Indonesia and China have different economic systems and contexts, so it may not be appropriate for Indonesia to simply copy China's monetary policy in order to fund its development. However, there may be some lessons that Indonesia can learn from China's experience.
One key lesson is the importance of developing a strong domestic financial system to support economic development. China's state-controlled banking system has played a key role in financing its economic growth over the past several decades, by providing loans to state-owned enterprises, local governments, and other entities for investment in infrastructure, industrial development, and other initiatives. Indonesia could consider strengthening its own banking system in order to better support economic development.
Another lesson from China's experience is the importance of implementing sound macroeconomic policies to manage inflation, stabilize the currency, and promote economic growth. China has implemented a range of monetary and fiscal policies over the years to achieve these goals, including adjusting interest rates, managing the exchange rate, and regulating the money supply. Indonesia could learn from China's experience in this regard and consider implementing policies that are appropriate for its own economic context.
Finally, Indonesia could also look to China's experience with opening up to international trade and investment as a means of promoting economic growth. China has been successful in attracting foreign investment and participating in global value chains, which has helped to fuel its economic growth over the past several decades. Indonesia could consider adopting policies that promote greater openness to foreign trade and investment in order to tap into global markets and attract investment.
Overall, while Indonesia may not be able to simply copy China's monetary policy, there may be some valuable lessons that it can learn from China's experience in developing its own economic policies to support growth and development.
Key economic indicators for China, Indonesia, and the United State
Here's a table comparing some key economic indicators for China, Indonesia, and the United States as of 2021, all converted to US dollars:
| Indicator | China | Indonesia | United States |
|---|---|---|---|
| Money Supply (M2) | $34.3 trillion | $1.2 trillion | $20.7 trillion |
| National Debt | $3.6 trillion | $329.4 billion | $28.4 trillion |
| Gross Domestic Product (GDP) | $16.3 trillion | $836.1 billion | $22.7 trillion |
Modern Monetary Theory (MMT)
Modern Monetary Theory (MMT) is a relatively new and controversial economic theory, and its application in practice is still being debated. However, some economists and policymakers argue that some countries have successfully implemented policies that align with the principles of MMT.
One example often cited is Japan, which has a large national debt but has been able to borrow at low interest rates and maintain economic stability. Some economists argue that Japan's monetary policy, which involves printing money to fund government spending, is an example of MMT in practice.
Another country that has been mentioned in the context of MMT is Australia. Some analysts argue that Australia's response to the COVID-19 pandemic, which involved significant government spending and economic stimulus, aligns with the principles of MMT.
However, it's important to note that MMT is a relatively new and controversial theory, and its application in practice is still being debated. While some economists and policymakers believe that MMT can be used to guide effective economic policy, others are critical of the theory and argue that it could lead to inflation or other negative economic outcomes.
There is no direct correlation between the Tiananmen Square protests in 1989 and the monetary policy of President Nixon in the early 1970s. However, there are some indirect connections between these two events and the broader economic policies of China and the United States.
In the early 1970s, President Nixon implemented a series of economic policies that included devaluing the US dollar, imposing wage and price controls, and ending the convertibility of the US dollar into gold. These policies had significant implications for the global economy, as they led to a decline in the value of the US dollar and an increase in inflation.
In the years that followed, China implemented its own economic reforms under the leadership of Deng Xiaoping. These reforms included opening up the Chinese economy to foreign investment, implementing market-oriented policies, and encouraging economic growth. However, the government also maintained strict political control and limited political freedoms.
The Tiananmen Square protests of 1989 were sparked by demands for greater political freedom and democratic reforms. While the protests were primarily driven by political factors, they also had economic implications, as they disrupted the Chinese economy and led to a decline in foreign investment.
In the years since the Tiananmen Square protests, China has continued to pursue economic growth and development, while maintaining strict political control. The US and China have also engaged in complex economic relations, including trade negotiations, currency exchange rate policies, and tensions over intellectual property rights. However, while there are certainly connections between the Tiananmen protests and broader economic and political developments in China and the US, there is no direct correlation between the protests and Nixon's monetary policy.
It is not accurate to say that the United States has asked China to become a democracy in exchange for monetary funding. While the US and China have had complex economic and political relations over the years, with the US providing some funding to China, these relationships are typically more nuanced and multifaceted than can be described by a simple exchange.
