Register

Peak Oil is You


Donate Bitcoins ;-) or Paypal :-)


Page added on December 31, 2018

Bookmark and Share

China taking on U.S. dollar, forging ahead in digital payment

China taking on U.S. dollar, forging ahead in digital payment thumbnail

 

While China has made major strides in catching up with the United States in terms of economic power, it still lags far behind in finance.

In various ways, the dollar still reigns supreme over the yuan. However, that is not stopping China from carving out new sectors of influence in digital technology and artificial intelligence.

The fact that China has made developments in the digital field as well as AI opens up the possibility that it can establish its own China standard in the financial world in a matter of a few years.

CHALLENGING DOLLAR DOMINANCE

China became the world’s leading importer of petroleum in 2017, leapfrogging the United States. But government officials are still frustrated that the U.S. dollar determines to a large extent the price of crude oil.

To get around that problem, the Shanghai Futures Exchange in March 2018 began a pioneering effort to deal in crude oil futures denominated in yuan.

The move was an attempt to chip away at the huge influence on crude futures played by the exchanges in New York and London.

The effort to take the initiative in setting crude prices was explained by Jiang Yang, the former vice chair of the China Securities Regulatory Commission, who said, “(Westerners) are determining (the price) of our petroleum.”

Allowing for crude payments in yuan would move China toward that goal. Since its start, trading volume on the Shanghai Futures Exchange for crude oil has been increasing.

However, the path is still a long one for the yuan since it is only used in 1.3 percent of all trade in the world, while the dollar dominates with a usage ratio of 42.8 percent.

In addition to the futures exchange, China is also making other moves to get around the United States.

A major focus has been the economic sanctions imposed by the Trump administration on Iran. Despite the resistance put up in Iran as well as the concerns raised in the global community, the United States in November slapped sanctions on petroleum exports, which account for about 60 percent of Iran’s revenues. Those sanctions extended to all companies that had business dealings with Iran and threatened to shut out foreign companies from the U.S. financial market, meaning isolation in the global economy.

While Japan and Western nations began rethinking their approach to Iran, China actually moved closer to Iran, in part because it is the largest importer of petroleum from Iran.

After the United States implemented the sanctions, a Chinese Foreign Ministry spokesperson defended Iran and said, “We oppose any unilateral sanctions.”

An Iranian government source said, “If we use the yuan, we can settle our trading without going through the U.S. financial system.”

Ali Haji, a former Iranian ambassador to China, told a Chinese newspaper that some payments for Iranian petroleum had been received in yuan and that the amount would likely increase in the future.

The U.S. pressure also applies to Chinese banks, but as one Iranian government source said, “China has so many financial institutions that the United States cannot keep tabs on all of them. All we have to do is utilize those institutions.”

While the scale may still be small, the yuan is increasingly becoming an alternative for serving as a loophole around U.S. sanctions.

CHINA EYING DIGITAL TECHNOLOGY

China is also making efforts to change the relationship between money and society through digital technology.

At a November conference in Singapore on fintech, the marriage of finance with information technology, Christine Lagarde, the managing director of the International Monetary Fund (IMF), said, “Money itself is changing.”

Pointing to the advances of digitalization, she asked, “What role will remain for cash in this digital world? In 30 years, who will still be exchanging pieces of paper?”

As one example of what Lagarde described as “a new wind” changing the nature of currency, she listed Alipay, the smartphone payment system developed by the Alibaba Group of China.

Jack Ma, who heads Alibaba, was in Bali in October to participate in a discussion with Jim Yong Kim, the World Bank president, in the annual meeting jointly sponsored by the IMF and World Bank.

Ma stressed that while credit cards were created mainly for the affluent, smartphone payment systems, such as Alipay, can be used by anyone.

The simplicity of the Alipay system has created an almost cashless society in China seemingly overnight. All consumers have to do is run a product’s bar code through their smartphones to have the amount paid to the retail outlet from their bank accounts.

