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Daily Archives: August 24, 2022

Humour: News in Cartoons

Chart: U.K. Car Sales Are Running on Batteries

Source : Statista

The Challenges Ahead for China’s Digital Yuan

Liu Ran, Wu Xiaomeng and Denise Jia wrote . . . . . . . . .

In three years of experiments, China’s central bank has made significant progress in developing its central currency.

Total transactions since late 2019 reached 83 billion yuan ($12.3 billion) as of the end of May. Nearly 4.6 million merchants across China have come to accept the digital yuan, known as the e-CNY, as payment. People have used it for shopping, dining, personal finance and business uses such as paying taxes and employees.

For all that, the People’s Bank of China (PBOC) still has a long way to go in its digital currency project. Use of the e-CNY in pilot programs is a drop in the bucket compared with the volume of commerce conducted using China’s two dominant mobile payment systems — Ant Group’s Alipay and Tencent’s WeChat Pay. Alipay’s monthly transactions alone averaged 10 trillion yuan in 2020, the company disclosed.

To bridge that gap, a large amount of investment in technology will be required. Achieving the second-by-second payment processing capacity needed to handle the massive volume of transactions in China’s economy will mean spending billions of yuan to build data centers and add servers and bandwidth, Caixin learned.

Expanding the PBOC’s pilot programs and application scenarios will create demand for software and hardware upgrades at financial institutions as well as opportunities for smart hardware consumption, attracting more capital into the emerging sectors. At the same time, the central bank will have to establish and amend regulations as the current rules covering finance, taxation, accounting and statistics based on a physical currency will no longer be applicable with the digital yuan.

At a meeting Aug. 1, the central bank vowed to further expand trials of the digital currency. Currently, the e-CNY is being tested in 23 cities and regions in 15 provinces and provincial-level cities. But the expansion will face challenges as Chinese consumers are already used to the convenience of Alipay and WeChat Pay.

The main purpose of the pilot program is to build confidence in the digital yuan’s reliability and ease of use, said Mu Changchun, the head of the central bank’s digital currency research institute. The digital yuan is a legal currency issued by the PBOC and backed by the government, Mu said.

No matter what form it takes, a currency has three main functions: as a store of value, a unit of account and a medium of exchange. For consumers, the most basic function is as a medium of exchange or payment. The central bank’s digital currency research institute set its goal for the e-CNY to quickly reach the same experience as all other payment tools in the market, Mu said.

Focus on retail

Central banks have two options for digital currencies: a wholesale central bank digital currency (CBDC), mainly issued to institutions such as commercial banks and mostly for large-value transactions, or a retail CBDC issued to individuals and businesses for daily transactions. From the beginning, China aimed for a retail currency. The main purpose of developing the digital yuan is to meet needs for domestic retail payments and improve financial inclusion, according to PBOC Governor Yi Gang.

The e-CNY will fully meet the public’s daily payment needs, further improve the efficiency of the retail payment system and reduce costs, the central bank said in a progress report in July 2021.

Promotion of the digital yuan started with money giveaways by local governments for shopping. Shenzhen, one of the first pilot cities, in October 2020 handed out 10 million yuan of e-CNY to the public that could be spent at restaurants and shops. Other pilot cities followed suit.

In May, Shenzhen distributed an additional 30 million yuan of e-CNY to local residents in a joint promotion with food delivery platform Meituan Dianping. During the project, more than 520,000 merchants on the platform accepting e-CNY reported that orders increased by 58.9% and transaction amounts by 64.6% from the same period a year earlier.

The challenge now is how to improve the e-CNY’s use and stickiness with users and merchants, officials said. Salary payments and other corporate transactions can help expand its use. When people get paid in digital yuan, they have to spend it, the PBOC’s Mu said.

In the next step, the central bank will promote deeper e-CNY integration for the public and for personal business; support fund management and salary payment services for micro, small and medium-sized enterprises; and back public sector services such as taxation and government transactions, said Fan Yifei, a PBOC deputy governor.

Beyond consumption

Use of the digital currency has been extended beyond consumption. Since June, state-owned China Construction Bank has been allowing customers to use the e-CNY to purchase wealth management products. On June 10, a customer purchased the first auto insurance policy using the e-CNY.

