Charts: Hong Kong GDP Outlook Lifted on China; Singapore Sees High Costs

Source : BNN Bloomberg

Chart: Russia’s Growing Trade with China

Source : BBC

Humour: News in Cartoon

Yuan Gains Pace in Internationalization

Ma Jingjing wrote . . . . . . . . .

The Chicago Mercantile Exchange (CME) Group said that it will launch options on its existing US dollar/yuan futures on April 3, which experts said reflects the growing global influence of Chinese yuan.

Experts expect the internationalization of the yuan will accelerate in 2023 thanks to China’s projected strong economic rebound and its financial sector opening-up.

“The yuan trading has become a core part of global foreign exchange trading and we’re delighted to offer these options contracts to help clients manage currency risk as China resets its economy during this period of reopening,” Paul Houston, global head of foreign exchange products for the CME Group, said in a statement on the company’s website.

The group said that relevant futures contracts will undergo regulatory review.

It marks an important step of the yuan’s internationalization, Zhou Maohua, an economist at Everbright Bank, told the Global Times. He said the exchange’s rollout of offshore yuan options will increase the currency’s global influence by enriching financial transactions overseas, while providing a new tool for global investors to hedge risks.

“Most importantly, more yuan-denominated financial products overseas will increase the use of the yuan, boosting its internationalization.

Zhou said the enhanced internationalization of the yuan will promote China’s role in international governance, help optimize China’s foreign exchanges structure, reduce the spillover effects of other central banks’ monetary policies, and provide convenience for cross-border trade and settlement.

Solid progress is made

The yuan has made marked progress in internationalization. It has become the world’s fifth-largest payment currency, third-largest currency in trade settlement and fifth-largest reserve currency.

The yuan accounts for 7 percent of all foreign exchange trades across the world, the biggest expansion in currency market share over the past three years, recent data showed.

The share of the yuan in the IMF’s Special Drawing Rights basket rose from 10.92 percent in 2016 to 12.28 percent in May 2022.

In recent years, many countries have increasingly pivoted to the yuan in bilateral trade settlement or deposit it as foreign exchange reserve. Iraq started to settle trade from China in the yuan. Iraqi imports from China were previously financed in US dollars only.

The People’s Bank of China (PBC), the central bank, has signed currency swap deals with central banks in 40 countries and regions, with a total value of more than 4 trillion yuan ($573.6 billion). Recently, the PBC signed a memorandum of cooperation with the Central Bank of Brazil to establish yuan-clearing arrangements in Brazil, expanding the yuan’s use in South America.

As part of Russia’s de-dollarization move, the Russian finance ministry said in February that it would reset the share of the euro in its National Wealth Fund starting from this year, leaving only gold, yuan and rubles, Russian media reported.

New opportunities

The 20th National Congress of the Communist Party of China stated that China will promote the internationalization of the yuan in an orderly way.

In addition, this year’s Government Work Report emphasized that China will keep the yuan’s exchange rate generally stable at an adaptive and balanced level.

Amid a sluggish global economic recovery in 2023, growth in China is expected to rise, which will increase the attractiveness of yuan-denominated assets, boost capital flows back to China and further promote the internationalization of the yuan, said Guan Tao, global chief economist at BOC International under Bank of China.

“The US Federal Reserve’s drastic interest rate hikes have led to dollar shortages in the market, which exposed the flaws of the current international monetary system. The Fed’s monetary policy could not take account of the international economic environment while also dealing with domestic economic problems,” Guan told the Global Times.

The large US interest rate hikes drew money into the US and strengthened the dollar, with both emerging markets and developed economies, including the eurozone and Japan, encountering capital outflows and local currency depreciation. The EU central bank adjusted its monetary policy partially out of consideration for the euro’s depreciation, while the Japanese central bank repeatedly intervened in the market for the yen, which may boost the multi-polar development of the international currency system, Guan said.

“Some countries have also been diversifying their foreign exchange reserves for non-economic reasons, which also provides opportunities for the yuan’s internationalization,” he said.

However, challenges persist amid global changes unseen in a century, as global industrial and supply chains are being restructured, according to experts.

Huo Yingli, a member of the Chinese People’s Political Consultative Conference and Party secretary of the China Foreign Exchange Trade System, suggested that companies be encouraged to use the yuan for the settlement of cross-border trade and investment transactions.

