According to Xinhua Finance, the 2022 Tsinghua PBCSF Chief Economist Forum was held online on May 14. It brought many top global economic and financial experts together to discuss the worldwide economy and order during the turbulent 2022.
Among them, Yu Yongding, researcher and doctoral supervisor of the Institute of World Economics and Politics as well as a member of the Chinese Academy of Social Sciences, proposed that China should adjust the structure of its overseas assets from 8 aspects.
First, expand fiscal and monetary policies to stimulate domestic demand to drive imports.
Second, cancel the remaining export tax rebate policy to encourage exports.
Third, increase imports of commodities and strategic goods.
Fourth, to buy fewer U.S. Treasuries, import more U.S. products, and fulfill the U.S.-China trade agreement as much as possible.
Fifth, maintain a trade deficit for a specific period.
The sixth is implementing a floating exchange rate policy and maintaining specific capital controls.
The next one is to increase forms of overseas investment. Converting the trade surplus into overseas investment is also a good way while clarifying the home base and direction of overseas investment.
Finally, leverage China’s strengths in infrastructure investment, but be wary of the debt trap.
At the end of March, Yu Yongding also wrote an article warning that China must hurry up, consider the safety of the country’s overseas assets, and make necessary corresponding adjustments.
He added that the safety of overseas assets deserves attention due to a net asset of about 2 trillion yuan (295 billion dollars) overseas, which is a huge amount.
He also said that China already needs to worry about its overseas asset, including foreign exchange reserves, even if there is no geopolitical conflict. Additionally, authorities should be more alert to U.S. sanctions imposed on Russia.
In an interview by Reuters, Yu stated that a wide-ranging economic war has already started, but the most lethal tactics have yet to be adopted.
He said that a complete decoupling of China and the U.S. is not impossible, and the ultimate U.S. sanctions may include the seizure of U.S. assets held by China.