CiCM 22nd-23rd July

NEWS IN CHINA

China has the potential to enhance the international role of its currency, the Yuan, according to a report from Renmin University. While countries like Argentina, Brazil, and Russia are increasing their use of the yuan in trade with China, concerns persist over the currency's stability, convertibility, and China's capital controls. The report indicates that the yuan's internationalization score was 6.4 out of 100 last year, far behind the US dollar and euro. To boost the yuan's overseas use, the report suggests China should pursue more free-trade agreements, engage in low-carbon economic transformation, and actively participate in shaping future digital trade rules. Despite facing obstacles like yuan convertibility and capital controls, the yuan's international usage has grown due to China's trading importance and the Belt and Road Initiative. To elevate the yuan's status to that of the US dollar and euro by 2035, the report highlights the need for a modern industrial system, deepening domestic financial markets, and progress in yuan internationalization infrastructure.

The Xi'an Public Security Bureau issued a police report revealing a fraudulent scheme by a training institution providing services to returned students. 13 individuals involved in the case have been apprehended now. These students have a household registration in Xi'an but had left the city to study elsewhere or for other reasons. They returned specifically to take the high school entrance examination in Xi'an. This practice has raised concerns about fraudulent qualifications and the use of intermediary agencies to facilitate such arrangements, leading to investigations by the authorities. On the same day, Xi'an Mayor Ye Niuping met with student representatives to address their concerns. The Municipal Party Committee and Government will take decisive actions to investigate violations related to 3,608 returning students. The municipal government is taking firm measures to handle the matter and those found to have falsified household registration, school status, and academic scores will be disqualified from admission. The administration will also crack down on fraudulent training institutions. Enrollment policies and arrangements for the high school entrance examination will be maintained, and supplementary enrollment programs will be formulated for disqualified candidates. Additionally, the government will facilitate candidate access to individual test results and revise relevant regulations based on public feedback.

WeChat Pay and Alipay, two major mobile payment platforms in China, have announced that they will now allow overseas cards, including Visa and Mastercard, to be added to their payment accounts. This move aims to facilitate mobile payments for foreign users in China following the full resumption of travel and international business activities in the country. With events like the 31^st FISU Summer World University Games in Chengdu and the 19th Asian Games in Hangzhou attracting more visitors, the support for international cards will enhance the payment experience for foreign users and promote China's opening-up policy. Alipay has completed the support for overseas users to use mobile payments in China, enabling foreign users to pay at offline stores and taxis after adding an overseas bank card to their Alipay account. Similarly, Tencent's WeChat Pay is deepening collaboration with international card organizations to improve the digital payment experience for overseas users in China. Transactions under 200 yuan via WeChat Pay will have no transaction fees, while a 3 percent fee will be applied for transactions above 200 yuan. This move is seen as beneficial for foreigners visiting China for business and travel, contributing to a more favorable environment for economic opening-up and the "dual circulation" of domestic and international markets.

On July 23, the gymnasium of No. 34 Middle School in Qiqihar City, Heilongjiang Province, China, collapsed, trapping 15 people. After an overnight search and rescue operation, the last missing person was found, but unfortunately, he was soon declared dead. The tragic accident resulted in the death of 11 people. At the time of the collapse, there were 19 people in the gymnasium, four of whom managed to escape. The incident occurred during cloudy and rainy weather. The school's women's volleyball team was reportedly training inside when the collapse happened. The gymnasium, which had been standing for 26 years, had a construction area of about 1,200 square meters and had a concrete slab ceiling with a grid structure wall. The accident was caused by the construction unit's violation of regulations, as they had stacked construction material, perlite, on the gymnasium's roof during the construction of an adjacent teaching complex. The weight of the perlite increased significantly due to rainfall, leading to the roof's collapse. The person in charge of the construction unit has been taken into custody by the public security authorities pending further investigation.

China successfully launched the CERES-1 Y6 carrier rocket from the Jiuquan Satellite Launch Center. The commercial rocket took off on 22^nd July 2023 at 1:07 p.m. (Beijing Time), carrying two commercial satellites, Qiankun-1 and Xingshidai-16, into their designated orbits. Developed by Beijing-based high-tech company Galactic Energy, the CERES-1 is a small-scale solid-propellant carrier rocket designed for launching micro-satellites. This launch marks the sixth flight mission of the CERES-1 rocket series, demonstrating China's capabilities in the commercial space sector.

SOCIAL MEDIA CHATTER IN CHINA

Outrage mounts online as private school's exorbitant uniform price sparks controversy: A private secondary school in southern China, Guang Zheng Preparatory School, has come under fire for charging over 4,000 yuan (US$560) for its school uniforms, sparking concerns about the commercialization of education. The school offered a package with around 30 high-quality branded items, including regular uniforms, formal attire, winter and summer outfits, jackets, hoodies, and trench coats. The fees have been approved by education authorities but have raised eyebrows due to their high cost, especially considering the average annual income of employees in the city's private sector is much lower than the uniform price. Critics argue that the pricing makes the uniforms unaffordable for many families, and the cost only covers the first year, as students will need to buy new uniforms as they grow. The school has also faced criticism for additional substantial charges for other services, adding to concerns about the commercialization of education. Authorities have responded by stating that school uniforms should be considered a voluntary purchase, but the school may have violated the rules regarding this arrangement. Online observers have expressed frustration with the situation, questioning the necessity and affordability of the expensive uniforms and raising concerns about the intrusion of commercial interests into various aspects of school life.

INDIA WATCH

India aims to internationalize its currency, the Indian Rupee (INR), but faces obstacles such as low global appetite for the currency and the rising prominence of the Chinese Yuan. The country's tight capital controls and management of the rupee, along with its smaller share of global exports, also hinder its aspirations of becoming an international currency. In recent years, there have been discussions about using non-USD currencies in trade settlements to deepen regional economic cooperation. The need for alternative currencies has increased due to the imposition of sanctions on countries like Russia and other geopolitical developments. To address these challenges and promote the internationalization of the rupee, the Reserve Bank of India (RBI) appointed a panel, which proposed short-term, medium-term, and long-term measures. These measures aim to expedite the process of making the rupee more recognized and acceptable in international transactions. The panel's recommendations include a review of India's restrictive trade and capital controls framework. For the rupee to achieve true internationalization, various factors need to be in place, including easier convertibility, stable policies governing capital flows, developed financial markets, and a larger share in global trade. By implementing the panel's proposals, India seeks to increase the global acceptance and usage of its currency, promoting greater economic cooperation and enhancing its position in the international financial system. India’s attempts to encourage trade with Russia settled in INR haven't been successful, leading to a dependence on the Chinese Yuan. Thus, India now aims to implement the rupee promotion project with less geopolitically contentious countries like Bangladesh and Sri Lanka. But the overall goal remains difficult as India runs trade deficits with most of its top partners, and the INR needs to be a good store of value for international acceptance. India must focus on improving its business environment and deepening financial markets for better results. The regulatory framework should be re-examined to allow banks to offer a comprehensive range of banking services in offshore markets, allowing a more significant role for the rupee in international financial transactions.

Prepared By

Akshita Pant

Akshita Pant is a post-graduate research scholar with a degree in Masters in International Relations from Amity University. Her expertise lies in the field of geopolitics, particularly focusing on China and East Asia. With a keen interest in India's foreign policy, national security, and culture, with a deep passion for understanding the complexities of international relations.