They should also take advantage of low-cost yuan financing and expand the use of local currencies with important trade partners such as the Association of Southeast Asian Nations.

Pan Gongsheng, deputy governor of PBC, said at a press conference on March 3 that the authorities will accelerate the institutional opening-up of the Chinese financial market and further raise the opening-up level of the country’s foreign exchange and financial markets to make it more friendly and convenient for investment and financing.

Source : Global Times

Mapped: Where Do People Retire The Earliest (And Latest) in Europe?

Source : Statista

Weaker Bones, Weakening Brain? Study Makes the Connection

Amy Norton wrote . . . . . . . . .

For some older adults, thinning bones may be a harbinger of waning memory, a new study suggests.

The study, of more than 3,600 older adults, found that those with relatively low bone density were at greater risk of being diagnosed with dementia within the next decade. The one-third of participants with the lowest bone mass at the hip faced double the risk of dementia as the third with the strongest hip bones.

Researchers said the findings — published in the journal Neurology — do not mean that thinner bones help cause dementia.

Instead, they suspect that declining bone mass is one part of the early dementia process — before problems with memory and thinking skills become apparent.

And that implies that doctors should pay attention to bone health as soon as older adults are diagnosed with dementia, said senior researcher Dr. Mohammad Arfan Ikram.

One of the main reasons that people with dementia end up in nursing homes is poor mobility and falls, noted Ikram, a professor at Erasmus University Medical Center in Rotterdam, the Netherlands.

“We know that low bone mineral density is a strong risk factor for poor mobility, and falls and fractures,” he said. “Therefore, it can be helpful in persons with early-stage dementia to also pay proper attention to their bone health — and where possible optimize it.”

The study is not the first to connect bone health to dementia risk.

“This is an association we’ve seen before. For example, osteoporosis has been linked to dementia risk,” said Heather Snyder, vice president of medical and scientific relations at the Alzheimer’s Association.

It’s not completely clear why bone and brain health are connected, according to Snyder, who was not involved in the new research. But poor nutrition and lack of physical activity could be part of the story, she said.

Both can contribute to bone loss and to cognitive decline (problems with memory and thinking that may progress to dementia). Conversely, people in cognitive decline can become less active or change their eating habits for the worse, which could affect their bone density.

Ikram agreed that inadequate nutrition and lack of physical activity could be at work. But he and his colleagues point to other possibilities, too: There’s some evidence, for example, that the abnormal “plaque” proteins that build up in the brains of people with Alzheimer’s can actually harm bone density.

Although past studies have connected bone loss to dementia, Ikram said the timing of things has not been clear: Does the bone loss appear years before dementia symptoms do?

To find out, researchers analyzed data from a long-running health study, begun in 1990. They focused on 3,651 participants who, in the early 2000s, were mostly in their 60s or 70s and underwent bone density testing. All were free of dementia at that point.

By January 2020, about 19% were newly diagnosed with dementia, mostly Alzheimer’s.

On average, the study found, people who’d had low bone density at the outset were at increased risk of developing dementia — particularly within the next 10 years.

Those who were in the bottom third for hip bone density had twice the risk of a dementia diagnosis within the next decade, compared to those in the top third.

It’s important, though, to put the risk in perspective, according to Ikram. Bone loss is extremely common with age, and most older adults with thinning bones will not develop dementia, he said.

In this study, of the nearly 1,200 older adults with the lowest hip bone density, 86 were diagnosed with dementia within 10 years.

So no one is saying that bone density should be used to screen older adults for early dementia. Instead, Ikram said, bone health should be on everyone’s radar when an older person is diagnosed with the brain disease.

At the same time, it is thought that many of the things that support overall physical health are good for the brain, too.

Snyder said that a healthy diet, exercise, and staying mentally and socially engaged “are all things we can do today to maximize our brain health.”

She noted that the Alzheimer’s Association is running a clinical trial that is testing whether those lifestyle measures can help preserve brain function in older adults who are at increased risk of cognitive decline.

Source: HealthDay

China and Russia: Explaining a Long, Complicated Friendship

Huizhong Wu wrote . . . . . . . . .

Chinese leader Xi Jinping just concluded a three-day visit with Russian President Vladimir Putin, a warm affair in which the two men praised each other and spoke of a profound friendship. It’s a high point in a complicated, centuries-long relationship during which the two countries have been both allies and enemies.

