Business
IMF Warns That China’s Savings Rate is Shrinking Fast
The International Monetary Fund reported that China is suffering its first series of annual current account deficits in 25 years because its savings rate is shrinking fast.
The IMF’s mission since its 1945 founding has been to ensure the stability of the global monetary system of exchange rates and payments for its 189 member nations and their citizens to transact with each other. With $1 trillion in lending capability through its sister organization the World Bank, the IMF supports loans to small nations to fight poverty and stands ready to serve as the “lender of last resort” during international financial crises.
The People’s Republic of China (PRC) did not join the IMF until 1980, when Taiwan was ejected from the United Nations after losing the support of U.S. President Jimmy Carter. The PRC has been a small bank borrower, but it benefited enormously from the IMF’s support for China’s admittance to the World Trade Organization (WTO) in 2001.
China’s WTO boom saw capital spending rise from 34.9 percent of GDP in 1999 to 43.2 percent in 2008. China easily financed the boom because its domestic savings rate spiked from 36 percent of GDP in 1999 to 52.3 percent in 2008. Endo Economics calculated the investment boom was profitable, because every $1 of China bank lending generated about $.79 of increased GDP over the next twelve months.
With China’s growth model and infrastructure building the envy of the world, former member of the Chinese Communist Party (CCP) Justin Lin Yiju was appointed chief economist of the World Bank in 2008. With the Great Financial Crisis devastating developed nations, China in April 2010 was able to increase its IMF ownership to the third largest share at 6.4 percent, behind only Japan’s 6.5 percent and the United States’ 17.5 percent.
Over the next decade through 2018, China continued its export boom by increasing capital spending by another +1.6 percent. Combined with its domestic savings rate falling by -7.1 percent to 45.2 percent, China financed its second boom by increasing the risk-taking leverage of its banks….
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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