HONG KONG

Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong
Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong, China May 26, 2019. REUTERS/James Pomfret

May 26, 2019

By James Pomfret

HONG KONG (Reuters) – Thousands of protesters marched through central Hong Kong on Sunday as part of annual demonstrations demanding that China be held accountable for its democracy crackdown in and around Tiananmen Square three decades ago.

Human rights groups and witnesses say that hundreds, perhaps thousands, died in the bloodshed as Chinese tanks rolled into Tiananmen Square and soldiers fired on student-led democracy protesters, beginning on the night of June 3, 1989.

The Tiananmen crackdown is a taboo subject in China and authorities have refused to accept full accountability or release the death toll.

This year, for the 30th anniversary, censors at Chinese internet companies say that tools to detect and block content related to the 1989 crackdown have reached unprecedented levels of accuracy, aided by machine learning and voice and image recognition.

Hong Kong and Macau are the only places on Chinese soil where the event is commemorated each year, while the democratic island of Taiwan also holds public gatherings for the victims.

The Hong Kong demonstrators marched to China’s main representative “liaison” office in the city, where some held up banners while chanting slogans including “the people will not forget”.

Many of the protesters also held up yellow umbrellas, a symbol of Hong Kong’s 2014 pro-democracy “umbrella revolution”, while calling for the scrapping of a proposed extradition law that would allow people to be sent to China to face trial.

Lawyers, business people and diplomats have expressed widespread concern that the law could extend China’s control into Hong Kong and undermine the city’s vaunted rule of law.

The umbrellas carried the words “Support freedom. Oppose evil law”.

“The Hong Kong people have not forgotten the event of 30 years ago,” said lawmaker Wu Chi-wai, who heads the city’s main opposition Democratic Party.

“The (Chinese) Communist Party tries to erase those memories. But the Hong Kong people have kept it up and are looking for the day when the dictatorship on the mainland will end.”

Some in the crowds were also from mainland China. Among them was Chen Shen, who said he had watched a documentary on the crackdown and later shared it widely with friends using a virtual private network (VPN) to circumvent Chinese censors.

“I felt angry and sad,” he said during the march. “I think Chinese people have the right to know the truth.”

Police estimated that 2,100 people took part in Sunday’s march. An annual candlelight vigil in Victoria Park on June 4 is expected to draw tens of thousands of people.

(Reporting by James Pomfret; Editing by David Goodman)

Source: OANN

Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong
Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong, China May 26, 2019. REUTERS/James Pomfret

May 26, 2019

By James Pomfret

HONG KONG (Reuters) – Thousands of protesters marched through central Hong Kong on Sunday as part of annual demonstrations demanding that China be held accountable for its democracy crackdown in and around Tiananmen Square three decades ago.

Human rights groups and witnesses say that hundreds, perhaps thousands, died in the bloodshed as Chinese tanks rolled into Tiananmen Square and soldiers fired on student-led democracy protesters, beginning on the night of June 3, 1989.

The Tiananmen crackdown is a taboo subject in China and authorities have refused to accept full accountability or release the death toll.

This year, for the 30th anniversary, censors at Chinese internet companies say that tools to detect and block content related to the 1989 crackdown have reached unprecedented levels of accuracy, aided by machine learning and voice and image recognition.

Hong Kong and Macau are the only places on Chinese soil where the event is commemorated each year, while the democratic island of Taiwan also holds public gatherings for the victims.

The Hong Kong demonstrators marched to China’s main representative “liaison” office in the city, where some held up banners while chanting slogans including “the people will not forget”.

Many of the protesters also held up yellow umbrellas, a symbol of Hong Kong’s 2014 pro-democracy “umbrella revolution”, while calling for the scrapping of a proposed extradition law that would allow people to be sent to China to face trial.

Lawyers, business people and diplomats have expressed widespread concern that the law could extend China’s control into Hong Kong and undermine the city’s vaunted rule of law.

The umbrellas carried the words “Support freedom. Oppose evil law”.

“The Hong Kong people have not forgotten the event of 30 years ago,” said lawmaker Wu Chi-wai, who heads the city’s main opposition Democratic Party.

“The (Chinese) Communist Party tries to erase those memories. But the Hong Kong people have kept it up and are looking for the day when the dictatorship on the mainland will end.”

Some in the crowds were also from mainland China. Among them was Chen Shen, who said he had watched a documentary on the crackdown and later shared it widely with friends using a virtual private network (VPN) to circumvent Chinese censors.

“I felt angry and sad,” he said during the march. “I think Chinese people have the right to know the truth.”

Police estimated that 2,100 people took part in Sunday’s march. An annual candlelight vigil in Victoria Park on June 4 is expected to draw tens of thousands of people.

(Reporting by James Pomfret; Editing by David Goodman)

Source: OANN

Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong
Protesters take part in a march ahead of June 4 anniversary of military crackdown on pro-democracy protesters in Tiananmen Square, in Hong Kong, China May 26, 2019. REUTERS/James Pomfret

May 26, 2019

By James Pomfret

HONG KONG (Reuters) – Thousands of protesters marched through central Hong Kong on Sunday as part of annual demonstrations demanding that China be held accountable for its democracy crackdown in and around Tiananmen Square three decades ago.