But such payment systems also hold other potential because they accumulate Big Data about an individual’s buying habits, movements and friends. Such systems mean, according to Lagarde, that “data is the ‘new gold.’ ”

There is already a tug of war over who will gain the upper hand in collecting and using such Big Data. While the GAFA group of U.S. companies made up of Google, Apple, Facebook and Amazon is playing a leading role, concerns are also being raised in the United States over whether an iron-fisted nation such as China should be allowed to collect individual data on such a global scale.

In his discussion with Kim, Ma said that he was hated by both Europe and the United States and complained that they only talked about restrictions.

Perhaps realizing he will not likely get very far in the West, Ma has personally visited some of the newly emerging economies, such as Indonesia, Thailand, Singapore and India, to generate interest in the projects of his group.

According to several research companies, about 30 percent of the world’s population, or between 2.5 billion and 3 billion, use smartphones. Those individuals are potential customers of online payment systems, even if they may never possess credit cards.

African nations are also showing an interest because such systems allow for tax collections from a large section of the population.

The World Bank has said that developing nations would serve as the game changer in how such systems eventually play out.

CHINA’S HUGE CRYPTOCURRENCY PRESENCE

While smartphone payment systems still go through the traditional financial systems, the world of cryptocurrencies may hold the potential of fundamentally altering the currency system supported by nation-states.

And in that world, China clearly already has a dominating presence.

In September 2015, a conference was held in Hong Kong related to Bitcoin.

Eight people were called to the stage and introduced as representing about 90 percent of the global ability to “mine” Bitcoin. Mining is the jargon for using computers to add transaction data that becomes what is known as the blockchain, the ledger for past transactions that have been verified by the miners. Miners earn Bitcoins as their reward for the often complex and painstaking work involved.

The eight individuals were all leaders of their own mining groups and five were Chinese. That number was a surprise to many in the cryptocurrency world because it is believed theoretically that any group that controls a majority of mining ability has the potential to be aware of all transactions and monopolize the hold on Bitcoins.

Concerns were raised that China would soon be in control of the cryptocurrency world.

Bitcoin was born in 2009 as a transaction system that would not be interfered with by nations. After the 2013 financial crisis in Cyprus, Bitcoin became more widely known as a way to move one’s assets.

Chinese businesses were quick to latch onto the potential of cryptocurrencies, and they set up mining companies in inland areas of the nation where electricity costs were cheaper.

The future of cryptocurrencies appeared bleak when the Chinese government closed exchanges in the nation in September 2017 due to concerns the cryptocurrencies would lead to excessive speculation and the flow of funds out of the nation.

But the Chinese government did not go so far as to do away with the blockchain technology that serves as the core of cryptocurrencies.

The People’s Bank of China in October began recruiting staff for a research institute it set up to look into digital currency. While there is still much not known about what the institute will do, its head, Yao Qian, said, “Steady progress is being made in search of a legal digital currency.”

That leads to conjecture that the institute is striving to bring about a digital yuan.

Asahi



26 Comments on "China taking on U.S. dollar, forging ahead in digital payment"

  1. Chrome Mags on Mon, 31st Dec 2018 9:46 pm 

    If I Yuan anymore I’m going to fall asleep.

  2. JuanP on Tue, 1st Jan 2019 10:24 am 

    China’s population has peaked in 2017 and begun to decline in 2018! My congratulations to the Chinese goverment and people on such a momentous achievement. Go china! Long live China! Long live Xi!

    http://www.globaltimes.cn/content/1134258.shtml

  3. Davy on Tue, 1st Jan 2019 4:18 pm 

    “Chinese Admiral Wants To “Sink Two US Aircraft Carriers” Over South China Sea”
    https://tinyurl.com/y8dqyuxj

    “Rear Admiral Lou Yuan told an audience in Shenzhen that the simmering dispute over the East and South China Seas could be decisively ended by sinking two US aircraft carriers.”

    “During the Dec. 20 speech to the 2018 Military Industry List summit, Lou declared that China’s anti-ship ballistic and cruise missiles were capable of hitting US carriers, even when they were in the middle of a “bubble” of defensive escorts.”

    “Lou also explained what he described as the US’s five vulnerabilities, and insisted that China must not hesitate to strike back at any of them should a US fleet even dare to stop in Taiwan.”

    “In his speech, he said there were ‘five cornerstones of the United States’ open to exploitation: their military, their money, their talent, their voting system — and their fear of adversaries.”