The PBOC has also explored innovative e-CNY applications. During a pilot program, smart contracts were used to make the e-CNY programmable, more expandable and better integrated into various scenarios, the central bank said.

In pre-paid consumption, such as long-term apartment rental platforms and tutoring businesses, there have been multiple cases in which owners of failed businesses absconded with consumers’ pre-paid funds. The digital yuan is believed to have the capacity to help prevent such thefts.

In December 2021, Agricultural Bank of China and Huawei Technologies Co. Ltd. launched the first e-CNY-based apartment rental supervision platform in Shenzhen. In May, China Construction Bank and the Futian District government of Shenzhen jointly established the country’s first e-CNY prepaid platform for education and training companies. In July, Bank of Communications signed an e-CNY prepaid tuition custody service agreement with a Beijing-based English training company.

Under such digital yuan-based custody models, consumers’ prepaid funds are stored in personal digital wallets, and only the actual amounts being consumed are released to merchants. This effectively defuses the risk that business owners will vanish with customers’ funds, Mu said.

In the future, consumers may use prepaid funds in digital wallets to buy wealth management products, and banks may provide loans and other financing for merchants, which will improve efficiency, Mu said.

Fees for merchants

To reduce competition with bank deposits, e-CNY funds pay no interest and circulate in the same way as the physical currency in a two-tier system under which the PBOC issues currency and commercial banks exchange e-CNY for the public. To increase public acceptance of the e-CNY, the central bank currently does not charge fees to banks and other operating institutions for the conversion and circulation of the digital yuan, and institutions do not charge customers for conversion.

The central bank has never promised that the digital yuan will always be free for merchants. An industry researcher said it’s not realistic to keep the use of digital yuan free in the long run.

“The e-CNY has not been fully marketized and is still in the pilot stage,” the researcher said. “We will gradually explore a healthy and sustainable business model.”

To give full play to the two-tier operating structure, it is necessary to adhere to a market-oriented development and allow market institutions to participate in the system in a healthy and sustainable way, requiring an incentive mechanism, Mu said. The digital yuan is free for individual consumers, but banks can charge fees to other operating institutions, such as insurance companies and online platforms, which then can charge fees to merchants, Mu said.

Caixin learned that related rules are in the works and that future regulations will set a cap for such fees.

Opportunities for tech firms

Building the digital yuan system will require talent and technology, creating business opportunities for tech companies, said Lu Wei, chief computer analyst at Minsheng Securities.

Compared with large banks and internet companies, small and medium-sized enterprises will benefit more from the expansion of the e-CNY in the short term, said Cao Senyuan, an analyst with Zhongtai Securities.

In the process of promoting the digital yuan, two categories of demand will emerge: Banks will need to transform and upgrade their digital currency systems, and applications will need to be created in finance, government affairs, credit, taxation, agriculture, supervision and other areas, Cao said.

Shenzhen Techo Telecom Co. Ltd., a financial cloud platform business, is one of the industry pioneers exploring digital currency. It set up a subsidiary—Shenzhou Fangyuan—to develop innovations based on various applications for the e-CNY.

As a technology provider at the Beijing 2022 Winter Olympics, where the digital yuan was tested, Shenzhen Techo helped banks to build and test systems. In the future, the company will explore applications for the digital yuan in multiple scenarios such as prepaid cards, logistics, supply chain finance, government affairs and taxation, property rights deals, and enterprise services, said Dai Ke, deputy general manager of Shenzhen Techo.

New Rules Needed

As the e-CNY is China’s official currency, existing international standards and Chinese laws against money laundering and financing terrorism apply. The job of protecting consumers’ rights and interests in the e-CNY system are the same as for physical cash. However, regulatory measures and requirements for the e-CNY need to be tailored, the PBOC said in its progress report.

At a March meeting, the PBOC called for forward-looking legal structures to ensure the security of the digital yuan. China plans to tighten legislation around the digital yuan to protect user privacy and combat illegal activities such as money laundering and terrorist financing, Mu said in a July speech at the 5th Digital China Summit.

To guarantee the anonymity of the digital yuan, authorities plan to improve regulations, including establishing a mechanism to regulate the use of customer information so that operating institutions will be able to apply for access to user information only for risk analysis and monitoring when illegal transactions are suspected, Mu said.

Source : Sixth Tone

Chart: Saudi Aramco, the World’s Biggest Oil Firm Reported US$48.4bn of Net Income for Q2, 2022

Source : Chartr

What Is Effective Altruism?


