“Trade wars are easy to win,” says US President Donald Trump. US-UK trade historian Marc-William Palen disagrees. In this interview, Palen, author of The “Conspiracy” of Free Trade: The Anglo-American Struggle over Empire and Economic Globalisation, 1846-1896, and senior lecturer in history at the University of Exeter (UK), argues that US politicians’ pursuit of trade wars in the 19th and 20th centuries yielded mostly short-term political gains for themselves and high, long-term economic and strategic costs to their country.
For many years, China’s emerging companies, especially those in the internet sector, have relied on foreign capital. Alibaba and Tencent were nurtured by overseas venture capital, and were eventually listed abroad. These two companies have today become world-class giants. The market value of Alibaba was $495 billion as of late May, while Tencent’s valuation was $605 billion. This puts them among the world’s top 10 most valuable companies. The success of China’s leading tech companies is an understandable source of pride to many in China. But for China’s policymakers, a question presents itself: why do so many outstanding Chinese companies end up going public overseas?
China played a surprisingly prominent role in debates surrounding the UK’s 2016 referendum on leaving the EU. For leading “Leavers”, Brexit was a chance for Britain to free itself from a stifling Brussels bureaucracy and build stronger trade relations with upcoming powers like China. But those expecting a blossoming in China-UK relations after Brexit might be disappointed, says Leslie Young, Professor of Economics at CKGSB. Professor Young, who received a doctorate in mathematics from Oxford University in 1971, at the age of 20, and who is now a recognized authority in international economics, explains how Chinese business is likely to be affected by Brexit.
China has banned borderless cryptocurrencies like bitcoin, but it is a move the country may come to regret. Until recently, China was the world’s largest market for virtual currency and digital currencies trading and China’s ban on Bitcoin came abruptly. Some experts think Beijing’s intention is to regulate the market, not hobble it—but the crackdown may last for a while. The future for cryptocurrencies in China is unclear, because the Chinese government is also backing the underlying blockchain technology. Will cryptocurrencies come to light again?
As Donald Trump signed the memorandum proposing the introduction of tariffs on $50 billion of Chinese imports on March 22, 2018, the president of the United States quipped, “This is the first of many.” He didn’t go back on his words. No one seems to be a winner, but the trade war goes on and the entire world is paying close attention. Although both sides express willingness to have talks, can the trade war be stopped? What’s the future for US-China relations?
China’s financial sector used to be famous for its poor service and imperviousness to innovation. Even today, when customers go to make a transaction at one of the country’s big state-run banks, they often take a bag of snacks with them—they know they’re in for a long wait. But things are changing fast in the Middle Kingdom. A new generation of digital finance firms is taking the country—and the global markets—by storm in everything from digital payments and micro-lending to insurance and wealth management. How will China’s lumbering state-run banks react? Will tightening regulation nip this revolution in the bud?
Ioana Kraft began her career in international law, and moved to China 14 years ago. Since 2009, she has been the General Manager of the European Union Chamber of Commerce’s Shanghai chapter, working tirelessly to promote the interests of European businesses operating in eastern China. In this interview, she discusses the challenges and opportunities European businesses face in China.
As the Chinese economy shifts from exports and investment toward domestic consumption, the country is counting on the middle class to drive consumption levels higher. A good reason to be optimistic is that the growing middle class club, with more millennials, is getting more comfortable with borrowing. Yet it is also a worrying phenomenon because the amount of consumer debt keeps climbing. Meanwhile, the red-hot property market has always been a heavy burden on Chinese households and has been getting even heavier in recent years. Will China’s middle class be derailed? Should we worry about the finances of Chinese middle class?
Historians say that paper currency was invented by the Chinese during the Tang Dynasty. Today, their descendants are taking the lead again: Young Chinese are abandoning cash. Shop anywhere in China–from a grand shopping mall to a small street vendor–and you can use your smartphone to pay. Of course, the wide acceptance of smartphones and 4G internet is one thing, the rise of fintech firms like Ant Financial is another. Yet to seriously phase out cash, authorities and professionals are pursuing something more than just QR codes: digital currencies based on blockchain technology. Despite the cracking down on unfavorable operations like ICOs, China is studying blockchain in a rather serious way.
After meeting with Chinese President Xi Jinping this year, Donald Trump backtracked and dropped his accusation of China being a currency manipulator. But the issue of currency manipulation is still debatable. The RMB is certainly not a free-floating currency and the controls are complex. China’s central bank sets the daily rate with movements only allowed in a narrow 2% band. This did not change for years, until August 2015 when the central bank reformed a bit by beginning to set the daily RMB rates based on the closing value of the previous day’s interbank forex market. But it’s not considered a major change and the way to achieve a more open currency remains difficult.