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China must balance policies, after Fed’s interest rate hike

A cashier counts renminbi notes at a bank in Nantong, Jiangsu province. (Photo: Sipa)

Following the Federal Reserve’s interest rate hike and the monetary policy shift of Western countries, China should hold a cautious approach and base its monetary policy on its concrete economic conditions and development trend.

China and the United States’ economic cycles are not synchronized. The US has robust investment and consumption and inflation remains high while China urgently needs to boost investment and consumption and relieve its employment pressure.

The two countries naturally have different monetary policy focus and policy tools. While the Fed raises interest rates to control inflation, China needs to maintain enough liquidity to keep its economic pace and support enterprises during the pandemic. However, as China and the US are trade and investment partners, the Fed’s rate hike will reduce the US’ import demand, adversely affecting China’s exports, hitting its market confidence and accelerating its capital outflow. This will undermine China’s effort to increase investment and solve the employment problem.

However, the Fed’s rate hikes and the appreciation of the US dollar will also increase the relative price advantage of China’s export commodities. Whenever the Fed has raised interest rates, economically fragile countries have been hit by monetary, financial and even economic crises. International capital flowing out of these emerging markets may choose to flow into China, given its sound economic fundamentals and high national credit.

Therefore, China should maintain its sound monetary policy and increase its support for the real economy. Any of its monetary policies should focus on promoting economic growth and full employment.

It should seize the opportunity of narrowing interest rates with the US to expand international loans of the renminbi and further play the renminbi’s role as a financing currency, promote the further opening-up of its financial market to guide market expectations and make economic growth more stable and sustainable.

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A New Grand Blueprint of Chinese Modernization

Article by H. E. Yan Xiusheng, Ambassador of the People’s Republic of China to Barbados

The Third Plenary Session of the 20th Central Committee of the Communist Party of China, convened in Beijing from July 15 to 18, 2024, is an important meeting that attracted worldwide attention with historic significance. The Plenary Session adopted the Resolution of the Central Committee of the CPC on Further Deepening Reform Comprehensively to Advance Chinese Modernization, which made systematic planning and arrangements for further comprehensively deepening reform and drew a new grand blueprint of Chinese modernization.

Looking back on the development journey of China, our country has made significant strides in keeping up with the times through reform and opening-up. Since the 18th National Congress of the Communist Party of China, China has successfully achieved the first centenary goal by relying on reform and opening-up, which remain essential now for creating a new landscape for Chinese Modernization and strive towards the second centenary goal.

The Plenary Session presented to the world that China’s overall objectives of further deepening reform comprehensively are to continue improving and developing the system of socialism with Chinese characteristics and modernize China’s system and capacity for governance. By 2035, China will have finished building a high-standard socialist market economy in all respects, further improved the system of socialism with Chinese characteristics, generally modernized its system and capacity for governance, and basically realized socialist modernization. All of this will lay a solid foundation for building China into a great modern socialist country in all respects by the middle of this century.

The Plenary Session presented to the world the key points of China’s advancement of reform. China will focus on building a high-standard socialist market economy, advancing whole-process people’s democracy, developing a strong socialist culture in China, raising the people’s quality of life, building a Beautiful China, advancing the Peaceful China Initiative to a higher level, and improving the Party’s capacity for leadership and long-term governance. More than 300 important reform tasks laid out in the resolution shall be completed by the time the People’s Republic of China celebrates its 80th anniversary in 2029.

The Plenary Session clearly sent a definite signal to the world about China’s commitment to expanding high-level opening-up. The plenary session made specific arrangements for promoting high-level opening-up, including expanding institutional opening-up, reforming the foreign trade system, managing foreign investment and outbound investment, optimizing the regional opening-up layout, and improving mechanisms for promoting high-quality Belt and Road cooperation. China will orderly expand the opening-up of commodity markets, service markets, capital markets, and labor markets, optimize the business environment, and make the vast Chinese market a great opportunity for the world.

The Plenary Session further clarified to the world that Chinese modernization is a path of peaceful development. The plenary session emphasized that China will firmly pursue an independent and peaceful foreign policy, promote the building of a community with a shared future for mankind, uphold the common values of humanity, implement the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative, advocate for a multipolar world of equality and order, inclusive and beneficial economic globalization, participate in and lead the reform and construction of the global governance system, and resolutely safeguard national sovereignty, security, and development interests.

