Quote:
Originally Posted by NakedWomenTime
Apparently there are some quite big risks in the safety of Chinese bank deposits at the moment
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I would say its a small part of it as all the major banks are mostly state owned and China still has a massive FX surplus (over $3 Trillion USD). So although there is a bit of a credit meltdown happening in China right now, it is unlikely that the major banks (BOC, ICBC, CCBC, ABC, etc) face insolvency and if they do, the sovereign is in a good position to fix the problem.
The main reasons I can see are as follows:
(1) China's economy is slowing down and interest rates are being cut which means less yield on cash deposits in banks.
(2) China recently devalued their currency, the Yuan (RMB) against the USD and there is an expectation that it's going to happen again causing people to seek to buy assets outside cash including Domain Names.
(3) There have been cash outflows leaving China which has led to the government introducing capital controls on the flow of money outside China. Domain Names are an easy way to park cash that is quite portable.
(4) China's stockmarket has been extremely volatile, commodities are going down whilst at the same time real estate has also seen a slowdown until very recently. Some money from these asset classes is probably finding its way into Domain Names.
(5) There is a global tech boom that is still going on and IPO's are still the buzz around the world especially in countries like the USA, India and China.
(6) Chinese interest in Domain Names has been gathering pace over the last 5 years or so and so it seems to be accelerating partly due the foregoing.