Business
People’s Bank of China Cuts Foreign Exchange Assets by a Third
The People’s Bank of China high-quality foreign exchange assets peaked in June 2014 and has fallen by a third as the bank sold high quality and bought lower quality assets.
People’s Bank of China (PBoC) balance sheet was tiny in 1980 with just $2.3 billion, or 40 percent of assets, in high-quality foreign exchange treasury debt. The other 60 percent was in low-quality “other assets,” typically non-performing domestic bank debt.
By June 2014, the PBOC had one of the best capitalized balance sheets on the planet with $3.993 trillion, or 84 percent of assets, in high quality foreign treasury debt.
But since mid-2014 the PBoC’s high quality foreign exchange holdings have plunged by almost $900 billion to $3.119 trillion, or 57 percentage assets. By June 2019, the low-quality “other assets” had increased by almost $250 billion, including $100 billion last month to nationalize the insolvent Baoshang Bank, the first state bailout since 1998.
PBoC assumed it would ease liquidity for the Interbank lending market by injecting $43.4 billion in direct credit guarantees to support small and rural Chinese banks on June 15.
Reuters reported that the PBoC tried to avoid being forced to flood even more liquidity into low-rated “other assets” when Li Chao, vice chairman of China Securities Regulatory Commission, met with seven of China’s top non-bank institutions on June 16 and directed them to continue making overnight Interbank loans to small rural banks.
But The Epoch Times reported that despite the efforts of the PBoC, Interbank borrowing overnight interest rate spiked from 1.84 percent to 13.44 percent on June 20, higher than the 8.22 percent in 2011 at the height of the Global Financial Crisis.
China’s financial crisis seemed to stabilize at the end of June, after the PBoC “urged” China’s largest state-owned banks to continue funding China’s top stock brokers through Interbank loans and security lending “repos.”
Meng Wei, a spokeswoman for the National Development and Reform Commission, stated that even though China was “facing a…
Business
Democrat Claims Musk is Undermining Spending Bill Due to China Restrictions – The Hill
A Democrat claims Elon Musk influenced the reduction of a spending bill due to its restrictions on China, suggesting his actions impacted the legislation’s progress and funding allocation.
Allegations Against Musk
A prominent Democrat has accused Elon Musk of deliberately sabotaging a significant spending bill in response to China-related restrictions. This accusation comes amid ongoing tensions between the U.S. and China, particularly regarding technology and trade policies. The claims suggest that Musk’s influence is affecting critical legislative processes, raising concerns among lawmakers about foreign influence in American politics.
Implications for Legislation
The potential ramifications of Musk’s alleged actions could be significant. As a major player in the tech industry, his decisions can sway public opinion and impact the economy. Lawmakers fear that if influential figures like Musk oppose necessary legislation, it might hinder efforts to address vital issues such as national security and economic stability.
Political Reactions
The controversy has sparked debates among both Democrats and Republicans, highlighting the intersection of technology and politics. Many are demanding greater transparency and accountability from tech giants. As the situation unfolds, lawmakers may need to reassess their strategies to ensure that essential legislation moves forward uninterrupted.
Source : Democrat accuses Musk of tanking spending bill over China restrictions – The Hill
Business
HSBC Chairman to Head Key UK Business Delegation to China
HSBC Chairman Mark Tucker will lead a UK business delegation to China next month to boost trade and investment, amid concerns over national security and improving UK-China relations.
HSBC Chairman Leads UK Delegation to China
HSBC Chairman Mark Tucker will lead a pivotal British business delegation to China next month, marking the first significant visit since 2018. The trip aims to enhance Chinese investment in the UK, guided by Chancellor Rachel Reeves. Tucker, a seasoned financier with extensive Asia experience, is regarded as essential in resetting UK-China relations.
Reviving Economic Dialogue
Tucker will accompany senior bankers in seeking to rejuvenate trade, specifically focusing on financial services. Although there are apprehensions among some UK lawmakers regarding national security threats posed by closer ties to Beijing, the UK Treasury spokesperson confirmed Chancellor Reeves’ upcoming discussions on economic cooperation in Beijing.
A Shift in UK-China Relations
Since suspending most dialogues following China’s imposition of a national security law in Hong Kong, UK-China relations have soured. Nevertheless, the Labour government is prioritizing improved ties with China, emphasizing investment opportunities. Reeves asserts the necessity of a pragmatic approach to benefitting national interests amid ongoing concerns voiced by some lawmakers about security risks.
Source : HSBC Chairman to lead pivotal UK business delegation to China
Business
Gordonstoun Severs Connections with Business Led by Individual Accused of Espionage for China
Gordonstoun school severed ties with Hampton Group over espionage allegations against chairman Yang Tengbo. He denies involvement and claims to be a victim of political tensions between the UK and China.
Allegations Lead to School’s Decision
Gordonstoun School in Moray has cut ties with Hampton Group International after serious allegations surfaced regarding its chairman, Yang Tengbo, who is accused of being a spy for the Chinese government. Known by the alias "H6," Mr. Tengbo was involved in a deal that aimed to establish five new schools in China affiliated with Gordonstoun. However, the recent allegations compelled the school to terminate their agreement.
Public Denial and Legal Action
In response to the spying claims, Mr. Tengbo publicly revealed his identity, asserting that he has committed no wrongdoing. A close associate of Prince Andrew and a former Gordonstoun student himself, Mr. Tengbo has strenuously denied the accusations, stating that he is a target of the escalating tensions between the UK and China. He has claimed that his mistreatment is politically motivated.
Immigration Challenges and Legal Responses
Yang Tengbo, also known as Chris Yang, has faced additional challenges regarding his immigration status in the UK. After losing an appeal against a ban enacted last year, he reiterated his innocence, condemning media speculation while emphasizing his commitment to clear his name. Gordonstoun, on its part, stated its inability to divulge further details due to legal constraints.
Source : Gordonstoun cuts ties with business chaired by man accused of spying for China
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