Article: Currency control is not black and white

Article - Media, Publications

Currency control is not black and white

SCMP Editorial, 18 April 2021

There are myriad ways for a government to affect the direction and value of its national currency. Some are labelled currency manipulation; others not. It depends on one’s definitions. Those of the United States Treasury mean the country cannot engage in such manipulation, an alleged sin only other economies can commit. Therefore it sits in judgment of others and threatens sanctions against those who allegedly game the global “rules-based” trade system.

However, spending trillions of US dollars on bond buying – also known as quantitative easing – for more than a decade and on economic relief packages to support growth and encourage inflation have achieved the same or similar results as manipulation. They have already caused significant depreciation of the US dollar against most major currencies and the slide is expected to continue. It is doubly ironic that in the middle of a trade and ideological war between the world’s two superpowers, Washington has, in its wisdom, declined to label mainland China as a currency manipulator but added friendly Taiwan to the watch list. The political nature of the exercise was exposed when the US Treasury, under former president Donald Trump, designated China as a manipulator in mid-2019, despite not meeting its full criteria, and then abruptly lifted the label five months later as a concession in a trade deal. Continue reading “Article: Currency control is not black and white”

Article: US Treasury says no major trading partner manipulates currency

Article - Media, Publications

US Treasury says no major trading partner manipulates currency

Xinhua, 17 April 2021

WASHINGTON — The US Treasury Department on Friday said that no major trading partner of the United States meets the criteria as a currency manipulator, but Vietnam, Switzerland and China’s Taiwan will be under enhanced monitoring for their currency practices.

In its semiannual Report on Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States, the Treasury Department concluded that Vietnam, Switzerland and Taiwan met all three criteria for enhanced currency analysis under the Trade Facilitation and Trade Enforcement Act of 2015 during the four quarters through December 2020. Continue reading “Article: US Treasury says no major trading partner manipulates currency”

Article: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

Article - Media, Publications

Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion

TYLER DURDEN, 16 April 2021

In 2018, the Chinese launched a gold-backed, yuan-denominated oil futures contract. These contracts were priced in yuan, but convertible to gold, raising the prospect that “the rise of the petroyuan could be the death blow for the dollar.”

Two weeks ago, The IMF reported that the global share of US-dollar-denominated exchange reserves dropped to 59.0% in the fourth quarter, according to the IMF’s COFER data released today. This matched the 25-year low of 1995. Continue reading “Article: Is China Preparing A Gold-Backed Yuan: Beijing Greenlights Purchases Of Billions In Bullion”

Article: Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age

Article - Media, Publications

Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age

Bloomberg, 14 April 2021

(Bloomberg) — The full implications of Beijing’s rapid-fire moves against Jack Ma’s internet empire in recent days won’t be apparent for weeks, but one lesson is already clear: The glory days for China’s technology giants are over.

The country’s government imprinted its authority indelibly on the country’s technology industry in the span of a few days. In landmark announcements, it slapped a record $2.8 billion fine on Alibaba Group Holding Ltd. for abusing its market dominance, then ordered an overhaul of Ant Group Co. On Tuesday, regulators summoned 34 of the country’s largest companies from Tencent Holdings Ltd. to TikTok owner ByteDance Ltd., warning them “the red line of laws cannot be touched.” Continue reading “Article: Jack Ma’s Double-Whammy Marks End of China Tech’s Golden Age”

Article: Alibaba shares jump after record $2.8bn anti-monopoly fine

Article - Media, Publications

Alibaba shares jump after record $2.8bn anti-monopoly fine

Mark Sweney, 12 April 2021

Shares in Alibaba surged on Monday after the e-commerce company said that a record $2.8bn (£2bn) fine handed down by Chinese regulators marked the end of an investigation into anti-competitive practices at the company.

