Newsletter By 2019-08-18
Now with currency digitization on the internet like blockchains and crypto-currencies, the digitization of currency is popular in the cyberspace and the world is introducing a legal virtual currency. However, the “super-sovereign currency” is more of a dream in a free world. Fair trade in global market is more of an ideal, yet in real market transactions will likely be affected by the strong influence and impact of geopolitical factors. A more pessimistic forecast is that, due to increasing force from anti-globalization, regional currencies will only be used in international smuggling (like in Iran and North Korea) and similar shadow economic activities. This would mean the future still belongs to geo-currencies that could be destroyed by geopolitics or be replaced, but they would not disappear.
>>China and Pakistan are strategic partners and always maintain friendly relations. China had helped Pakistan in different forms such as economic construction and various support from funds to technology, from materials to manpower. At the same time, Pakistan is also an important supporting country for the Belt & Road Initiative. From Pakistan's attempt to seek help from the United States and the Islamic world whilst neglecting China in the recent Kashmir issue, it appears to indicate that China may not be able to provide Pakistan with persuasive guarantees in this matter. If Pakistan realizes that China speaks without voice nor real status in the geopolitical game, for its survival, the country might choose another path.
>>The U.S.-China trade war has extended to currency and financial wars. As ANBOUND analyzed, the trade dispute between two countries follows a "Trilogy" that involves trade, enterprise, and finance. It started with tariff disputes to currency friction and exchange rate, which will possibly lead to full-scale financial war. Trade frictions and economic slowdowns are interrelated, and further bring more economic damages to the capital market. The Trump administration's suppression of China has not been executed logically. After listing China as a currency manipulator, the U.S. will continue a series of measures to escalate trade friction. Hence, China needs to prepare and respond ahead of time to different scenarios and possibilities.
>>The scientific technology and innovation are very important aspects for China’s future development. The key to real innovation is underlying knowledge and the mechanisms that encourage innovation. Israel's long-term efforts focus on knowledge and education, as well as state institutions and mechanisms to support innovation, have made them successful in their push for development in integrated innovation. It is true that China has established a national strategy of rejuvenating the country through science and education 25 years ago, yet it’s still valuable to learn from Israel's experience.
>>China's economy showed signs of softening in July. Industrial output rose 4.8 percent year-on-year in July, down from 6.3 percent in June, marking the weakest pace in 17 years, according to the National Bureau of Statistics. Retail sales grew 7.6 percent year-on-year to 3.3 trillion yuan ($471 billion) in July, down from 9.8 percent in June. Fixed-asset investment rose 5.7 percent year-on-year in the January to July period, slowing from 5.8 percent in the January to June period. Analysts believe that the weaker-than-expected July data could prompt policymakers in Beijing to step up policy-easing measures and come up with more targeted monetary easing and possible acceleration of local government bond issuance to shore up growth in the second half of the year.
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