com/article/2012/08/06/us-china-banks-idUSBRE87501T20120806

"It is uncommon to find wealth management products that fail to clearly specify the underlying securitized assets,"
Alguns não serão autenticos esquemas Ponzi e ficam sem a intervenção Estatal? 

[John_Law]

Engraçado é que alguns dos trusts financiam projectos do Estado.

Como é que tem estado o imobiliário na China, aquela inversão que se começou a notar há uns meses - falada pelo Inc no antigo fórum - veio-se a confirmar?

[Incognitus]

Sazonalmente acabou agora o período mais favorável para o imobiliário, pelo que deve retomar a queda. O imobiliário, seja nos EUA, seja na China, tem um ciclo sazonal ao longo do ano.

[hermes]

Well, that has the potential of becoming the proverbial elephant in the room. 

[jeab]

    
Pode fazer mexer os mercados amanhã ...


Atentos esta noche a China

En China se publican esta madrugada en Europa:

- Producción industrial

- Inflación

- Ventas al por menor

http://www.serenitymarkets.com/ficha_comentario.asp?sec=9&id=154866#

[PMACS]

Maior fábrica do mundo já não é o que era

Muitas empresas escolheram a China para instalar unidades fabris, mas panorama está a mudar


Provavelmente, quando o leitor sai de casa, não demora muito até encontrar uma loja chinesa aberta a um domingo. Pois bem, os chineses em Portugal têm por hábito trabalhar todos os dias da semana. São um povo competitivo e o seu país já foi o paraíso para muitas empresas que ali encontraram mão de-obra barata e grande capacidade de trabalho.

Mas a China está a conhecer um rápido aumento dos custos salariais, que põem em perigo a sua competitividade, embora a produtividade continue a aumentar.

Segundo um estudo do banco Natixis, o custo da mão-de-obra na China será equivalente ao dos Estados Unidos dentro de apenas quatro anos, ao da Zona Euro dentro de cinco anos e ao do Japão dentro de sete.

Isso fará com que muitas empresas ligadas à indústria passem a produzir noutros países asiáticos, onde a mão-de-obra é ainda mais barata, antevê o banco francês.

Nesses países, ou até noutros. Esse cenário já se começa a verificar: várias empresas, como Sleek Audio, que fabrica auriculares ou a Adidas, decidiram mudar-se ou encerrar fábricas chinesas. A primeira, por exemplo, passou a produção para a Florida. A Adidas fechou a última fábrica que tinha na China, mas ainda mantém ali uma rede de 300 subcontratados.

Para se ter ideia de como a mão-de-obra é barata neste país, mas já foi mais, um trabalhador chinês da Adidas ganha, no mínimo, 258 euros (2 mil yuanes), ao passo que, no Cambodja, os funcionários da marca desportiva só recebem 107 euros.

A Foxconn, maior fabricante de componentes electrónicos e de computadores do mundo, ainda tem presença na China. No entanto, os seus trabalhadores mais jovens já não aceitam o paradigma de baixos salários e extensas horas de trabalho a que os seus pais se sujeitavam.

Sobre esta empresa, parceira da Apple na montagem de produtos como iPhone e iPad, ficará na memória a onde de suicídios entre os seus trabalhadores, por causa das condições de trabalho a que eram sujeitos.

O abrandamento da atividade industrial na China sinaliza uma mudança significativa na economia. O país deverá crescer apenas 7,5%, o valor mais baixo dos últimos anos.

http://www.agenciafinanceira.iol.pt/economia/china-fabrica-industria-competitividade-trabalho-produtividade/1366990-1730.html

[Incognitus]

ficará na memória a onde de suicídios entre os seus trabalhadores, por causa das condições de trabalho a que eram sujeitos

Provavelmente um mito igual ao da France Telecom. Quando se tem mais de um milhão de trabalhadores, é certo e garantido que alguns se suicidam, como em qualquer conjunto de 1 milhão de pessoas. Resta saber se se suicidaram a um ritmo superior ao que seria de esperar em tal população (na France Telecom isso não aconteceu). Para isso seria necessário saber o número de suicídios na Foxconn e a constituição da sua população por idades, e depois, as taxas de suicídio por idade na China. O único factor desfavorável à Foxconn é que os seus trabalhadores serão mais jovens que os da France Telecom e aí geralmente a taxa de suicídio é menor.