    “”What the United States fears the most is taking casualties,” Admiral Lou declared.”

    “He said the loss of one super carrier would cost the US the lives of 5000 service men and women. Sinking two would double that toll.”

    “We’ll see how frightened America is.”

  4. Uncle Bill on Wed, 2nd Jan 2019 3:21 am 

    Sounds like Chairman Mao wants to have a priniting press like Uncle Sam and the Fed own….good luck with that!
    Uncle doesn’t like to share
    His boy Trumpet will give the Chairman a bloody nose

  5. Not me on Wed, 2nd Jan 2019 4:31 am 

    Davy on Tue, 1st Jan 2019 4:18 pm “Chinese Admiral Wants To “Sink Two US Aircraft Carriers” Over South China Sea”
    https://tinyurl.com/y8dqyuxj

  6. Cloggie on Wed, 2nd Jan 2019 4:49 am 

    China threatens Taiwan with forced reunification:

    http://www.spiegel.de/politik/ausland/chinas-praesident-xi-droht-taiwan-mit-gewaltsamer-wiedervereinigung-a-1246070.html

    “Chinese Admiral Wants To “Sink Two US Aircraft Carriers” Over South China Sea”

    China is beginning to flex its muscles and probably will declare the South China Sea as an Anglo-navy-free zone. They can that with their hyper-sonic missiles.

    Conclusions:

    – makati, don’t see this as a put-down, I have zero ill-will against you and hope you get very old in good health. But you have chosen the worst imaginable location for an American to be in. If the Chinese-UK stand-off occurs. This is how Americans can look like when they are no longer in charge:

    http://www.lchs.museum/ww2/images/pow_manila-pows.jpg
    (US POWs after Japanese invasion Philippines).

    – Note to Australians/New Zeelanders: your situation is very precarious, the worst thing you can do now is buying a new house. Do what Malcolm Fraser advised:

    https://deepresource.wordpress.com/2015/01/02/america-australias-dangerous-ally/

    Distance yourself completely from the US and declare post-Brexit UK to be your new overlord, certainly if the UK is wise enough to accept the Barnier-Raab deal, which will enable them to remain neutral. They have nukes and could defend Australia against an advancing Chinese Red army towards the South. For those who can afford it, make plans to relocate to Britain.

    “”What the United States fears the most is taking casualties,” Admiral Lou declared.”

    Absolutely correct. 40,000 max. The archetype of the American is a travelling salesman, not a warrior.

    Once the casualty numbers from the South China Sea and Philippines come in, it could provide the final impetus for CW2:

    https://documents1940.wordpress.com/2019/01/02/the-coming-civil-war/

    I can even imagine that what is happening now is the result of a secret agreement between Xi and Trump, Trump setting up America for an intentional loss in order to initiate the breakup the US:

    https://www.youtube.com/watch?v=HH0AvaG3SqQ

    If Trump is what I think he is, a closet white nationalist, it would be the only rational thing to do in order to save European America.

  7. makati1 on Wed, 2nd Jan 2019 5:51 am 

    Cloggie, I have chosen one of the most safe places on the planet. You are the one who is denying the activities in your own neighborhood. The revolts, debt economy and religious/immigration problems are just starting in the EU, not to mention that the US is trying to get you to go to war with Russia. Yep! You are safe! Good luck! LMAO.

    As for your assertions using past events, they are no more prophetic than the oily numbers that change hourly. China already owns much of the Philippines, but you would not know that. China is partnering with the Philippines more and more and replacing the US. Russia is also now a partner of the Ps. The US is being pushed out. Duterte still has 3 1/2 years to go, and is looking out for the Filipino’s welfare not ass kissing the US like the previous P’s presidents.

    There will be no fighting here. If the US is foolish enough to try, it will lose in the first 24 hours. No US Navy ship will enter or leave the SCS. The Chinese can keep the Us at least 1,000 miles from Chinese shores and that is 400 miles on the Eastern side of the Philippines. Also, Guam is in range of the Chinese missiles. No base there either.

