CiCM 28th-29th October

NEWS IN CHINA

Wang Yi held talks with the U.S. Secretary of State Antony Blinken: On October 26 and 27, 2023, Foreign Minister Wang Yi held two rounds of talks with the U.S. Secretary of State Antony Blinken in Washington. The two-day interaction was followed by a meeting between Joe Biden and Wang Yi. The meeting is expected to secure President Xi Jinping’s attendance at the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco in November, as Xi has not visited the US since April 2017. Wang Yi has emphasized that "the road to San Francisco" will not be smooth sailing and cannot rely on "autopilot." The total of 6 hours of talks was “candid and in-depth” and a possibility of resuming the military-to-military channels, which have been largely frozen since then-House Speaker Nancy Pelosi visited Taiwan last August, was also underscored by Blinken. The dismissal of former Defence Minister Li Shangfu can push progress for the military talks as the U.S. had sanctioned Li under the so-called Countering America's Adversaries Through Sanctions Act (CAATSA) when he headed the equipment development department of the PLA in 2018. Wang also met National Adviser Jake Sullivan and hoped to maintain the “strategic channel of communication. In the coming days, the two sides will hold separate China-U.S. consultations on maritime affairs, consultations on arms control and non-proliferation, consultations on foreign policies, and Coordination Meeting on Disability Affairs. The two sides agreed to further increase direct passenger flights. Both sides also exchanged views on the Palestine-Israel war and stressed the two-state solution to resolve the conflict.

Experts develop framework to predict herb effectiveness in traditional Chinese medicine: Study published in the journal Science Advances by international team of scientists unveiled findings that delineate associations between human protein networks and common herbs used in TCM (traditional Chinese medicine). The study claims that understanding natural and traditional medicine can lead to world-changing drug discoveries. The therapeutic effectiveness of individual herbs is widely known, but TCM lacks a scientific foundation and is considered as a myth. The network medicine framework established in the research reveals the foundation of TCM creates a paradigm for understanding the molecular basis of natural medicine and predicting disease treatments. The researchers from Beijing Jiaotong University and Nanjing University of Information Science and Technology in China, and Northeastern University in the United States used symptom-gene association data containing 11,362 diseases, 13,271 genes, and 110,407 associations to derive relationships between proteins targeted by TCM herbs and proteins associated with symptoms such as fever, insomnia and poor appetite. The work opens up multiple follow-up directions for future work in TCM. The findings have been validated by clinical records of 1,936 in-patients who were prescribed herbal remedies in a TCM hospital.

Provincial government to strictly enforce the retirement policy of national uniform provisions: On the evening of October 28, the WeChat public account of the Hebei Provincial People's Social Department released a statement denouncing articles, being circulated in the media claiming "the longer you work, the higher the retirement age and the higher the retirement pension." Recently many such articles have been promoted in many Chinese provinces like Hunan, Shandong, Sichuan and so on, which are now being revealed as fake news. Hebei Provincial People's Social Affairs Department said that the province strictly implements the retirement policy stipulated by the state. The Sichuan Provincial People's Social Department pointed out in a statement on October 27, an article titled "People's Social Department: Sichuan Province will promote retirement by "service years", will be fully implemented on January 1, 2024. It was verified that the article and related screenshots were false information. The Government reiterated that "Long service" was part of planned economy era, but now all Provinces strictly implements the national unified retirement policy,

Hong Kong to see new ETF launch focused on Saudi Arabia’s stocks: After 7^th Saudi Arabia Future Investment Initiative Conference was held recently in Riyadh, the Saudi officials said Hong Kong will launch its first ETF product to invest in Saudi stocks, involving more than 50 of the largest local stocks, including oil giant Saudi Aramco and other leading companies. Investors will get a chance to tap into Saudi Arabia’s economy through a newly launched exchange-traded fund (ETF), managed by CSOP Asset Management, which could buy shares in corporations listed on the world’s seventh-largest stock market in Riyadh with a combined market capitalization of about $3 trillion. Paul Chan Mo-po, the Financial Secretary of Hong Kong claimed that the launch of ETF is a “milestone” for two-way capital flow between Saudi Arabia and Asia. An ETF(Exchange-Traded Fund) is a Basket of Securities which trades on an exchange just like a stock does, it has a price which allows it to be easily bought and sold. ETFs can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities. This comes after Saudi Arabian companies, like Aramco, can apply for secondary listings in Hong Kong through HKEX(Hong Kong Exchanges and Clearing Limited) listings, this will make Hong Kong a connector between the Middle East market and the world cost-effectively. Such ETFs have also found their place in Singapore and Australia, which will encourage asset managers to develop local products in Asia. The ETF launches have been widely successful which is evident by the new ETF launches in Asia last year outstripped those in the United States (US) and European Union (EU) combined.