Top executives at the company, founded by the billionaire Jack Ma, told investors that while Chinese regulators continued a wider investigation into the sprawling conglomerates in the country’s tech industry, they believed the multibillion dollar fine announced at the weekend marked the end of the focus on Alibaba. The company is listed in Hong Kong and its shares climbed as much as 9% on the management’s comments. Continue reading “Article: Alibaba shares jump after record $2.8bn anti-monopoly fine”

Article: The Illegal Wildlife Trade and the Banking Sector in China

Article - Media, Publications

The Illegal Wildlife Trade and the Banking Sector in China

TRAFFIC, 12 April 2021

Cambridge, UK – 14 April 2021: Chinese banks must take action to prevent illegal wildlife traffickers from exploiting their networks to launder money says TRAFFIC. The non-governmental organisation, which works globally on trade in wild animals and plants in the context of both biodiversity conservation and sustainable development, is today releasing resources that indicate how Chinese banks are at risk of greater scrutiny and pressure from governments and institutional investors if they fail to act on the illegal trade of wildlife. Continue reading “Article: The Illegal Wildlife Trade and the Banking Sector in China”

Article: US cautions China-backed Port City could turn into money-laundering haven

Article - Media, Publications

US cautions China-backed Port City could turn into money-laundering haven

The Island Online, 12 April 2021

(ANI) US Ambassador to Sri Lanka and Maldives, Alaina Teplitz on Saturday warned Sri Lanka of unintended consequences of ‘nefarious actors’ who may try to misuse a China-backed Colombo Port City’s easy business rules as a permissive money laundering haven amid concerns of tax leaks.

Sri Lanka has unveiled draft legislation for a Colombo Port City Commission which allows for sweeping tax breaks, tax-free salaries and to be an offshore financial centre. Continue reading “Article: US cautions China-backed Port City could turn into money-laundering haven”

Article: Yellen Plans to Spare China From Currency Manipulator Label

Article - Media, Publications

Yellen Plans to Spare China From Currency Manipulator Label

Saleha Mohsin, 12 April 2021

Treasury Secretary Janet Yellen will decline to name China as a currency manipulator in her first semiannual foreign-exchange report, according to people familiar with the matter, a move that allows the U.S. to sidestep a fresh clash with Beijing.

The report, which is not yet finalized, is due on Thursday, although it is unclear when the department will release it. During the Trump era, the Treasury Department was accused of politicizing the report after it abruptly designated China a manipulator in mid-2019 outside its usual release schedule, only to lift the label five months later to win concessions in a trade deal. Continue reading “Article: Yellen Plans to Spare China From Currency Manipulator Label”

Article: Being ‘tough on China’ can’t mean harming our own interests

Article - Media, Publications

Being ‘tough on China’ can’t mean harming our own interests

DANIEL L DAVIS, 11 April 2021

Being “tough on China” is politically popular in Washington these days, and Biden has come out of the gate swinging against Beijing. But “being tough” isn’t a policy and reflexively applying it to China doesn’t serve U.S. interests. A logical and realistic approach to Beijing, however, can.

Obama’s “pivot to Asia” in 2011 opened a new chapter in Sino-American relations and turned an always challenging relationship even more tense. From the beginning of his administration, Trump characterized China in starkly adversarial terms, calculating domestic political advantage in starting a trade war. In the early months of the Biden term, it appears the new president has chosen to accelerate this deterioration in relations. Continue reading “Article: Being ‘tough on China’ can’t mean harming our own interests”

Article: China Hits Alibaba With Huge $2.78 Billion Fine For Market Abuse: Report

Article - Media, Publications

China Hits Alibaba With Huge $2.78 Billion Fine For Market Abuse: Report

Agence France-Presse, 10 April 2021

Shanghai, China: Chinese regulators have hit e-commerce giant Alibaba with a massive 18.2 billion yuan ($2.78 billion) fine over practices deemed to be an abuse of the company’s dominant market position, state-run media reported on Saturday.