Chinese modernization has been continuously advanced through reform and opening up, and it will surely open up broad prospects through this approach. A prosperous and open China is an important engine for global development and prosperity, bringing more development opportunities to countries around the world, including Barbados. We look forward to China and Barbados continuing to be fellow travelers on the road to reform and good partners on the path to development, conscientiously implementing the important consensus reached by the leaders of our countries during Prime Minister Mia Amor Mottley’s visit to China. We aim to continuously enhance political mutual trust, promote high-quality Belt and Road cooperation, and jointly implement the GDI, GSI and GCI, and build a higher level of China-Barbados relations which will benefit the people of our two countries, leading to a closer China-Barbados community with a shared future.

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VP HARRIS ON TIK TOK

Vice President Kamala Harris is now the proud owner of a TikTok account.

The presumptive Democratic nominee for president joined the app on Thursday, where Harris-themed memes about coconut trees and “Brat summer” have been viral for weeks. Within hours, her account amassed 1.3 million followers. “I heard that recently I’ve been on the For You page, so I thought I’d get on here myself,” Harris says in her first post, which has 1.9 million likes, more than 71,000 comments and upwards of 69,000 bookmarks.

Adoring content about Harris has dominated the platform since Sunday, when President Biden announced he would no longer be running for re-election and endorsed his vice president for the Democratic nomination. 

Harris’ decision to join in on the fun reflects the importance Democrats place on reaching young voters: most TikTok users in the U.S. are under 30. While the vast majority of TikTok’s 170 million American users say they’re on the platform to be entertained, more than one third use the app to keep up with politics, according to Pew Research, a larger share than those on Facebook or Instagram.

The Biden White House has heavily courted social media influences to advocate for the president’s policies. Gen Z content creators have been invited to tour the White House and Biden campaign headquarters. In 2022, a group of 30 leading TikTok stars attended a news briefing on Russia’s invasion of Ukraine. And the New York Times has reported extensively on Biden’s efforts to host TikTok creators with State of the Union watch parties and exclusive invitations to Democratic fundraisers, as well as access to party officials and a special room to film videos at the upcoming DNC convention.

Republicans have made similar efforts to increase their presence on social media. Nearly 100 conservative influencers were given credentials at the RNC convention in July to generate buzz about former President Trump’s re-election campaign. The convention’s digital team set up a Creator Hub for them and provided time to go to the convention floor to film videos and interviews, Axios reported

Trump joined TikTok in June. His first post featured Ultimate Fighting Championship (UFC) President Dna White at a UFC title fight in New Jersey and garnered more than 2.3 million likes and 38 million views in just one day. Trump’s account now enjoys 9.2 million followers. 

But even as both parties embrace TikTok for campaigning, there has been bipartisan agreement that the app from Chinese-owned parent company ByteDance has national security vulnerabilities. Policymakers are concerned about the Chinese government’s ability to access TikTok’s data on American users or leverage the platform to push propaganda and influence elections. 

Trump, as president, issued an executive order to ban TikTok, but it was challenged in court. He has since reversed his position, arguing “there are a lot of people on TikTok that love it” and that if the app were banned, Facebook would benefit, which he calls “an enemy of the people.” 

Congress renewed the effort with Biden’s support and together the U.S. enacted a law in April that gives ByteDance a 270-day deadline to sell TikTok to a U.S. company or be banned. ByteDance must now find a buyer, remove TikTok from U.S. app stores or challenge the law in court before a January deadline. 

Congress renewed the effort with Biden’s support and together the U.S. enacted a law in April that gives ByteDance a 270-day deadline to sell TikTok to a U.S. company or be banned. ByteDance must now find a buyer, remove TikTok from U.S. app stores or challenge the law in court before a January deadline. 

Last month, TikTok called for a federal court to strike down the law that requires ByteDance to divest the app. ByteDance argues that divesting TikTok’s U.S. assets is “not possible technologically, commercially, or legally.” (reposted from Fox Business)

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International

VICE PRESIDENT HARRIS RISES IN THE POLLS

Vice President Kamala Harris begins a 103-day sprint for the Presidency in a virtual tie with former President Donald Trump.

That’s according to the latest New York Times/Siena College poll.

Overall, Donald Trump leads Kamala Harris 48% to 47% among likely voters in a head-to-head match.

That is a marked improvement for Democrats when compared to the Times/Siena poll in early July that showed Joe Biden trailing Trump by six percentage points, in the aftermath of a poor debate performance.

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