The United States has historically expressed support for democracy and human rights in China, and has at times criticized China for its lack of democratic institutions and restrictions on political freedoms. However, the US government has not made monetary funding conditional on China's adoption of democracy. China is a sovereign nation with its own political and economic policies, and decisions about these policies are made by the Chinese government.
While the US and China have had disagreements and tensions over various issues, including human rights and democracy, the relationship between the two countries is complex and multifaceted. Economic factors, geopolitical considerations, and other factors can all influence this relationship, and it is not accurate to describe it in simple terms of an exchange between democracy and monetary funding.
Comparison of the monetary policies of Deng Xiaoping and his successors in China:
Deng Xiaoping (1978-1992):
Implemented a series of economic reforms that opened up the Chinese economy to foreign investment and encouraged market-oriented policies.
Emphasized the importance of economic growth and development, with a focus on modernizing China's economy and infrastructure.
Introduced measures to control inflation and stabilize the economy, including a tightening of monetary policy and the introduction of new economic regulations.
Jiang Zemin (1993-2003):
Continued Deng's economic reforms, with a focus on expanding the private sector and promoting entrepreneurship.
Launched the "Go West" campaign to encourage development in western China.
Continued to tighten monetary policy and introduce new economic regulations, with a particular emphasis on financial sector reform.
Hu Jintao (2003-2013):
Focused on achieving balanced economic development and reducing regional disparities.
Introduced measures to address social and environmental issues, including healthcare and pollution.
Continued to promote economic growth and development, but also emphasized the need for more sustainable and equitable growth.
Xi Jinping (2013-present):
Has implemented a series of economic reforms, including efforts to reduce debt and promote more sustainable growth.
Has emphasized the need for greater innovation and technological development.
Has launched ambitious infrastructure projects, including the Belt and Road Initiative, to increase economic connectivity and promote development.
It's worth noting that the monetary policies of these leaders were influenced by a range of factors, including broader economic conditions and political considerations, and cannot be fully captured by a simple comparison.
Foreign debt in China has been accumulated by multiple leaders over time, and it is difficult to pinpoint a single leader who has been responsible for the most foreign debt in Chinese history. Here are a few key examples of Chinese leaders and their foreign debt policies:
Mao Zedong (1949-1976):
During Mao's rule, China did not rely heavily on foreign borrowing, in part due to the country's isolation from much of the international community.
However, China did receive some foreign aid from countries such as the Soviet Union and built up a significant amount of debt to the Soviet Union and other communist countries during this period.
Deng Xiaoping (1978-1992):
Under Deng's leadership, China began to open up to the global economy and started to accumulate foreign debt through borrowing from international lenders and issuing bonds.
However, Deng was also cautious about taking on too much debt and implemented measures to control inflation and stabilize the economy.
Jiang Zemin (1993-2003):
During Jiang's rule, China continued to accumulate foreign debt as the country's economy grew rapidly and the government invested in infrastructure projects and other development initiatives.
However, Jiang also implemented policies to control debt levels and stabilize the economy, including tighter monetary policy and increased regulation of the financial sector.
Hu Jintao (2003-2013):
During Hu's tenure, China's foreign debt continued to increase, as the government invested heavily in infrastructure projects and other development initiatives.
However, Hu also implemented policies to control debt levels and promote sustainable economic growth, including efforts to reduce dependence on exports and increase domestic consumption.
Xi Jinping (2013-present):
Under Xi's leadership, China has continued to accumulate foreign debt, in part due to investments in the Belt and Road Initiative and other infrastructure projects.
However, Xi has also implemented policies to reduce debt levels and promote more sustainable growth, including efforts to control financial risk and reduce excess capacity in certain sectors.
It's worth noting that while foreign debt can be a useful tool for financing development and growth, it also carries risks and can lead to economic instability if not managed carefully. Chinese leaders have implemented various policies and strategies over time to balance the benefits of foreign borrowing with the need for financial stability and sustainable growth.
China has been impacted by its investments in US banks
China has been impacted by its investments in US banks, particularly during the global financial crisis of 2008-2009. Prior to the crisis, China had invested heavily in US banks and other financial institutions, in part to diversify its foreign exchange reserves and seek higher returns on its investments. However, when the crisis hit, many of these investments suffered significant losses, causing China to reassess its investment strategies and priorities.