[Incognitus]

Tal como seria expectável ...
 
http://en.wikipedia.org/wiki/Foxconn_suicides
 

Although the number of suicides at the company is large in absolute terms, the suicide rate is still low compared to the rest of China^[8] although the country has a high suicide rate with over 20 deaths per 100,000 persons.^[14] In 2010, Foxconn's worst year for suicides with a total of 14 deaths, their total employee count was 930,000 people.^[15] The suicide rate for Foxconn that year was 1.5 per 100,000 making it well below the national average (around 7% of the national average). Even when calculated as if all the employee deaths were from the Shenzhen factory complex alone (to simulate a localised area suicide rate), which in 2010 had a workforce of 450,000,^[15] the rate is still well below the national average at 3.11 per 100,000 (around 14% the national average).

[John_Law]

São mudanças normais próprias do dinamismo duma economia globalizada. Segundo a concepção económica proteccionista anti-globalização isso não acontece.

[Jorge]

UBS Vs. Haitong Securities (Segundo maior broker da China).

http://www.cotizalia.com/en-exclusiva/2012/08/13/la-bolsa-china-divide-a-los-analistas-entre-alzas-del-20-o-mas-caidas---3243/

[jeab]

 

http://www.bloomberg.com/video/superyacht-maker-ferretti-sets-sail-for-china-wAgtCwXWRNG5WLkD3xF_nQ.html

[hermes]

Russia, China sign $25 billion energy deal

17 Feb 2009, 1721 hrs IST, AGENCIES
The Economic Times

http://economictimes.indiatimes.com/News/International_Business/Russia_China_sign_25_billion_energy_deal/rssarticleshow/4144419.cms

MOSCOW: Russia and China signed a $25 billion energy deal in Beijing on Tuesday that will see China secure oil supplies from Russia for the next 20 years in return for loans, Russia's state pipeline monopoly Transneft said.

As part of the broad energy supply deal, China will lend $15 billion to Rosneft, Russia's state-owned oil major, and $10 billion to Transneft, a vital boost for energy companies as they struggle to raise capital amid straitened lending conditions and plunging oil prices.

In return, Russia promised to guarantee annual oil supply of 15 million tons (300,000 barrels per day) for 20 years to its energy-hungry neighbor.

Igor Dyomin, Transneft's press spokesman, confirmed the outline of the deal.

The signing ceremony marks an end to months of talks between the neighbors after negotiations broke down amid disagreements over interest rates and state guarantees.

Russian crude will be supplied through a long-delayed pipeline project agreed to late last year. The pipeline, which extends from western Siberia to the Pacific coast, is to be linked to China from the Siberian city of Skovorodino, 70 kilometers (44 miles) north of the Sino-Russian border.

[hermes]

With Cash to Spend, China Starts Investing Globally

NY Times
By David Barboza
February 21, 2009

http://www.nytimes.com/2009/02/21/business/worldbusiness/21yuan.html?partner=rss&emc=rss

SHANGHAI — With the world suffering through a tight credit market, China has suddenly gone shopping.

Beijing said on Friday that one of its big state-owned banks, the China Development Bank, agreed to lend the Brazilian oil giant Petrobras $10 billion in exchange for sending China a long-term supply of oil.

That investment came after similar deals were signed this week with Russia and Venezuela, bringing China’s total oil investments this month to $41 billion.

China’s biggest aluminum producer also agreed earlier this month to invest $19.5 billion in Australia’s Rio Tinto, one of the world’s biggest mining companies. And last Monday, the China Minmetals Corporation bid $1.7 billion to acquire Australia’s OZ Minerals, a huge zinc mining company...

China wants reliable supplies of crude oil, to fuel its growing transport sector; it needs iron ore for steel production, and copper and aluminum to build homes and consumer goods...

Analysts say China could continue to make deals for a variety of small oil and gas companies, mineral producers and mining firms.

This week, for instance, shares of the Australian miner Fortescue Metals Group rose after reports the company was in talks with China over a big investment to help the company expand.

In many cases, China has struck deals in countries that have access to large supplies of oil and minerals but where American and European countries are not well-positioned, like parts of Africa and the Middle East.

In one deal this week, China made an alliance with the government of Hugo Chávez, the president of Venezuela, who has denounced American leadership.

While the oil deals announced vary in terms, analysts say they ensure China a steady supply of oil for decades to come, sometimes at favorable prices....

