China
US institutions will keep Trump’s currency war at bay, but for how long?
Author: Adam Triggs, ANU
‘China has always used currency manipulation to steal our businesses and factories, hurt our jobs, depress our workers’ wages and harm our farmers’ prices’ tweeted the President of the United States. ‘Not anymore!’ Mr Trump’s assertions on currencies range from overblown to completely baseless. But this has not stopped his actions likely to endanger the US and global economies.
US authorities labelled China a currency manipulator on 5 August 2019 for the first time in 25 years after the RMB fell below the 7 RMB-per-dollar level. This was despite China’s actions failing to satisfy the US Treasury’s own definition of a currency manipulator. While US institutions may keep President Trump in check in the near term, this represents a dangerous escalation in tensions and a serious challenge to financial markets, US institutions and the rules-based system.
An undervalued exchange rate makes a country’s exports cheaper than they otherwise would be compared to those of other countries. Economists measure whether an exchange rate is undervalued by calculating what an exchange rate ought to be based on the characteristics of that economy, how much it trades with the world, how much it invests overseas and how much other countries invest in it. If an exchange rate is below what these fundamentals imply it ought to be, it is possible (though not conclusive) that the country is depreciating its exchange rate to achieve a competitive advantage.
This has not been the case for China. The IMF judges that China’s exchange rate in 2018 was broadly in-line with its fundamentals. This is not new. The IMF reached the same conclusion in its analyses of China’s currency for at least the last five years and, before that, found that China’s exchange rate was only marginally undervalued. US Treasury analysis comes to the same conclusions, supported by the fact that China’s current account surplus is almost non-existent: down from 10 per cent of GDP in 2007 to almost zero today.
Economists also assess whether a country is manipulating its exchange rate to achieve a competitive advantage by monitoring whether they persistently engage in one-sided interventions in foreign exchange markets. The US Treasury has never been able to demonstrate this for any major US trading partner, including China.
It is therefore perplexing why China has suddenly been labelled as a currency manipulator, a label which opens the door to sanctions and further trade restrictions. The trigger was that, for the first time in 10 years, China’s central bank has allowed the RMB to fall below the 7 RMB-per-dollar level. But the key word in this sentence is ‘allow’. A slowing Chinese economy, weakening exports due to US trade restrictions and an almost balanced current account means a weaker Chinese currency is to be expected. ‘They are not driving the currency down’ notes Marc Chandler, Chief Market Strategist at Bannockburn Global Forex ‘but just accepting market forces’.
Cornell University’s Eswar Prasad notes that China doesn’t even meet the US Treasury’s own definition of a currency manipulator. Mark Sobel, a 40-year US Treasury veteran, made a similar point. ‘It [China] has not been intervening’, he says. ‘By Treasury’s own foreign exchange-report criteria, China doesn’t even come close to meeting the terms for manipulation’. Labelling China as a currency manipulator, contrary to its own criteria, undermines the credibility of the US Treasury.
China is not alone. President Trump has regularly accused Europe and Japan of pushing down the value of their currencies to unfairly compete with the United States. It is true that the exchange rates of Germany, Japan, South Korea, Mexico and the euro area have been persistently undervalued in recent years. But even for these economies, the reality is more complex than what Trump suggests.
Germany’s exchange rate, for example, is undervalued by between 8 and 18 per cent. But this is primarily because it shares an exchange rate with the rest of the euro area. And although the common currency gives Germany an undervalued exchange rate, it gives France, Italy and a host of other euro area economies an overvalued exchange rate, netting-out most of the euro-wide impact.
US punishment of these economies for currency manipulation would rightly leave them feeling aggrieved and make the prospect of a currency war more likely. The costs would be substantial. Most economic models suggest that a currency war will distort trade and investment…
China
New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
China has been the world’s largest manufacturer for 14 years, producing one-third of global manufacturing output. In the Emerging Asia Manufacturing Index 2024, China ranks highest among eight emerging countries in the region. Challenges for these countries include global demand disparities affecting industrial output and export orders.
Known as the “World’s Factory”, China has held the title of the world’s largest manufacturer for 14 consecutive years, starting from 2010. Its factories churn out approximately one-third of the global manufacturing output, a testament to its industrial might and capacity.
China’s dominant role as the world’s sole manufacturing power is reaffirmed in Dezan Shira & Associates’ Emerging Asia Manufacturing Index 2024 report (“EAMI 2024”), in which China secures the top spot among eight emerging countries in the Asia-Pacific region. The other seven economies are India, Indonesia, Malaysia, the Philippines, Thailand, Vietnam, and Bangladesh.
The EAMI 2024 aims to assess the potential of these eight economies, navigate the risks, and pinpoint specific factors affecting the manufacturing landscape.