Effective altruism is a project that aims to find the best ways to help others, and put them into practice.

It’s both a research field, which aims to identify the world’s most pressing problems and the best solutions to them, and a practical community that aims to use those findings to do good.

This project matters because, while many attempts to do good fail, some are enormously effective. For instance, some charities help 100 or even 1,000 times as many people as others, when given the same amount of resources.

This means that by thinking carefully about the best ways to help, we can do far more to tackle the world’s biggest problems.

Effective altruism was formalized by scholars at Oxford University, but has now spread around the world, and is being applied by tens of thousands of people in more than 70 countries.

People inspired by effective altruism have worked on projects that range from funding the distribution of 200 million malaria nets, to academic research on the future of AI, to campaigning for policies to prevent the next pandemic.

They’re not united by any particular solution to the world’s problems, but by a way of thinking. They try to find unusually good ways of helping, such that a given amount of effort goes an unusually long way. Here are some examples of what they’ve done so far, followed by the values that unite them:

What are some examples of effective altruism in practice?

Preventing the next pandemic

Why this issue?

People in effective altruism typically try to identify issues that are big in scale, tractable, and unfairly neglected.2 The aim is to find the biggest gaps in current efforts, in order to find where an additional person can have the greatest impact. One issue that seems to match those criteria is preventing pandemics.

Researchers in effective altruism argued as early as 2014 that, given the history of near-misses, there was a good chance that a large pandemic would happen in our lifetimes.

But preparing for the next pandemic was, and remains, hugely underfunded compared to other global issues. For instance, the US invests around $8bn per year preventing pandemics, compared to around $280bn per year spent on counterterrorism over the last decade.

Preventing terror attacks is certainly important. But the scale of the issue seems smaller. For instance, in the last 50 years, around 500,000 people have been killed by terrorism. But over 21 million people were killed by COVID-19 alone4 – or consider the 40 million killed by HIV/AIDS.

Not to mention, a future pandemic could easily be much worse than COVID-19: there’s nothing to rule out a disease that’s more infectious than the Omicron variant, but that’s as deadly as smallpox.

In effective altruism, once a big and neglected problem has been identified, the community looks for solutions that have a chance of making a big improvement, and are neglected by others working on that issue, which brings us to…

Some examples of what’s been done

In 2016 Open Philanthropy – a foundation inspired by effective altruism – became the largest funder of the Johns Hopkins Center for Health Security, which is one of the few groups doing research to identify better policy responses to pandemics, and was an important group in the response to COVID-19.

When COVID-19 broke out, members of the community founded 1DaySooner, a non-profit that advocates for human challenge trials. In this type of vaccine trial, healthy volunteers are deliberately infected with the disease, enabling near-instant testing of the vaccine. As one of the only advocates for this intervention, 1DaySooner has signed up over 30,000 volunteers, and played an important role in starting the world’s first COVID-19 human challenge trial. This model can be repeated when we face the next pandemic.

Members of the effective altruism community helped to create the Apollo Programme for Biodefense, a multibillion dollar policy proposal designed to prevent the next pandemic.

Providing basic medical supplies in poor countries

Why this issue?

It’s common to say that charity begins at home, but in effective altruism, charity begins where we can help the most. And this often means focusing on the people who are most neglected by the current system – which is often those who are more distant from us.

Over 700 million people live on less than $1.90 per day. In contrast, an American living near the poverty line lives on 20 times as much, and the average American college graduate lives on about 107 times as much. This places them in the top 1.3% of income, globally speaking. (These amounts are already adjusted for the fact that money goes further in poor countries.)

Global inequality is extreme. Because of this, transferring resources to the very poorest people in the world can do a huge amount of good. In richer countries like the US and UK, governments are typically willing to spend over $1 million to save a life.10 This is well worth doing, but in the world’s poorest countries, the cost of saving a life is far lower.

GiveWell is an organization that does in-depth research to find the most evidence-backed and cost-effective health and development projects. It discovered that while many aid interventions don’t work, some, like providing insecticide-treated bednets, can save a child’s life for about $5,500 on average. That’s 180 times less.

These basic medical interventions are so cheap and effective that even the most prominent aid sceptics agree they’re worthwhile.