[hermes]

China, Argentina to conduct trade in Chinese currency

China and Argentina in Currency Swap

By Jude Webber
Financial Times, London
Tuesday, March 31, 2009

http://www.ft.com/cms/s/0/eba6405c-1d7e-11de-9eb3-00144feabdc0.html

SANTIAGO, Chile -- China, which is pushing to end the dominance of the dollar as a worldwide reserve, has agreed a 70 billion renminbi currency swap with Argentina that will allow it to receive renminbi instead of dollars for its exports to the Latin American country.

Xinhua, the official Chinese news agency, said the deal was signed on Sunday by Zhou Xiaochuan, governor of the People's Bank of China, and Martín Redrado, Argentine central bank president, in Medellín, Colombia, where they are attending a meeting of the Inter-American Development Bank.

An Argentine official confirmed a deal had been discussed and said the fine print was being worked out and negotiations were "very advanced."

Beijing has signed 650 billion renminbi ($95 billion, E72 billion, L67 billion) of deals since December with Malaysia, South Korea, Hong Kong, Belarus, Indonesia, and, now, Argentina in an attempt to unblock trade financing that has been severely curtailed by the crisis.

Gordon Brown, UK prime minister, told a summit in Chile at the weekend that this week's Group of 20 meeting in London, which both China and Argentina will attend, needed to ensure vast trade credits were unlocked to help get the world economy back on its feet. The World Bank estimates as much as $300 billion (E227 billion, L210 billion) could be needed.

China has suggested replacing the dollar with an enhanced version of the International Monetary Fund's unit of account, the special drawing right or SDR. The dollar's future as the world's reserve currency will be on the G20 agenda.

Economists say the SDR plan is unfeasible for now but see Beijing's currency swap deals as pieces in a jigsaw designed to promote wider international use of the renminbi, starting with making it more acceptable for trade and aiming at establishing it as a reserve currency in Asia, something that would also enhance China’s political clout.

The deals underscore China's loss of faith in the US currency amid the fallout from the financial crisis. The Argentine accord will also boost China's financial presence in Latin America.

Mr Redrado voiced support for China's call for a new currency reserve regime at his meeting with Mr Zhou. "One of the issues was this idea to incorporate other options to the dollar. There was a lot of consensus on this," the Argentine official told the Financial Times.

[hermes]

China expands currency swaps to avoid trading in dollars

By Bob Chen and Judy Chen
Bloomberg News
Thursday, April 2, 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=a.lhD2W5k.lY&refer=home

HONG KONG / SHANGHAI -- China's leaders, increasingly concerned about the nation's $740 billion of U.S. Treasuries, are making it easier for trading partners and consumers to do business in yuan.

The People's Bank of China has agreed to provide 650 billion yuan ($95 billion) to Argentina, Belarus, Hong Kong, Indonesia, Malaysia, and South Korea through so-called currency swaps. More such arrangements are being planned so importers can avoid paying for Chinese goods with dollars, the central bank said. In Hong Kong, which has pegged the currency to its U.S. counterpart since 1983, stores from Park'n Shop supermarkets to jewelers accept yuan.

Chinese officials are using the Group of 20 meeting, which begins today in London, to call for reducing the dollar’s role and the creation of a new global reserve currency. Premier Wen Jiabao has said he's concerned that a weaker greenback will erode the value of China's Treasuries as the U.S. tries to spend its way out of the longest recession since the 1930s.

"China has learned from this financial crisis that we must reduce reliance on the dollar and promote the yuan as a regional or international currency," Zhang Ming, secretary general of the international finance research center at the Chinese Academy of Social Sciences said in a March 31 interview in Beijing. "We need to shield our economy from any more turmoil in the U.S."

The yuan has risen 21 percent to 6.8343 per dollar since the central bank scrapped a fixed exchange rate in July 2005. China has limited its advance to 2.7 percent in the past year as a stronger currency made the nation's exports less competitive at a time when the economy is growing at the slowest pace in seven years. Gross domestic product will expand 6.5 percent in 2009, from 9 percent last year, according to the World Bank.

Wen said on March 13 that China, the world's biggest holder of foreign exchange reserves, wants guarantees for the safety of its U.S. assets. The Fed last month announced a $1.15 trillion plan to buy Treasuries and mortgage-related bonds, boosting supply of the currency.

Anxiety increased in the past year because the dollar's gains were driven in part by investors fleeing riskier assets after the bankruptcy of Lehman Brothers Holdings Inc. in September froze credit markets. The PBOC said March 31 its swaps were designed to help developing nations running short of dollars "cope with the current crisis."

