IL21: How China Manages Their FX Reserves ft. Zongyuan Zoe Liu
Top Traders Unplugged
Niels Kaastrup-Larsen
4.8 • 670 Ratings
🗓️ 20 September 2023
⏱️ 59 minutes
🧾️ Download transcript
Summary
In this episode we lift the veil on China’s often secretive system for managing its multi-trillion dollar holdings of foreign assets. Guiding us through the discussion is Dr. Zhongyuan Zoe Liu, the Maurice R. Greenberg fellow for China studies at the Council on Foreign Relations. Dr. Liu spent years researching financial reports and conducting in-person interviews with those involved in running China’s multiple “Sovereign Leveraged Funds”. We discuss how they evolved, what purposes they serve for the Communist party and why other countries may soon follow China’s lead. The interview is based on Dr. Liu’s new book: How The Communist Party of China Finances Its Global Ambitions.
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Episode TimeStamps:
00:00 - Intro
03:52 - Sebastien’s journey into the investment management industry
07:45 - How Sebastien’s book came about
19:43 - Investing in a rising interest rate environment
24:06 - Responding to unexpected regime shifts in the markets
33:24...
Transcript
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| 0:00.0 | At that time, the deputy governor of the PBOC, it was Yigang, who then later become the central banker. |
| 0:14.0 | So Yigang, he endorsed this plan the next day after President Xi Jinping's announcement. |
| 0:20.0 | He literally said this is quite necessary and timely |
| 0:24.8 | to expand the circular fund capital. |
| 0:27.1 | So, you know, I just feel like, you know, |
| 0:28.6 | you are absolutely right. |
| 0:29.8 | Despite the first time when China leveraged |
| 0:32.9 | this foreign exchange reserve was to capitalize central |
| 0:36.5 | Huitjin, to solve a crisis, and now even the central bankers |
| 0:39.8 | themselves are more aligned with President Xi Jinping |
| 0:42.3 | under the strategic aspect of it. |
| 0:46.0 | Imagine spending an hour with the world's greatest traders. |
| 0:49.9 | Imagine learning from their experiences, their successes, |
| 0:52.6 | their successes, and their failures. |
| 0:56.0 | Imagine no more. Welcome to Top Traders Unplugged, the place where you can learn from the best hedge fund managers in the world, |
| 1:02.0 | so you can take your manager due diligence or investment career to the next level. |
| 1:07.0 | Before we begin today's conversation, remember to keep two things in mind. |
| 1:14.4 | All the discussion we'll have about investment performance is about the past, |
| 1:19.3 | and past performance does not guarantee or even infer anything about future performance. |
| 1:24.0 | Also understand that there's a significant risk of financial loss with all investment strategies, |
| 1:28.2 | and you need to request and understand the specific risks from the investment manager about their product before you make investment decisions. |
| 1:31.8 | Here's your host, veteran hedge fund manager, Niels Kostrup Larson. |
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