Some examples of what’s been done

Over 110,000 individual donors have used GiveWell’s research to contribute more than $1 billion to its recommended charities, supporting organisations like the Against Malaria Foundation, which has distributed over 200 million insecticide-treated bednets. Collectively these efforts are estimated to have saved 159,000 lives.

In addition to charity, it’s possible to help the world’s poorest people through business. Wave is a technology company founded by members of the effective altruism community, which allows people to transfer money to several African countries faster and several times more cheaply than existing services. It’s especially helpful for migrants sending money home to their families, and has been used by over 800,000 people in countries like Kenya, Uganda and Senegal. In Senegal alone, Wave has saved its users hundreds of millions of dollars in transfer fees – around 1% of the country’s GDP.

Helping to create the field of AI alignment research

Why this issue?

People in effective altruism often end up focusing on issues that seem counterintuitive, obscure or exaggerated. But this is because it’s more impactful to work on issues that are neglected by others (all else equal), and the issues that are neglected by others are more likely to be unconventional or counterintuitive. One example is the AI alignment problem.

Artificial intelligence (AI) is progressing rapidly. The leading AI systems are now able to engage in limited conversation, solve college-level maths problems, explain jokes, generate extremely realistic images from text, and do basic coding.14 None of this was possible just ten years ago.

The ultimate goal of the leading AI labs is to develop AI that is as good as, or better than, human beings on all tasks. It’s extremely hard to predict the future of technology, but various arguments and expert surveys suggest that this achievement is more likely than not this century. And according to standard economic models, once general AI can perform at human level, technological progress could dramatically accelerate.

The result would be an enormous transformation, perhaps of similar or greater significance to the industrial revolution in the 1800s. If handled well, this transformation could bring about abundance and prosperity for everyone. If handled poorly, it could result in an extreme concentration of power in the hands of a tiny elite.

In the worst case, we could lose control of the AI systems themselves. Unable to govern beings with capabilities far greater than our own, we would find ourselves with as little control over our future as chimpanzees have control over theirs.

This means this issue could not only have a dramatic impact on the present generation, but also on all future generations. This makes it especially pressing from a “longtermist” perspective, a school of thinking within effective altruism which holds that improving the long-term future is a key moral priority of our time.

How to ensure AI systems continue to further human values, even as they become equal (or superior) to humans in their capabilities, is called the AI alignment problem, and solving it requires advances in computer science.

Despite its potentially historical importance, only a couple of hundred researchers work on this problem, compared to tens of thousands working to make AI systems more powerful.

It’s hard to sum up the case for the issue in a few paragraphs, so if you’d like to explore more, we’d recommend starting here, here and here.

Some examples of what’s been done

One priority is to simply tell more people about the issue. The book Superintelligence was published in 2014, making the case for the importance of AI alignment, and became a New York Times best-seller.

Another priority is to build a research field focused on this problem. For instance, AI pioneer Stuart Russell, and others inspired by effective altruism, founded The Center for Human-Compatible AI at UC Berkeley. This research institute aims to develop a new paradigm of AI development, in which the act of furthering human values is central.

Others have helped to start teams focused on AI alignment at major AI labs such as DeepMind and OpenAI, and outline research agendas for AI alignment, in works such as Concrete Problems in AI Safety.

Ending factory farming

Why this issue?

People in effective altruism try to extend their circle of concern – not only to those living in distant countries or future generations, but also to non-human animals.

Nearly 10 billion animals live and die in factory farms in the US every year16 – often unable to physically turn around their entire lives, or castrated without anaesthetic.

Lots of people agree we shouldn’t make animals suffer needlessly, but most of this attention goes towards pet shelters. In the US, about 1,400 times more animals pass through factory farms than pet shelters.

Despite this, pet shelters receive around $5 billion per year in the US, compared to only $97 million on advocacy to end factory farming.

Some examples of what’s been done

One strategy is advocacy. The Open Wing Alliance, which received significant funding from funders inspired by effective altruism, developed a campaign to encourage large companies to commit to stop buying eggs from caged chickens. To date, they have won over 2,200 commitments, and as a result over 100 million birds have been spared from cages.

Another strategy is to create alternative proteins, which if made cheaper and tastier than factory farmed meat, could make demand disappear, ending factory farming. The Good Food Institute is working to kick-start this industry, helping to create companies like Dao Foods in China and Good Catch in the US, encouraging big business to enter the industry (including JBS, the world’s largest meat company) and securing tens of millions of dollars of government support.