The Dollar Index, which the ICE uses to track the greenback against the euro, yen, pound, Canadian dollar, Swiss franc, and Swedish krona, rallied 18 percent in the past year. It dropped 2.9 percent last month as the Fed started buying Treasuries.

PBOC Governor Zhou Xiaochuan asked the International Monetary Fund on March 23 to expand the use of so-called Special Drawing Rights, which are valued against a basket of currencies, and move toward a "super-sovereign reserve currency." G-20 members Russia and Indonesia supported the proposal, which would reduce the volatility of reserves.

China and its Asian allies will adopt a "mild approach" on the plan to avoid driving down the value of U.S. investments, said Lee Chi Hun, deputy director at Korea Centre for International Finance, a Seoul-based government research agency.

"A rapid collapse in the dollar system will cause damage to those who hold the most dollar assets," said Lee. The proposal is "a strong warning for the U.S. to protect the value of Chinese assets," he said.

The dollar made up 64 percent of the world's $6.71 trillion foreign-exchange reserves at the end of last year, down from 64.4 percent in September and 72.7 percent in June 2001, IMF data shows. The yuan can't be a reserve currency because it isn't fully convertible.

"It's very premature to think the U.S. dollar can be replaced," said Diane Lin, a Sydney-based fund manager at Pengana Capital, which oversees about $1.9 billion. "The Chinese yuan will eventually become a convertible currency internationally. But we are talking about a timeframe of over five years."

China, the world's second-largest exporter after Germany, according to the World Trade Organization, is turning to other strategies to reduce its dependence on the U.S. currency.

Bank of China Ltd., the nation's largest foreign-exchange lender, has started trials for the yuan settlement program in Shanghai and Hong Kong, President Li Lihui said in Beijing last month. While China allowed the currency to be used for trading goods and services in December 1996, it had to be converted before cross-border payments were made.

Controls on buying or selling yuan for investment are also being eased. The government said on Dec. 9 it will triple the amount of domestic securities that overseas funds can buy under the qualified foreign institutional investors program to $30 billion, without giving a timeframe.

"The next step will probably be to allow use of yuan in trade with more regions or nations," said Chan Wing Kee, managing director of Hong Kong-based Yangtzekiang Garment Ltd., which makes GAP and Levi's clothes. "I'm pretty sure the yuan has more potential to strengthen than the dollar, the euro, the pound, and the yen."

Indonesian companies will be able to buy Chinese goods using yuan for the first time after last month's 100 billion yuan currency swap, Bank Indonesia Deputy Governor Hartadi Sarwono said yesterday in Jakarta.

"Importers don't need to use dollars and they can directly pay their import bills with yuan," Sarwono said. "This will reduce pressure in the dollar market and help stabilize the foreign-exchange rate."

Hong Kong banks have been able to accept yuan deposits since 2004 and stores have increasingly welcomed payment in China's currency since 2003, when a relaxation of visa controls led to a surge in the number of mainlanders visiting the city.

"A lot of tourists were bringing nothing but cash for purchases so we had to adapt as retailers," said Caroline Mak, chairman of the Hong Kong Retail Management Association. "Watch -- even jewelry shops, they all take yuan now."

[hermes]

A 'copper standard' for world currency?

By Ambrose Evans-Pritchard
The Telegraph, London
Wednesday, April 15, 2009

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html

Hard-money enthusiasts have long watched for signs that China is switching its foreign reserves from US Treasury bonds into gold bullion. They may have been eyeing the wrong metal.

China's State Reserves Bureau (SRB) has instead been buying copper and other industrial metals over recent months on a scale that appears to go beyond the usual rebuilding of stocks for commercial reasons.

Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can.

"China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get 10 times the impact, and can cover their infrastructure for 50 years."

"The next industrial revolution is going to be led by hybrid cars, and that needs copper. You can see the subtle way that China is moving into 30 or 40 countries with resources," he said.

The SRB has also been accumulating aluminium, zinc, nickel, and rarer metals such as titanium, indium (thin-film technology), rhodium (catalytic converters), and praseodymium (glass).

While it makes sense for China to take advantage of last year's commodity crash to restock cheaply, there is clearly more behind the move. "They are definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank.