For example, China's investments in US mortgage-backed securities were hit hard by the subprime mortgage crisis, and the value of these assets plummeted. China also faced losses on its investments in US banks such as Morgan Stanley and Bank of America, which were struggling to weather the crisis. In response, China shifted its investment focus towards more stable, long-term investments such as infrastructure and natural resources.
Since the global financial crisis, China has continued to invest in US banks and other financial institutions, but at a more cautious and strategic level. The country has also increased its efforts to promote financial reform and stability in its own economy, in order to reduce its reliance on foreign investments and increase its resilience to external economic shocks.
It is difficult to say with certainty how China has been impacted by its investments in Silicon Valley Bank (SVB), as the specific details of these investments are not publicly available. However, it is possible that China has experienced both positive and negative effects from its investments in the bank, depending on various factors such as market conditions, regulatory changes, and company performance.
On the positive side, China's investments in SVB could potentially provide the country with access to new technologies and expertise in areas such as fintech and venture capital. This could help China to develop its own technology industry and enhance its competitiveness in the global market. Additionally, SVB's focus on supporting innovative startups and entrepreneurs could align with China's own goals of fostering innovation and entrepreneurship in its economy.
On the negative side, China's investments in SVB could also expose the country to financial risks and market volatility, particularly in the event of economic downturns or shifts in regulatory policies. Additionally, given the sensitive nature of technology and innovation in US-China relations, China's investments in US technology companies have been subject to scrutiny and potential political backlash in the past.
Overall, while China's investments in SVB and other US financial institutions could provide certain benefits and opportunities, they also carry potential risks and uncertainties. It remains to be seen how China's investments in SVB will ultimately impact the country's economy and technology sector.
Q: Does China has been impacted by investment in Silicon Valley Bank bankruptcy?
Yes, China has been impacted by the investment in Silicon Valley Bank's bankruptcy. The collapse of Silicon Valley Bank (SVB) has created a sense of panic within China's tech start-up and venture capital (VC) sector [21]. According to an article on CNBC, although the collapse of Silicon Valley Bank is not likely to have a major contagion effect in Asia, it could be seen as a warning, especially for economies that heavily rely on the US dollar [22]. In addition, the panic sparked by the collapse of Silicon Valley Bank is spreading to China, the world's second-largest venture capital market. Across social media platforms, investors and startups are expressing concerns [24].
Many Chinese Hong Kong-listed companies, including Noah Holdings, Broncus Medical, and CStone Pharmaceuticals, have sought to reassure investors by stating that their cash deposits in SVB are minimal [25]. Nevertheless, the collapse of Silicon Valley Bank has still created a sense of panic within China's tech start-up and venture capital sector.
Q: Does SVB Bankruptcy affects Shopee , Lazada, Grab , Gojek cash deposits?
There is no clear information in the provided search results about whether the bankruptcy of Silicon Valley Bank (SVB) affects the cash deposits of Shopee, Lazada, Grab, or Gojek. The articles mainly discuss the impact of SVB's collapse on China's tech start-up and venture capital sector [1], the potential contagion effect in Asia [2], the reasons for the bank's failure [3], and how it affects investors and startups [4].
Some articles mention that most account holders at SVB had balances that exceed $250,000 [3]. Other articles mention that some startups are converting their cash with Silicon Valley Bank into treasury bills, bonds, and money market funds due to concerns over the bank's financial stability [5]. However, there is no mention of the specific impact on the cash deposits of the companies mentioned in the query.
Several companies have been affected by the bankruptcy of Silicon Valley Bank (SVB).
Several companies have been affected by the bankruptcy of Silicon Valley Bank (SVB). Some of the companies affected by the fall of Silicon Valley Bank include:
- BlockFi, a crypto lender with roughly $227 million in unprotected funds at SVB [11][15]
- Rippling, an online payroll provider that struggled to provide services to its customers [12]
- Stitch Fix, an online styling service that anticipates that its $40 million credit line with SVB will not be available due to the bank's collapse [13]
- Roblox, a video game company that said in a filing that 5% of its $3 billion in cash was held at SVB but added that the collapse will not affect its day-to-day operations [15]
It's unclear which company is the most affected as the impact of SVB's bankruptcy may vary for each company.
References :
[1] "The California Department of Financial Protection and Innovation shut down Silicon Valley Bank on Friday, less than two days after the bank tried to persuade clients not to pull their money over..."
URL: https://www.nytimes.com/2023/03/10/business/svb-silicon-valley-bank-explainer.html
[2] "March 9 (Reuters) - SVB Financial Group (SIVB.O) scrambled on Thursday to reassure its venture capital clients their money was safe after a capital raise led to its stock collapsing 60% and..."
