Why Is There So Much Talk of China’s Bleeding Money?

A ChinaFile Conversation

China has seen its foreign reserves depleted for months, but economists don’t agree about why: Is it because Chinese people are buying offshore assets, such as real estate? Because Chinese companies are paying down their foreign debt? Or both? Or is it because of something more to do with complex bets on foreign exchange movements? What explains why China’s foreign exchange reserves fell this spring to their lowest level since December 2011? And what long-term effects might this have on the U.S.-China relationship and China’s trade with the world?

Thilo Hanemann

Thilo Hanemann is an Economist at Rhodium Group (RHG) and leads the firm’s work on global trade and investment. Hanemann supports the investment management, strategic planning, and policy analysis requirements of RHG clients within his fields of expertise. He is also a Senior Policy Fellow at the Mercator Institute for China Studies, Europe’s biggest China think tank, located in Berlin.

Hanemann’s research focuses on new trends in global trade and capital flows, related policy developments, and the political and commercial dynamics of specific transactions. One of his areas of expertise is the rise of emerging economies as global investors, and the implications for host economies and the global economy. His most recent work focuses on the evolution of China’s international investment position, and the economic and policy implications of this new trend.