John Reade, metals chief at UBS, said Beijing may have a made strategic decision to stockpile metal as an alternative to foreign bonds. "We're very surprised by Chinese demand. They are buying much more copper than they will need this year. If this is strategic, there may be no effective limit on the purchases as China's pockets are deep."

Zhou Xiaochuan, the central bank governor, piqued the interest of metal buffs last month by calling for a world currency modelled on the "Bancor," floated by John Maynard Keynes at Bretton Woods in 1944.

The Bancor was to be anchored on 30 commodities -- a broader base than the gold standard, which had caused so much grief in the 1930s. Mr Zhou said such a currency would prevent the sort of "credit-based" excess that has brought the global finance to its knees.

If his thoughts reflect Communist Party thinking, it would explain the bizarre moves in commodity markets over recent weeks. Copper prices have surged 49 percent this year to $4,925 a tonne despite estimates by the CRU copper group that world demand will fall 15 to 20 percent this year as construction wilts.

Analysts say "short covering" by funds betting on price falls has played a role. But the jump is largely due to Chinese imports, which reached a record 329,000 tonnes in February and a further 375,000 tonnes in March. Chinese industrial demand cannot explain this. China has been badly hit by global recession. Its exports -- almost half GDP -- fell 17 percent in March.

While Beijing's fiscal stimulus package and credit expansion have helped lift demand, China faces a property downturn of its own. One government adviser warned this week that house prices could fall 50 percent.

One thing is clear: Beijing suspects that the US Federal Reserve is engineering a covert default on America's debt by printing money. Premier Wen Jiabao issued a blunt warning last month that China was tiring of US bonds. "We have lent a huge amount of money to the US, so of course we are concerned about the safety of our assets," he said.

This is slightly disingenuous. China has the world's largest reserves -- $1.95 trillion, mostly in dollars -- because it has been holding down the yuan to boost exports. This mercantilist strategy has reached its limits.

The beauty of recycling China's surplus into metals instead of US bonds is that it kills so many birds with one stone: It stops the yuan rising without provoking complaints of currency manipulation by Washington; metals are easily stored in warehouses, unlike oil; and the holdings are likely to rise in value over time since the earth's crust is gradually depleting its accessible ores. Above all, such a policy safeguards China's industrial revolution, while the West may one day face a supply crisis.

Beijing may yet buy gold as well, although it has not done so yet. The gold share of reserves has fallen to 1 percent, far below the historic norm in Asia. But if a metal-based currency ever emerges to end the reign of fiat paper, it is just as likely to be a copper standard as a gold standard.

[hermes]

Brazil and China work together to replace dollar

By Jonathan Wheatley
Financial Times, London
Monday, May 18, 2009

http://www.ft.com/cms/s/0/996b1af8-43ce-11de-a9be-00144feabdc0.html?nclick_check=1

SAO PAULO, Brazil -- Brazil and China will work toward using their own currencies in trade transactions rather than the US dollar, according to Brazil's central bank and aides to Luiz Inácio Lula da Silva, Brazil's president.

The move follows recent Chinese challenges to the status of the dollar as the world's leading international currency.

Mr Lula da Silva, who is visiting Beijing this week, and Hu Jintao, China's president, first discussed the idea of replacing the dollar with the renminbi and the real as trade currencies when they met at the G20 summit in London last month.

An official at Brazil's central bank stressed that talks were at an early stage. He also said that what was under discussion was not a currency swap of the kind China recently agreed with Argentina and which the US had agreed with several countries, including Brazil.

"Currency swaps are not necessarily trade-related," the official said. "The funds can be drawn down for any use. What we are talking about now is Brazil paying for Chinese goods with reals and China paying for Brazilian goods with renminbi."

Henrique Meirelles and Zhou Xiaochuan, governors of the two countries' central banks, were expected to meet soon to discuss the matter, the official said.

Mr Zhou recently proposed replacing the US dollar as the world's leading currency with a new international reserve currency, possibly in the form of special drawing rights (SDRs), a unit of account used by the International Monetary Fund.

In an essay posted on the People's Bank of China's website, Mr Zhou said the goal would be to create a reserve currency "that is disconnected from individual nations."

In September, Brazil and Argentina signed an agreement under which importers and exporters in the two countries may make and receive payments in pesos and reals, although they may also continue to use the US dollar if they prefer.

An aide to Mr Lula da Silva on his visit to Beijing said the political will to enact a similar deal with China was clearly present. "Something that would have been unthinkable 10 years ago is a real possibility today," he said. "Strong currencies like the real and the renminbi are perfectly capable of being used as trade currencies, as is the case between Brazil and Argentina."