URL: https://www.reuters.com/business/finance/silicon-valley-bank-sell-stock-cope-with-cash-burn-2023-03-09/
[3] "The majority of account holders at SVB, which on Friday was shut down by regulators and taken over by the FDIC, had balances that exceed $250,000, Gary Zimmerman, chief executive of..."
URL: https://www.thestreet.com/banking/svb-collapse-roku-had-487-million-in-cash-at-failed-bank-rocket-lab-roblox-also-affected
[4] "SVB was seized by bank regulators after swift downfall Bankrupt crypto lender BlockFi has about $227 million in an account maintained by failed lender Silicon Valley Bank, the Justice Department said in a court filing."
URL: https://news.bloomberglaw.com/bankruptcy-law/bankrupt-crypto-lender-blockfi-has-227-million-at-svb
[5] "SVB offers cash sweep product to move money into funds Some VCs advising portfolios to park deposits in treasuries Some startups are converting their cash with Silicon Valley Bank into treasury bills, bonds and money market funds amid concerns over the financial stability of the firm."
URL: https://news.bloomberglaw.com/bankruptcy-law/some-startups-are-parking-their-svb-cash-in-treasuries-for-now
11] "BLOCKFI. Bankrupt crypto lender BlockFi Inc has roughly $227 million in unprotected funds at SVB, the Wall Street Journal reported on Friday. PAYONEER GLOBAL INC (PAYO.O) The global payments ..."
URL: https://www.reuters.com/business/finance/global-firms-with-exposure-collapsed-svb-2023-03-13/
[12] "SVB customer Rippling, an online payroll provider ranked one of the top companies of 2022 by Y Combinator, and the top fastest growing startup by the SF Business Times, struggled to provide..."
URL: https://www.cbsnews.com/news/bank-collapse-silicon-valley-bank-customers-roblox/
[13] "The online styling service firm says it anticipates that its $40 million credit line with SVB will not be available due to the banks collapse. The line of credit was part of Stitch Fixs ..."
URL: https://money.usnews.com/investing/news/articles/2023-03-13/factbox-global-firms-with-exposure-to-collapsed-svb
[14] "Here are some of the companies affected by the fall of Silicon Valley Bank, which was known for serving start-ups, tech companies and venture capitalists. Silicon Valley Bank, lender to some..."
URL: https://www.washingtonpost.com/business/2023/03/11/silicon-valley-bank-companies-affected/
[15] "Roblox also said in a filing that 5% of its $3 billion in cash was held at SVB. The video game company said the collapse will not affect its day-to-day operations. Crytpo lender BlockFi,..."
URL: https://www.cnn.com/2023/03/10/business/roku-svb-cash/index.html
[21] "March 12, 2023, 5:30 AM · 4 min read The collapse of Silicon Valley Bank (SVB) has created a sense of panic within Chinas tech start-up and venture capital (VC) sector, as the lender..."
URL: https://news.yahoo.com/collapse-silicon-valley-bank-rocks-093000218.html
[22] "Analysts say the collapse of Silicon Valley Bank is not likely to have a major contagion effect in Asia, but one person says it could be seen as a warning — especially for economies that ..."
URL: https://www.cnbc.com/2023/03/13/silicon-valley-bank-asia.html
[23] "Established in 1983, Silicon Valley Bank was, just before collapsing, Americas 16th largest commercial bank. It provided banking services to nearly half of all US venture-backed technology..."
URL: https://www.cnn.com/2023/03/13/investing/silicon-valley-bank-collapse-explained/index.html
[24] "The panic sparked by the collapse of Silicon Valley Bank is spreading to China, the worlds second-largest venture capital market. Across social media platforms, investors and startups are..."
URL: https://techcrunch.com/2023/03/12/fintech-interchange-svb-implosion-impact/
[25] "Mar 13, 2023, 11:40am Pandaily. The recent shutdown of Silicon Valley Bank (SVB) by regulators marks the largest bank failure in the United States since 2008. Many Chinese Hong Kong-listed companies, including Noah Holdings, Broncus Medical, and CStone Pharmaceuticals, have sought to reassure investors by stating that their cash deposits in SVB ..."
URL: https://pandaily.com/chinese-based-firms-confirm-minimal-exposure-to-silicon-valley-bank/