China is a major manufacturing partner and it is Wilbur Ross's job to identify and discuss weaknesses in that setup. What do you expect him to do, quietly put his head in the sand?
Repo gives liquidity to banks, which may prevent them from selling other assets in order to maintain operations and meet any balance sheet requirements they may have. It doesn't automatically support equities. China's government may also buy equities when markets open, but that would be kind of foolish because they could simply wait and buy lower, where they probably would have more price impact.
China has historically had major issues with liquidity and balance sheet. Look up the 2013 Liquidity Crisis and you'll see what I mean. Not to mention that many banks participate in risky practices like meeting balance sheet requirements only on disclosure deadlines and dealing in loans secured with ghost collateral.
Yes, this not about equities. I've been through a couple market disruptions on the corporate side. Our revenue is from retail, our expenses are to other businesses. During a natural disaster, people are preoccupied in paying the bills and are late paying. Meanwhile, my corp had contractual obligations to other businesses to pay on specific dates. With less revenue and same expenses, we borrow from the banks. If all corps are going through the same natural disaster, we're all borrowing from the banks. Those banks run out of cash and borrow it from the gov't.
Repo gives liquidity to banks, which may prevent them from selling other assets in order to maintain operations and meet any balance sheet requirements they may have. It doesn't automatically support equities. China's government may also buy equities when markets open, but that would be kind of foolish because they could simply wait and buy lower, where they probably would have more price impact.
China has historically had major issues with liquidity and balance sheet. Look up the 2013 Liquidity Crisis and you'll see what I mean. Not to mention that many banks participate in risky practices like meeting balance sheet requirements only on disclosure deadlines and dealing in loans secured with ghost collateral.