In what was interpreted as a sign of Chinese concern about the future of the dollar, the governor of China's central bank proposed in March that the US dollar be replaced as the world's de-facto reserve currency.

In an essay posted on the People's Bank of China's website, Zhou Xiaochuan, the central bank's governor, said the goal would be to create a reserve currency "that is disconnected from individual nations" and modelled on the International Monetary Fund's special drawing rights, or SDRs.

Economists have argued that while the SDR plan is unfeasible now, bilateral deals between Beijing and its trading partners could act as pieces in a jigsaw designed to promote wider international use of the --renminbi.

Any move to make the renminbi more acceptable for international trade, or to help establish it as a regional reserve currency in Asia, could enhance China's political clout around the world.

[hermes]

Russia may swap Treasuries for IMF debt

By Alex Nicholson
Bloomberg News
Wednesday, June 10, 2009

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTtE7kXVBlHk

MOSCOW -- Russia's central bank said it may cut investments in U.S. Treasuries, currently valued at as much as $140 billion, a week after China said it may reduce reliance on the dollar and American bonds.

Treasuries fell after Alexei Ulyukayev, first deputy chairman of Bank Rossii, said some reserves may be moved into International Monetary Fund debt. The yield on the 10-year note rose six basis points, or 0.06 percentage point, to 3.92 percent as of 8:27 a.m. in New York, according to BGCantor Market Data.

Finance Minister Kudrin said on May 26 Russia will buy $10 billion of IMF bonds from the reserves and China may buy as much as $50 billion, IMF Managing Director Dominique Strauss-Kahn said yesterday. Some investors are wary of U.S. assets because the budget deficit is projected to reach $1.75 trillion in the year ending Sept. 30 from last year’s $455 billion, the Congressional Budget Office says.

"The bigger picture is people are worried there are too many Treasuries, and that no one is even making a pretense of getting the fiscal deficit under control," said Francis Beddington, co-founder of Insparo Asset Management, which oversees about $140 million in London. By Andre Soliani and Telma Marotto

Brazil will use part of its reserves to provide $10 billion in financing to the IMF, Finance Minister Guido Mantega said in Brasilia today.

Bond investors have driven up the yield on the benchmark 10-year Treasury note, which helps to set rates on everything from mortgages to corporate bonds, to 3.94 percent from the record low of 2.035 percent in December. The rate is still below the average of 6.49 percent over the past 25 years, and will likely stay below 4 percent through at least the first quarter of next year, according to the median estimate of 57 economists surveyed by Bloomberg.

Treasury Secretary Timothy Geithner said in Beijing on June 2 there will be enough demand for record sales of U.S. debt. He met with Chinese officials after Premier Wen Jiabao called in March for the U.S. "to guarantee the safety of China's assets" and central bank Governor Zhou Xiaochuan proposed a new global currency to reduce reliance on the dollar.

China, Russia, and Brazil are among a handful of nations that have expressed interest in purchasing the securities.

China is "actively" considering buying as much as $50 billion of the IMF bonds, the State Administration of Foreign Exchange said last week.

IMF securities would give countries a different way to contribute to the fund and are unlike traditional bonds because they pay an interest rate pegged to the IMF’s basket of currencies, known as Special Drawing Rights.

Ulyukayev said Russia will cut the share of U.S. Treasuries "because a window of opportunity for working with other instruments is opening," according to Interfax news wire. Russia may also place more of the reserves in deposits with foreign banks, he said. The remarks were confirmed by a Bank Rossii official who declined to be named, citing bank policy.

Maxim Oreshkin, head of research at OAO Rosbank in Moscow, said the shift into IMF debt won't happen immediately.

"The central bank has never stood out for making fast moves with its reserves," Oreshkin said. "If it changes certain groups it will happen smoothly." Investing in the IMF may bring "political dividends" for Russia as it 'raises the role of Russia in the IMF."

Still, Brazil, Russia, India, and China increased foreign reserves by more than $60 billion last month to limit currency gains as the first global recession since World War II restricted exports, data compiled by central banks and strategists show. Russia added the most foreign exchange since July.

President Dmitry Medvedev questioned the U.S. dollar’s future as a global reserve currency last week and said that using a mix of regional currencies would make the world economy more stable. He renewed his call for consideration of a supranational currency to challenge the dollar.

