Can Bitcoin be the answer for China’s Corporative Debt?


The world economy is very complex; what an economic power like China do or do not do can affect or benefit the entire economic community which has bounds of commercial, political, corporate exchange, among others, with other countries, this analysts are pending signals emitted by a nation in this case it is China’s corporate debt.

There are two ways that a company can obtain financing both medium and long term loans to finance their investments. One is through shares representing an aliquot of the capital and another through the issuance of corporate debt. The corporate debt titles offer to its holder an interest previously known and received regular quarterly, semiannual or annual basis according to the contractual agreement.

In this vein, according to a report given by the International Monetary Fund (IMF), China needs to control its corporate debt before the situation becomes unmanageable; some analysts wonder, May Bitcoin have the answer? Following this analysis, the report of the IMF indicates that the Asian giant debt amounts 25 billion dollars; this amount represents 254% of its GDP. The above cited is full of uncertainty to a market economy and entrepreneurs could turn their attention to the growing popularity of Bitcoin.

There is evidence that attracts attention in this regard, the United States has a similar percentage in foreign debt almost similar to China’s foreign debt; the difference is that China’s debt has grown enormously in the years 2007 to 2014, according to a report made by McKinsey this debt has quadrupled and now there is slowdown in growth of the Chinese economy. Analysts say these signs are negative for global economy.

Therefore; one of these signals is the devaluation of the Yuan which is depreciating. So what the Chinese government does it try to build economic wealth in the country by issuing paper money which represent additional funds going to the economy but the main problem the IMF point out, is not taken into account which is to stop the corporate debt.

Grabbing a bit of recent history, since the financial problems of China began the country’s economy has stagnated with low rates of exportation, this is a problem that is added to the Chinese economy. There is great skepticism in global finance about reversing this problem.

Therefore; the possibilities that bitcoin gain popularity are announced and added that the currency is not controlled by banks or governments, this would be a refuge for investors to keep their money capital will depreciate in the hands of government and could respond to a need for capital preservation. There are fears of inflation in the country; because in past it was a driving force for many and the bitcoin can be a safe haven, regardless of whether the Chinese government is cautious about the digital currency if we add to this that the Bitcoin has no relationship or link with the IMF, this could be a perfect opportunity for the country in the long term.

In summary, opportunities are built, data and information available to make a hermeneutical and then make the best decision are taken to protect the most precious asset which is the welfare and happiness of social being taken.

Reference: cryptocoinsnews

Disclaimer: This press release is for informational purposes only. Information does not constitute investment advice or an offer to invest. The views expressed in this article are those of the author and do not necessarily represent infocoin views and should not be attributed to Infocoin.

You may also like...