china

‘I can’t look at myself in the mirror’: Hendry reveals he has turned bullish

"Eclectica hedge fund manager Hugh Hendry has said he has been forced to leave his bearish outlook behind as he faces up to a market 'which only makes sense through the prism of trends'. Hendry said he is no longer fighting the 'two-way feedback loop' which is continuing to boost risk assets. That centres on the currency war being played out between the US and China, in which US QE prompts dollar-denominated investment to head to China, and China fights the resulting upwards pressure on its currency by manufacturing an investment boom - leading to falling US inflation expectations, which in turn prompts the Federal Reserve to loosen policy once again." Continue reading →

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Bitcoin: China’s New Special Economic Zone

"With the People’s Bank of China’s announcement, the establishment of Bitcoin as yet another one of these areas – the first ever that only exists in cyberspace, has essentially become official. The announcement specifically forbade the existing Chinese banking system from interacting with the Bitcoin economy, but otherwise created an environment for the Bitcoin economy that some have described as even more free than that of Europe. Although exchanges are required to follow know-your-customer guidelines and register with telecommunications authorities, aside from this they do not need any kind of financial license in order to operate. The Bitcoin economy will be allowed to grow." Continue reading →

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China central bank suggests faster tempo for freeing yuan

"China's central bank governor has dangled the prospect of speeding up currency reform and giving markets more room to set the yuan's exchange rate as he underlines broader plans for sweeping economic change. The central bank under Zhou Xiaochuan has consistently flagged its intention to liberalize financial markets and allow the yuan to trade more freely, even before the Communist Party's top brass unveiled late last week the boldest set of economic and social reforms in nearly three decades. Since the 60-point reform plan was released, Zhou has suggested urgency in pushing for change, although he has not provided any specific timetable." Continue reading →

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Now, in Second Place Is …

"The yuan in October emerged as the world’s second-most used currency in global trade finance. Countries generally trade through the dollar. They convert euros (or whatever the local currency happens to be) into greenbacks to buy some load of widgets from the Chinese. Then, China takes those dollars and converts them into yuans. But now countries are increasingly bypassing the buck and just dealing directly in the yuan. Yes, the dollar still plays a role in 81% of world trade, and the yuan is only at 8.7%. But all big trends start off small – the yuan was less than 2% of trade as recently as January 2012 – and this, mark my words, is part of a much bigger trend. And it will impact your life." Continue reading →

Continue ReadingNow, in Second Place Is …

Despite panic, China’s regulation of Bitcoin leaves room for optimism

"In the aftermath of the first official statement by the Chinese government regarding Bitcoin, the entrepreneurs in China’s Bitcoin industry are optimistic. As is common in China, the actual extent of these regulations will be worked out over time as the Bitcoin industry develops, giving the government room to respond to new threats. My view is that this notice represents an expected development that encouragingly stops short of more stringent restrictions or an outright ban on Bitcoin’s use, and tomorrow China will still be the biggest potential Bitcoin market in the world." Continue reading →

Continue ReadingDespite panic, China’s regulation of Bitcoin leaves room for optimism

China feeds bitcoin frenzy

"More than a third of the world's bitcoin transactions now flow through China's largest bitcoin trading website BTC China, according to bitcoin data websites. China has surpassed Japan's Mt.Gox and Europe's BitStamp, reaching 100,000 Bitcoins in daily trading volumes, or more than 400 million yuan (U.S.$65.7 million) in daily transactions. In recent years China has been pushing to internationalize the yuan, adding more value to the once tightly controlled currency on international markets. But despite the changes, controls mean individuals still find it difficult to invest in assets outside China. As a result, more Chinese are looking to invest in alternative assets like bitcoin." Continue reading →

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China central bank warns banks against use of bitcoin

"China's central bank warned on Thursday that financial institutions should not trade the digital currency bitcoin, saying that while it does not yet pose a threat to China's financial system, it carries risks. The central bank also said in a statement on its website that it would act to prevent money laundering risks from bitcoin, a prominent digital currency that is not backed by a government or central bank. The PBOC will require trading platforms that deal in virtual currencies such as bitcoin to register with telecommunications authorities, it said. The central bank did allow that ordinary individuals were free to use bitcoin, so long as they take on the risk themselves." Continue reading →

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Proposals announced to boost Shanghai Free Trade Zone

"In a six-page report that included 30 detailed instructions, the People's Bank of China said yesterday it would allow residents of the zone - seen as a test bed for liberalising the financial sector - to set up 'resident free trade accounts' in both domestic and foreign currencies, and would allow yuan to be fully convertible under those accounts 'when the time is ripe'. The 29 sq km zone, the first of its kind on the mainland, was set up two months ago and the guidelines suggest it will offer benefits that Beijing has been reluctant to offer other pilot areas. For example, 'qualified' individual investors will be able to make various foreign investments, including trading overseas securities." Continue reading →

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China’s Largest Bitcoin Exchange Seeks Recognition for Currency

"BTC China, the nation’s largest Bitcoin exchange, has had low-level discussions with regulators seeking recognition of the digital currency that would allow it to be used to buy goods and services in the country. The company has sought to discuss Bitcoin regulations with officials from agencies including the People’s Bank of China, the China Banking Regulatory Commission and the China Securities Regulatory Commission, BTC China Chief Executive Officer Bobby Lee said in a Nov. 29 interview in Shanghai. It’s not yet been able to arrange any high-level meetings, he said." Continue reading →

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Bitcoin Gets a Cautious Nod From China’s Central Bank

"Speaking at an economic forum on Wednesday, Yi Gang, the deputy governor of the People’s Bank of China and director of the State Administration of Foreign Exchange, said that it would be impossible for China’s central bank to recognize the Bitcoin as a legitimate financial instrument in the near future. But, Mr. Yi added, people are free to participate in the Bitcoin market and he would personally adopt a long-term perspective on the currency. The statement comes during a week of remarkable turbulence on China’s numerous Bitcoin exchanges." Continue reading →

Continue ReadingBitcoin Gets a Cautious Nod From China’s Central Bank