The IMF, which has rescued economies from Pakistan to Iceland in the past year, has never issued bonds and is seeking more cash to finance loans and aid to member countries during the worst economic slump in the fund’s 64-year history.

[hermes]

BRICs May Buy Each Other's Bonds in Shift from Dollar

By Lyubov Pronina and Alex Nicholson
Bloomberg News
Tuesday, June 16, 2009

http://www.bloomberg.com/apps/news?pid=20601080&sid=a3VqQW.OiRqY

Brazil, Russia, India, and China are considering buying each other's bonds and swapping currencies to lessen dependence on the U.S. dollar as their leaders meet for a summit in Russia's Ural Mountains.

The leaders of the so-called BRIC countries will discuss measures to promote regional currencies, including "possibly placing part of reserves in the financial instruments of partner countries," during their meeting in Yekaterinburg, Arkady Dvorkovich, Russian President Dmitry Medvedev’s top economic adviser, told reporters.

The BRIC countries have combined reserves of $2.8 trillion and are among the biggest holders of U.S. Treasuries. The first BRIC summit comes after Brazil, China and Russia announced plans to shift some foreign reserves into International Monetary Fund bonds, driving Treasuries and the dollar lower.

"This is not something for the immediate future, but rather a direction of movement," said Stanislav Ponomarenko, a fixed-income analyst at ING Groep NV in Moscow. "I don't think more than a few percent of reserves could be reinvested into BRIC bonds. What we're seeing is a continuation of discussions to find an alternative to the dollar, yet nobody is going fundamentally to alter anything yet."

Brazil's zero-coupon bonds due January 2010 rose today, pushing the yield down less than a basis point to 9.005 percent, the lowest level on record, prices compiled by Bloomberg show. Russia’s 11 percent dollar-denominated bonds due July 2018 were little changed, yielding 4.877 percent, according to ING Groep NV data on Bloomberg. The yield on India's 6.07 percent note due May 2014 climbed 4 basis points to 6.67 percent. China’s 3.02 percent bonds maturing May 2019 were unchanged, yielding 3.15 percent.

The ruble strengthened 0.7 percent to 31.0926 against the dollar at 16:42 p.m. in Moscow after earlier weakening as much as 0.3 percent.

Medvedev is hosting back-to-back summits of developing economies in Yekaterinburg as he seeks to ease the world economy's dependence on the U.S. dollar. Medvedev began talks this afternoon with Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh and Brazilian President Luiz Inacio Lula da Silva.

The summit will be "a launch pad for our future talks," Medvedev said at the start of the meeting. The talks would give the countries the opportunity to "implement new economic programs and reform international financial relations," he said.

Medvedev and Hu earlier today attended a summit of the Shanghai Cooperation Organization, which also includes the four former Soviet republics of Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan.

The Russian leader reiterated his intention to push for the creation of a "supranational currency" to challenge the dollar and encouraged China and called on other Shanghai group members to use each other’s currencies for trade.

"There can be no successful global currency system if the financial instruments that are used are denominated in only one currency," Medvedev said. "Today this is the case and the currency is the dollar."

Hu pledged $10 billion to help the Shanghai group's Central Asian members weather the global recession, joining Russia in seeking greater influence in the region through aid. Medvedev in February said Russia would contribute $7.5 billion to a regional fund created by the Eurasian Economic Community, which also includes Belarus, Kazakhstan, Kyrgyzstan, and Tajikistan.

Today's meetings "show a very strong desire of developing countries to play a bigger role in world finance, especially given the growing insecurity related to the current crisis," said Masha Lipman, a political analyst at the Carnegie Center in Moscow, in an interview with Bloomberg Television today.

On June 10, Alexei Ulyukayev, first deputy chairman of Russia's central bank, said Russia may move some of its reserves from Treasuries into IMF bonds. About 30 percent of Russia’s international reserves, which stand at $409.5 billion, are currently held in Treasuries, he said.

Russian Finance Minister Alexei Kudrin said on June 13 that the dollar's "fundamental indicators" are "fine" and that he was confident in the currency's strength. A week earlier, Medvedev said the dollar isn't in "a spectacular position" and questioned its future as a global reserve currency.

Dvorkovich said the positions of Medvedev and Kudrin aren't contradictory and that the Russian government is united on its dollar policy.

"In the long term, it is beneficial for all and all agree that the world needs a few strong currencies," Dvorkovich said. "It cannot happen quickly."