Xinhua news agency said the State Administration for Market Regulation had assessed the fine after concluding an investigation into Alibaba that began in December. Continue reading “Article: China Hits Alibaba With Huge $2.78 Billion Fine For Market Abuse: Report”

Article: U.S. Spy Agencies Warn of Threats From Digital Currency to AI

Article - Media, Publications

U.S. Spy Agencies Warn of Threats From Digital Currency to AI

Joen Coronel, 10 April 2021

The U.S. intelligence community predicts an increasingly leaderless and unstable world in the coming decades as trends such as artificial intelligence, digital currencies and climate change reshape the global arena, according to the National Intelligence Council.

The coming decades will be characterized by a mismatch between global challenges and “the ability of institutions and system to respond,” according to “Global Trends 2040: A More Contested World.” The result will be “greater contestation at every level” — especially between the U.S. and China. Continue reading “Article: U.S. Spy Agencies Warn of Threats From Digital Currency to AI”

Article: Can the US compete?

Article - Media, Publications

Can the US compete?

Rod Kapunan, 10 April 2021

Many are speculating whether the US has the budget to sustain the cost for the long-delayed rehabilitation of America’s infrastructure. It was announced it will cost the Biden administration a whopping $2 trillion to undertake the repairs of the country’s mostly aging infrastructure.

As observed, the US economy is saddled with great contradictions. It is deeply mired in debt that it cannot just do all things at the same time. Some say the problem is for the US economy to undergo some kind of economic metamorphoses, similar to what China did to overcome the obstacle inherent in the US system.

One must remember that the greatest enemy of the US is the contradiction from within its own system. The US is hampered in what Marx says “internal contradictions” – that the interest of the various pressure groups could stymie most of its objectives. Continue reading “Article: Can the US compete?”

Article: Financial Tyranny: Footing The Tax Bill For The Government’s Fiscal Insanity

Article - Media, Publications

Financial Tyranny: Footing The Tax Bill For The Government’s Fiscal Insanity

TYLER DURDEN, 09 April 2021

“We are now speeding down the road of wasteful spending and debt, and unless we can escape we will be smashed in inflation.”- Herbert Hoover

We’re not living the American dream. We’re living a financial nightmare.. Continue reading “Article: Financial Tyranny: Footing The Tax Bill For The Government’s Fiscal Insanity”

Article: Hong Kong stock exchange to extend circuit breakers to futures products to temper wild gyrations in equities and derivatives

Article - Media, Publications
HKEX incoming CEO Nicolas Aguzin

Hong Kong stock exchange to extend circuit breakers to futures products to temper wild gyrations in equities and derivatives

Yahoo Finance, 09 April 2021

The move will add to similar controls put in place since August 2016, first on extreme gyrations in equities and a year later on derivative products. They followed a series of events that provoked regulatory probes into market misconduct such as price manipulation and pump-and-dump scandals.

“The volatility control mechanism (VCM) has worked as intended without any negative feedback from the market,” said Tom Chan Pak-lam, chairman of Hong Kong Institute of Securities Dealers, the local brokerage industry body. “In many cases, sharp and sudden price movements were smoothed out as the cooling-off periods allowed participants to react while trading continued.”

Read Full Article

Article: Bitcoin Shows Us That Not All Volatilities Are Created Equal

Article - Media, Publications

Bitcoin Shows Us That Not All Volatilities Are Created Equal

Enrique Dans, 09 April 2021

For many people, the main obstacle to using cryptocurrencies is that they are volatile; their value fluctuates sharply across time depending on, apparently, many different factors. To put the issue in context, the original paper on bitcoin was published in late 2008 and the first transaction in early 2009: since then, its value in dollars or euros has risen by more than 15,000%.

In contrast, over the same period of time, the parity between the dollar and the euro, has varied by a few percentage points up or down. No surprise therefore that bitcoin is seen as highly volatile and unsuitable for transactions, and at best, a store of value, subject to the systemic risk that arises every time the authorities or a government make decisions that could affect it. China talks of banning bitcoin mining and its price falls. Elon Musk uses part of Tesla’s reserves to buy bitcoin? Bitcoin rises.

Read Full Article