    BTW: Did you forget that the Chinese hold over a trillion in USTs? THAT is a nuclear weapon they can use if necessary and the US is financial toast. The US knows it. A lot of hot air from the idiots in DC, nothing more.

  8. JuanP on Wed, 2nd Jan 2019 8:59 am 

    I am so impressed that the Chinese have stopped their population growth! I consider all societies with decreasing populations to be more advanced, civilized, developed, intelligent, educated, and evolved than societies with growing populations. This is an indisputable sign of how far China has come and how fast it is improving. I read Chinese news every single day, and the amount of good news in China is overwhelming. They take millions of steps in the right direction on a daily basis. The most astounding factor is how the Chinese goverment seems to be completely grounded in the real world instead of living in denial like the Americans. Who do you think is most likely to win in a fight between a people grounded in reality and a people living in denial? If you are an American realist you are preparing for the USA losing this fight. There is no way that the USA can win this one. The best course for the USA is military retreat. The way things are going the USA will crash with no friends left as the most hated nation in human history.

  9. Davy on Wed, 2nd Jan 2019 11:39 am 

    “I am so impressed that the Chinese have stopped their population growth!
    Yea, dirty juan, now that they have almost 1.4BIL and consuming much of the worlds resources yea I would figure your extremist bias would be impressed. I didn’t see a China, china, china chant but I got the dumb drift of a small mind.
    “I consider all societies with decreasing populations to be more advanced, civilized, developed, intelligent, educated, and evolved than societies with growing populations.”
    LOL, another smallish mind fart of an empty generalization. Just because a societies population is decreasing has no direct bearing on advanced, civilized, developed, intelligent, educated, and evolved and growing populations not. More low IQ GED thinking.

    “This is an indisputable sign of how far China has come and how fast it is improving. I read Chinese news every single day, and the amount of good news in China is overwhelming.”
    No shit Sherlock China does not allow critical news so an extremist with a blind obsession of anti-Americanism is going to love all that positive Chinese news. More lame low IQ GED thinking. BTW, please get the fuck out of the US and move to China.

    “The most astounding factor is how the Chinese government seems to be completely grounded in the real world instead of living in denial like the Americans.”
    Hardly, the Chinese are pumping up the credit and malinvesting in a huge way but sure for a low IQ GED playboy extremist anti-American I can understand your thinking.

    “If you are an American realist you are preparing for the USA losing this fight.”
    What fight stupid? Can you elaborate with something besides open puking generalizations?

    “There is no way that the USA can win this one.”
    Win what stupid?? The race to destroy the planet?

    “The best course for the USA is military retreat.”
    What kind of retreat armchair general?

    “The way things are going the USA will crash with no friends left as the most hated nation in human history.”
    Sure, dirty juan then why do so many people rich and poor come here including Chinese and Russians. You have to be the stupidest person on this forum. See dirty juan what happens when you make a small stab at a legitimate comment, you just got your ass moderated and neutered. Woo what a loser.

  10. Davy on Wed, 2nd Jan 2019 11:48 am 

    Oops. Sorry for losing my shit again everyone. That always happens when I get my widdle ass kicked. I’m not sure why? Maybe one of the good doctors can help me figure it all out? IDK?

  11. Davy on Wed, 2nd Jan 2019 11:54 am 

    LOL, dirty juan, all you got to offer for your neutering is a little identity theft?

  12. JuanP on Wed, 2nd Jan 2019 12:04 pm 

    Pretending to neuter someone who has already had a vasectomy is a bit redundant, don’t ya’ll think Davy?

  13. makati1 identity theft on Wed, 2nd Jan 2019 12:06 pm 

    JuanP on Wed, 2nd Jan 2019 12:04 pm
    Pretending to neuter someone who has already had a vasectomy is a bit redundant, don’t ya’ll think Davy?