RMB clearing bank launched in Pakistan: The Industrial and Commercial Bank of China (ICBC) in Pakistan has opened a renminbi (RMB) clearing bank. A clearing ban participates in the system to clear financial transactions. The opening of the RMB Cleaning Bank in Karachi will facilitate and settle cross-border transactions with China. Governor of State Bank of Pakistan Jameel Ahmed emphasized on increasing role of the renminbi becoming one of the world’s most widely used cross-border payment currencies, especially in developing countries. Both sides claimed that it will promote the development of China-Pakistan economic and trade cooperation, including reducing financial turnover costs, avoiding risks under long-arm jurisdiction, and building a more competitive pricing system, it will serve as a link between the two central banks, play a role in local currency settlement, providing renminbi liquidity and improving the yuan's trading infrastructure. In addition, the two sides will conduct more cooperation in the areas of renminbi lending, bond issuance, loans and financial market transactions to deepen banking relations between the two countries and achieve mutual benefit.

SOCIAL MEDIA CHATTER IN CHINA

Li Keqiang’s sudden death trending on Weibo: The news of former Premier Li Keqiang passing away at the age of 68, was confirmed by the Chinese state media on October 27. He left behind a legacy of bringing reforms in Chinese economy. Since then, the topic “Comrade Li Keqiang passed away” has garnered massive attention of Chinese citizens, who in comments have shown their disbelief saying, “It is so sudden”, “It’s hard to believe it’s real”. Many videos emphasizing the compassion and kindness in Li Keqiang are resurfacing on the social media, Videos like Li meeting with truck drivers, acknowledging them as a pivotal part of economy and praising their hard work. Many videos have been recollecting his interactions with common people, standing in the flood water, the videos bid him the last farewell. Many have also praised his efforts to combat human trafficking. The media has also highlighted the reaction embassies of different countries like Japan and Russia paying their condolences to Li and praising his indispensable role in establishment of healthy diplomatic ties. Photos 80 Hongxing Road, Hefei City, where he lived as a boy, were full of Memorial flowers. The comments and flood on emotions on Weibo and other social media platforms showed the love for Li Keqiang among the Chinese citizens.

INDIA WATCH

Confidence in the RMB is yet not seen, as the value of the RMB is not completely affected by the market forces, rather erratically devalued by the Chinese government. Even though the devaluation of the RMB made imports from China, cheaper, however, propelled the Indian side to import more thus worsening India’s trade deficit. The devaluation of Yuan strengthened US Dollar and mounted pressure on other currencies, including Rupee to depreciate, this led to inflation in oil prices. The companies with dollar dominated loans and investment faced the brunt of selling spree of FIIs (Foreign Institutional Investment), hampering the economic growth and loss in currency competitiveness against the Yuan further hurt its ailing exports. The suspension of Delhi and Moscow talks on settling their bilateral trade in rupees, and India not joining Regional Comprehensive Economic Partnership (RCEP) has given a stark picture of effects of Yuan Devaluation on India. India needs to push forward for low and stable inflation and a credible fiscal policy that supports confidence in the currency’s value. Learning from China’s example as it allowed the use of RMB outside China for current account transactions, by 2009, China had signed currency swap agreements, central banks, offshore clearing banks and offshore participating banks to invest excess RMB in debt securities, the launch of Shanghai Free Trade Zone in September 2013 to allow free trading between non-resident onshore and offshore accounts. Taking cues, Rupee must be made more freely convertible, pursuing a deeper and more liquid rupee bond market, additional currency swap agreements, tax incentives to foreign businesses to utilize the rupee for operations in India, improvement of legacy issues like infrastructure and logistics will make the Indian market attract FDIs, enhancing liquidity in market and push forward the internationalization on rupee.

Prepared By

Riddhima Singh

Riddhima Singh is a final year student at Jawaharlal Nehru University Delhi, pursuing Chinese Honours course. Through her degree she has had the opportunity to dive into culture, history and contemporary issues in Chinese society through language and research. Her research area surrounds the economic and fiscal policies of Communist Party of China and China's development model.