Part 6/14:
To fund its mounting deficits, China is increasingly relying on money printing—a risky strategy that raises questions about the country's currency stability. The central bank, the People's Bank of China, has engaged in a process called outright reverse repos, purchasing vast amounts of government bonds with newly printed money. From late 2024 onward, the scale of these operations has surged, with holdings increasing from 500 billion yuan to over 6.3 trillion yuan in just 12 months. If this pace continues, estimates suggest the figure could surpass 10 trillion yuan by year's end, threatening the credibility of China's financial system and currency.