  14. JuanP on Wed, 2nd Jan 2019 12:21 pm 

    Well what can I do when I have so many personality issues. Here are just a few:

    JuanP on Thu, 30th Jun 2016 4:56 pm
    I think I could use my antisocial, psychopathic, sociopathic skills to convince people to vote for Trump. I can be very convincing when I want and I am excellent at manipulating people.
    JuanP on Sun, 30th Aug 2015 5:40 am
    …then you simply have a higher opinion of humans than I do. But what can I do? I am after all an admitted antisocial misanthrope. I just think most people suck!
    JuanP on Fri, 12th Aug 2016 10:58 am
    I stopped caring about humanity’s future a long time ago once I realized it was a waste of my time and energy. Now I think that it would be best for life on Earth if we ceased to exist as a species.
    JuanP on Wed, 14th Sep 2016 9:59 pm
    I struggle with the fact that I belong to the same species; I find myself emotionally and intellectually incapable of accepting the fact. That is why I consider myself a sui generis individual rather than a human animal.
    JuanP on Sun, 26th Jun 2016 12:22 am
    As far as I am concerned human beings are a bunch of arrogant and retarded ignorant fools and they deserve what’s coming. Call me selfish if you want, I don’t give a fuck!
    JuanP on Fri, 15th May 2015 11:21 am
    I did therapy for over a decade and most of it was a waste, but I had one therapist for a year who understood my issues and that helped, though I am still thoroughly screwed up.
    JuanP on Tue, 22nd Dec 2015 6:57 am
    They make me smile and happy and give me a brief respite from my cronic and acute depression.
    JuanP on Sun, 17th Aug 2014 8:19 pm
    I have suffered from cronic and acute clinical depression for most of my life, but I wouldn’t have it any other way.
    JuanP on Mon, 23rd May 2016 8:53 am
    I was just telling my wife yesterday that I would very willingly give my arms, legs, tongue, eyes, ears, nuts, and dick to experience life like normal people do for just one hour to know what it feels like. I have been a seriously depressed realist since I have a memory. My first memory of my life is of leaning against a tree alone in my kindergarten’s playground looking at all the other kids playing, thinking how stupid their behavior was, and wondering why I wasn’t like them. I basically don’t interact with normal people anymore. They have nothing to offer me and I don’t want to give them anything.

  15. More Davy Identity Theft on Wed, 2nd Jan 2019 12:55 pm 

    JuanP on Wed, 2nd Jan 2019 12:21 pm

  16. More Davy Sock Puppetry on Wed, 2nd Jan 2019 12:56 pm 

    makati1 identity theft on Wed, 2nd Jan 2019 12:06 pm

  17. JuanP identity theft on Wed, 2nd Jan 2019 1:09 pm 

    More Davy Sock Puppetry on Wed, 2nd Jan 2019 12:56 pm

  18. more juanp sock puppeteering on Wed, 2nd Jan 2019 1:09 pm 

    More Davy Sock Puppetry on Wed, 2nd Jan 2019 12:56 pm

  19. JuanP identity theft on Wed, 2nd Jan 2019 1:11 pm 

    More Davy Identity Theft on Wed, 2nd Jan 2019 12:55 pm

  20. makati1 on Wed, 2nd Jan 2019 1:12 pm 

    JuanP you are like an ignorant chaild who can’t stop whining. Get a life and grow up

  21. More Davy Sock Puppetry on Wed, 2nd Jan 2019 1:18 pm 

    more juanp sock puppeteering on Wed, 2nd Jan 2019 1:09 pm
    JuanP identity theft on Wed, 2nd Jan 2019 1:11 pm

  22. More Davy Identity Theft on Wed, 2nd Jan 2019 1:19 pm 

    makati1 on Wed, 2nd Jan 2019 1:12 pm

  23. Gregt identity theft on Wed, 2nd Jan 2019 1:26 pm 

    More Davy Identity Theft on Wed, 2nd Jan 2019 1:19 pm

  24. more JuanP sock puppeteering on Wed, 2nd Jan 2019 1:27 pm 

    More Davy Sock Puppetry on Wed, 2nd Jan 2019 1:18 pm

  25. More Davy Sock Puppetry on Wed, 2nd Jan 2019 2:10 pm 

    Gregt identity theft on Wed, 2nd Jan 2019 1:26 pm

  26. More Davy Sock Puppetry on Wed, 2nd Jan 2019 2:10 pm 

    more JuanP sock puppeteering on Wed, 2nd Jan 2019 1:27 pm

Leave a Reply

Your email address will not be published. Required fields are marked *