China
Currency internationalisation in Asia
Author: Gregory Chin, York University and CIGI
Without political fanfare, China took two more steps in internationalising its currency in early December 2012.
On 4 December, trading giants South Korea and China agreed to use their currency swap, valued at US$59 billion, to boost bilateral trade using the yuan and the won. On 12 December, Chinese central bank authorities awarded the Bank of China’s Tapei branch the role of clearing bank for yuan transactions in Taiwan. In turn, the Bank of Taiwan’s Shanghai branch will clear transactions on the Chinese mainland. Although market fundamentals will ultimately determine the viability and sustainability of the renminbi as an international currency, these agreements highlight that politics matter.
Politics also features in holding up another dimension of Chinese currency internationalisation: with Japan. On Christmas Day a year ago, China and Japan signed the agreement for ‘Enhanced Cooperation for Financial Markets Development between Japan and China’. It included wide-ranging currency cooperation arrangements to promote the use of their currencies for trade and investment. Both countries wanted to reduce costs and risks for their companies — and implicitly called for less reliance on the US dollar, currently their predominant medium of exchange. Japanese authorities also confirmed a plan to buy the equivalent of US$10 billion in Chinese government bonds, marking the first time they added renminbi-denominated assets to Japan’s official reserve holdings.
The significance of the pact lies in the fact that together, China and Japan hold the world’s largest foreign-currency reserves, with China holding about US$3.2 trillion and Japan US$1.3 trillion at the time of the agreement in December 2011. Any moves to reshuffle those holdings would change the global currency map.
During the first half of 2012, the Joint Working Group for Development of Japan–China Financial Markets, established to flesh out the details of the bilateral agreement, made significant progress. By June 2012, direct trading of the yen–yuan commenced on the Shanghai and Tokyo exchanges.
Recent visits by the author to Tokyo and Hong Kong in December 2012 have highlighted that one of the overlooked casualties of the ongoing island dispute between China and Japan is their currency pact. Further implementation of the agreement has stalled. The Working Group has stopped meeting due to the political fallout. The offer from the Japan Bank for International Cooperation to sell an undisclosed amount of renminbi-denominated bonds on mainland markets remains in limbo, awaiting formal Chinese approval — after being listed as a pilot program in the agreement signed on 25 December 2011.
The amount of Sino–Japanese trade that is settled in yuan and yen remains low; nearly 60 per cent of China–Japan trade continues to be settled in US dollars. Given the continuing importance of the United States as an end market, and other forces of habit that produce inertia, Japanese traders remain reluctant to accept renminbi for their exports to China, and continue to prefer the US dollar as the settlement currency of choice. Conversely, Japanese companies continue to convert their yen into US dollars when buying from China. The business incentive to convert to yen–yuan settlement also appears lacking, especially for the large Japanese trading companies, as the cost of settling in US dollars remains low.
Yet, coming out of the 2007–09 global financial crisis, central banks and finance ministry officials in Beijing and Tokyo declared a desire to promote diversification in international currencies. More recently, they have been joined by some of their neighbours in the region, namely Malaysia and South Korea, which are also taking initial steps to promote the use of their national currencies internationally. But the territorial dispute between China and Japan has diverted attention from currency cooperation.
If promoting international currency diversification remains a priority, then both sides ought to embrace their recent leadership changes as an opportunity to hit the reset button. More broadly, in the interests of international stability and cooperation, both sides need to put the crucial China–Japan relationship on more solid footing. Beijing’s offer of ‘joint development’ of the resources around the disputed islands is a positive step.
At the same time, newly returned Japanese prime minister Shinzo Abe should remind the public that Japan’s recovery during the past decade has been intimately tied to surging trade and investment ties with China.
Regarding currency cooperation efforts, Japanese finance officials offered two related suggestions during the recent research discussions in Tokyo. First, they reiterated that recent leadership changes in Beijing and Tokyo, and further imminent changes on the Chinese side, present an opportunity for both sides to adjust and re-establish relations and to reduce tensions.
Abe may have initiated this shift by offering reassuring statements at his first press briefing after election day, when he told a Chinese Xinhua reporter that Japan–China relations are ‘one of the most important bilateral relationships’ and he pledged to improve bilateral relations. He further emphasised that China is an indispensable country for the Japanese economy to keep growing, and noted that ‘we need to use some wisdom so that political problems will not develop and affect economic issues’.
Second, Japanese finance officials noted rather hopefully that Japan and South Korea also experienced territorial disputes in the past — but that once the disagreements were dealt with, it did not take very long before finance ministry representatives from both sides resumed their talks, picking up where they left off. The same might be said for the resumption of the China–Japan Joint Working Group.
Gregory Chin is Associate Professor at York University, Canada, and China Research Chair at The Centre for International Governance Innovation.
- The renminbi’s rise as an international currency: historical precedents
- The renminbi as a global currency?
- The valuation of China’s currency – Special editorial
View original post here:
Currency internationalisation in Asia
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
- China Unveils Plan to Upgrade Industrial Equipment
- China deepens engagement with new Indonesian president as top diplomat visits Jakarta
- New Publication: A Guide for Foreign Investors on Navigating China’s New Company Law