In this article, we delve into the key findings of the EAMI 2024 report and navigate China’s advantages and disadvantages in the manufacturing sector, placing them within the Asia-Pacific comparative context.
Emerging Asia countries face various challenges, especially in the current phase of increased volatility, uncertainty, complexity, and ambiguity (VUCA). One notable challenge is the impact of global demand disparities on the manufacturing sector, affecting industrial output and export orders.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
China
Is journalist Vicky Xu preparing to return to China?
Chinese social media influencers have recently claimed that prominent Chinese-born Australian journalist Vicky Xu had posted a message saying she planned to return to China.
There is no evidence for this. The source did not provide evidence to support the claim, and Xu herself later confirmed to AFCL that she has no such plans.
Currently working as an analyst at the Australian Strategic Policy Institute, or ASPI, Xu has previously written for both the Australian Broadcasting Corporation, or ABC, and The New York Times.
A Chinese language netizen on X initially claimed on March 31 that the changing geopolitical relations between Sydney and Beijing had caused Xu to become an expendable asset and that she had posted a message expressing a strong desire to return to China. An illegible, blurred photo of the supposed message accompanied the post.
This claim was retweeted by a widely followed influencer on the popular Chinese social media site Weibo one day later, who additionally commented that Xu was a “traitor” who had been abandoned by Australian media.
Following the publication of an ASPI article in 2021 which exposed forced labor conditions in Xinjiang co-authored by Xu, the journalist was labeled “morally bankrupt” and “anti-China” by the Chinese state owned media outlet Global Times and subjected to an influx of threatening messages and digital abuse, eventually forcing her to temporarily close several of her social media accounts.
AFCL found that neither Xu’s active X nor LinkedIn account has any mention of her supposed return to China, and received the following response from Xu herself about the rumor:
“I can confirm that I don’t have plans to go back to China. I think if I do go back I’ll most definitely be detained or imprisoned – so the only career I’ll be having is probably going to be prison labor or something like that, which wouldn’t be ideal.”
Neither a keyword search nor reverse image search on the photo attached to the original X post turned up any text from Xu supporting the netizens’ claims.
Translated by Shen Ke. Edited by Shen Ke and Malcolm Foster.
Asia Fact Check Lab (AFCL) was established to counter disinformation in today’s complex media environment. We publish fact-checks, media-watches and in-depth reports that aim to sharpen and deepen our readers’ understanding of current affairs and public issues. If you like our content, you can also follow us on Facebook, Instagram and X.
Read the rest of this article here >>> Is journalist Vicky Xu preparing to return to China?
China
Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
Foreign residents in China can request a criminal record check from their local security bureau. This certificate may be required for visa applications or job opportunities. Requirements and procedures vary by city. In Shanghai, foreigners must have lived there for 180 days with a valid visa to obtain the certificate.
Foreign residents living in China can request a criminal record check from the local security bureau in the city in which they have lived for at least 180 days. Certificates of no criminal record may be required for people leaving China, or those who are starting a new position in China and applying for a new visa or residence permit. Taking Shanghai as an example, we outline the requirements for obtaining a China criminal record check.
Securing a Certificate of No Criminal Record, often referred to as a criminal record or criminal background check, is a crucial step for various employment opportunities, as well as visa applications and residency permits in China. Nevertheless, navigating the process can be a daunting task due to bureaucratic procedures and language barriers.
In this article, we use Shanghai as an example to explore the essential information and steps required to successfully obtain a no-criminal record check. Requirements and procedures may differ in other cities and counties in China.
Note that foreigners who are not currently living in China and need a criminal record check to apply for a Chinese visa must obtain the certificate from their country of residence or nationality, and have it notarized by a Chinese embassy or consulate in that country.
Foreigners who have a valid residence permit and have lived in Shanghai for at least 180 days can request a criminal record check in the city. This means that the applicant will also need to currently have a work, study, or other form of visa or stay permit that allows them to live in China long-term.
If a foreigner has lived in another part of China and is planning to or has recently moved to Shanghai, they will need to request a criminal record check in the place where they previously spent at least 180 days.
There are two steps to obtaining a criminal record certificate in Shanghai: requesting the criminal record check from the Public Security Bureau (PSB) and getting the resulting Certificate of No Criminal Record notarized by an authorized notary agency.
This article is republished from China Briefing. Read the rest of the original article.
China Briefing is written and produced by Dezan Shira & Associates. The practice assists foreign investors into China and has done since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at china@dezshira.com.
- New Report from Dezan Shira & Associates: China Takes the Lead in Emerging Asia Manufacturing Index 2024
- Is journalist Vicky Xu preparing to return to China?
- Guide for Foreign Residents: Obtaining a Certificate of No Criminal Record in China
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