Open Philanthropy was an early investor in Impossible Foods, which created the Impossible Burger – an entirely vegan burger that tastes much more like meat, and is now sold in Burger King.

Improving decision-making

Why this issue?

People who want to do good often prefer to directly tackle problems, since it’s more motivating to see the tangible effects of their actions. But what matters is that the world gets better, not that you do it with your own two hands. So people applying effective altruism often try to help indirectly, by empowering others.

One example of this is by improving decision-making. Namely: if key actors — such as politicians, private and third sector leaders, or grantmakers at funding bodies — were generally better at making decisions, society would be in a better position to deal with a whole range of future global problems, whatever they turn out to be.

So, if we can find new, neglected ways to improve the decision-making of important actors, that could be a route to having a big impact. And it seems like there are some promising solutions that could achieve this.

Some examples of what’s been done

Many global problems are exacerbated by a lack of trustworthy information. Metaculus is a forecasting technology platform that identifies important questions (such as the chance of Russia invading Ukraine), aggregates forecasts made by hundreds of forecasters, and weighs them by their past accuracy. Metaculus gave a probability of a Russian invasion of Ukraine of 47% by mid January 2022, and 80% shortly before the invasion on the 24th of February21 – a time when many pundits, journalists and experts were saying it definitely wouldn’t happen.

The Global Priorities Institute at the University of Oxford does foundational research at the intersection of philosophy and economics into how key decision-makers can identify the world’s most pressing problems. It has helped to create a new academic field of global priorities research, creating a research agenda, publishing tens of papers, and helping to inspire relevant research at Harvard, NYU, UT Austin, Yale, Princeton and elsewhere.

What values unite effective altruism?

Effective altruism isn’t defined by the projects above, and what it focuses on could easily change. What defines effective altruism are the values that underpin its search for the best ways of helping others:

Prioritization: Our intuitions about doing good don’t usually take into account the scale of the outcomes — helping 100 people often makes us feel as satisfied as helping 1000. But since some ways of doing good also achieve dramatically more than others, it’s vital to attempt to use numbers to roughly weigh how much different actions help. The goal is to find the best ways to help, rather than just working to make any difference at all.

Impartial altruism: We believe that all people count equally. Of course it’s reasonable to have special concern for one’s own family, friends and life. But, when trying to do as much good as possible, we aim to give everyone’s interests equal weight, no matter where or when they live. This means focusing on the groups who are most neglected, which usually means focusing on those who don’t have as much power to protect their own interests.

Open truthseeking: Rather than starting with a commitment to a certain cause, community or approach, it’s important to consider many different ways to help and seek to find the best ones. This means putting serious time into deliberation and reflection on one’s beliefs, being constantly open and curious for new evidence and arguments, and being ready to change one’s views quite radically.

Collaborative spirit: It’s possible to achieve more by working together, and doing this effectively requires high standards of honesty, friendliness, and a community perspective. Effective altruism is not about ‘ends justify the means’ reasoning, but rather is about being a good citizen, while ambitiously working toward a better world.

Anyone who shares these values and is trying to find better ways to help others is participating in effective altruism. This is true no matter how much time or money they want to give, or which issue they choose to focus on.

Effective altruism can be compared to the scientific method. Science is the use of evidence and reason in search of truth – even if the results are unintuitive or run counter to tradition. Effective altruism is the use of evidence and reason in search of the best ways of doing good.

The scientific method is based on simple ideas (e.g. that you should test your beliefs) but it leads to a radically different picture of the world (e.g. quantum mechanics). Likewise, effective altruism is based on simple ideas – that we should treat people equally and it’s better to help more people than fewer – but it leads to an unconventional and ever-evolving picture of doing good.

How can you take action?

People interested in effective altruism most often attempt to apply the ideas in their lives by:

  • Choosing careers that help tackle pressing problems, or by finding ways to use their existing skills to contribute to these problems, such as by using advice from 80,000 Hours.
  • Donating to carefully chosen charities, such as by using research from GiveWell or Giving What We Can.
  • Starting new organizations that help to tackle pressing problems.
  • Helping to build communities tackling pressing problems.

Source : Effective Altruism