Chinese and Russian states have loomed large in each other’s foreign affairs since the 17th century, when two empires created a border with a treaty written in Latin.

Neighbors can be good friends, or bitter rivals. Sharing a border of thousands of miles, Beijing and Moscow have been both.

“China and Russia relations have always been uneasy,” said Susan Thornton, a former diplomat and a senior fellow at the Paul Tsai China Center at Yale Law School.

“THE SOVIET UNION’S TODAY IS OUR TOMORROW”

The People’s Republic of China was founded in 1949, following a brutal Japanese occupation during World War II and a bloody civil war between the Nationalist and Communist Parties.

Russia was part of the Soviet Union, a global superpower, while China was poor, devastated by war and unrecognized by most governments. Communist leader Mao Zedong was junior to Josef Stalin, who led the Soviet Union until his death in 1953.

The early People’s Republic depended on the Soviet Union for economic aid and expertise. In 1953, the slogan that appeared in Chinese newspapers was “The Soviet Union’s today is our tomorrow.” The Soviets sent some 11,000 experts in 1954-58 to help China rebuild after its civil war, according to Joseph Torigian, an associate professor at American University’s School of International Service.

The two countries also had a formal military alliance, but Moscow decided against giving China the technology for nuclear arms.

SINO-SOVIET SPLIT

But there were points of friction, especially after the death of Stalin.

In 1956, then-Soviet Premier Nikita Khrushchev condemned Stalin’s “cult of personality” in an address to Communist Party members later known as the “secret speech.” Mao, who had modeled himself on the former Soviet leader, took it personally.

When Mao decided to shell two outlying islands of Taiwan held by the Nationalist Party he had defeated in the Chinese civil war, he did not warn Khrushchev. Khrushchev saw it as a betrayal of the alliance, Torigian said. In 1959, the Soviet Union remained neutral during a border conflict between China and India, which led China to feel that it was not getting enough support from its ally.

The relationship soured until the two countries broke off their alliance in 1961 in the Sino-Soviet Split.

They quickly became open rivals. Beijing blasted Moscow for “phony communism” and revisionism, or straying from the Marxist path. Soldiers clashed along their borders in China’s northeast and the western region of Xinjiang.

US-CHINA-RUSSIA TRIANGLE

The Sino-Soviet Split left Beijing isolated, but set the stage for outreach to the United States. In 1972, the revolutionary communist state welcomed President Richard Nixon for a visit that paved the way for global recognition of Mao’s government and for the U.S. and China to enter into a tacit alignment against Moscow.

The 1990s led to a rapprochement between China and Russia after the collapse of the Soviet Union. The two countries formally settled their border disputes.

In the years since, the world has changed greatly, as have the fortunes of the two countries. China is now the world’s second-largest economy, while Russia’s economy was stagnating long before its invasion of Ukraine last year. Today, it is China facing the U.S. in a strategic competition fueled by intense nationalism on both sides.

Once again, Moscow and Beijing are finding common ground. Under Xi Jinping, “repairing the damage and cultivating the relationship has gone much faster than it has ever before,” Thornton, the former diplomat, said.

LEADERS SEE EYE TO EYE

Meanwhile, the similarities between the two leaders, as well as their personal relationship, has helped ties grow.

Both Xi and Vladimir Putin see Western attempts to spread democracy as an attempt to de-legitimize themselves, and they believe that authoritarian regimes are better for confronting the challenges of the modern world. Russia supplies energy and China exports manufactured goods to Russia.

And while some analysts and commentators have started saying that China is now the senior partner in the relationship, given the history, it’s not necessarily how that’s viewed in China.

Russia’s hold over China is not only historical, but also cultural. Students read translated Russian stories and poems in their literature classes, while many educated Chinese of an older generation learned Russian instead of English.

“Many Chinese people, including elites, have not yet realized the historic reversal of China’s comprehensive national strength compared to Russia,” wrote Feng Yujun, a prominent Russia scholar at Shanghai’s Fudan University, in an article published last month that was shared widely. Feng declined to be interviewed.

“Although China’s national strength is now ten times that of Russia, the biggest challenge is that many Chinese people are still subservient to Russia ideologically,” he wrote.

Source : AP