Human rights groups and witnesses say that hundreds, perhaps thousands, died in the bloodshed as Chinese tanks rolled into Tiananmen Square and soldiers fired on student-led democracy protesters, beginning on the night of June 3, 1989.

The Tiananmen crackdown is a taboo subject in China and authorities have refused to accept full accountability or release the death toll.

This year, for the 30th anniversary, censors at Chinese internet companies say that tools to detect and block content related to the 1989 crackdown have reached unprecedented levels of accuracy, aided by machine learning and voice and image recognition.

Hong Kong and Macau are the only places on Chinese soil where the event is commemorated each year, while the democratic island of Taiwan also holds public gatherings for the victims.

The Hong Kong demonstrators marched to China’s main representative “liaison” office in the city, where some held up banners while chanting slogans including “the people will not forget”.

Many of the protesters also held up yellow umbrellas, a symbol of Hong Kong’s 2014 pro-democracy “umbrella revolution”, while calling for the scrapping of a proposed extradition law that would allow people to be sent to China to face trial.

Lawyers, business people and diplomats have expressed widespread concern that the law could extend China’s control into Hong Kong and undermine the city’s vaunted rule of law.

The umbrellas carried the words “Support freedom. Oppose evil law”.

“The Hong Kong people have not forgotten the event of 30 years ago,” said lawmaker Wu Chi-wai, who heads the city’s main opposition Democratic Party.

“The (Chinese) Communist Party tries to erase those memories. But the Hong Kong people have kept it up and are looking for the day when the dictatorship on the mainland will end.”

Some in the crowds were also from mainland China. Among them was Chen Shen, who said he had watched a documentary on the crackdown and later shared it widely with friends using a virtual private network (VPN) to circumvent Chinese censors.

“I felt angry and sad,” he said during the march. “I think Chinese people have the right to know the truth.”

Police estimated that 2,100 people took part in Sunday’s march. An annual candlelight vigil in Victoria Park on June 4 is expected to draw tens of thousands of people.

(Reporting by James Pomfret; Editing by David Goodman)

Source: OANN

A leader of localist group Hong Kong Indigenous Ray Wong leaves a court in Hong Kong
Ray Wong, one of the leaders of localist group Hong Kong Indigenous, leaves a court in Hong Kong, China, September 23, 2016, with nine other defendants after pleading not quilty on charges relating to Mongkok riots during Lunar New Year. REUTERS/Bobby Yip

May 25, 2019

BEIJING (Reuters) – China has made “solemn representations” to Germany after it granted refugee status to two Hong Kong activists facing rioting charges in the Chinese-ruled city, demanding it correct its “mistakes”, state news agency Xinhua reported on Saturday.

Xinhua said the Hong Kong office of China’s foreign ministry summoned Germany’s Acting Consul General to Hong Kong David Schmidt for an emergency meeting on Friday, where a representative expressed “strong dissatisfaction and resolute opposition”.

The two Hong Kong activists – Ray Wong, 25, and Alan Li, 27 – were former members of Hong Kong Indigenous, a group advocating Hong Kong’s independence from China. They were charged for rioting linked to a protest that turned violent in February 2016.

The pair, who later skipped bail and fled to Germany in 2017 via Taiwan, told Reuters this week they were granted refugee asylum status in Germany in May 2018.

“(China) urges the German side to recognize its mistakes and change its course, and not to accept and condone criminals, and interfere in Hong Kong affairs and China’s internal affairs,” Xinhua said.

The German consulate said this week it was aware that the two Hong Kong residents were staying in Germany, although it could not provide details on individual cases.

Hong Kong activists have become increasingly defiant in recent years, concerned about creeping interference from Beijing despite a promise of special autonomy for the city, which returned to Chinese rule in 1997.

Scores of activists have been jailed on various charges including contempt of court and public nuisance. Critics said Hong Kong authorities have brought such charges to stifle freedom of expression and assembly.

Hong Kong’s Chief Executive Carrie Lam has also expressed “deep regrets and strong objections” to the German authorities.

Hong Kong authorities deny persecuting activists.

(Reporting by Yawen Chen and Ben Blanchard; Editing by Frances Kerry)

Source: OANN

It’s only 9 am in New York but Friday’s session has already featured a frantic flurry of trade-war-related headlines that have – at least in the market’s view – overshadowed Theresa May’s tearful announcement that she will be stepping down as PM.

Beijing repudiated President Trump’s Thursday claim about a ‘speedy’ trade deal, saying there were no plans for a Trump-Xi meeting. US stock futures pared gains on that headline. Also, US firms ratcheted up the pressure on Huawei, with Microsoft joining the contingent of chip and tech companies that is planning to cut ties with Huawei over Washington’s blacklisting.

And now, the South China Morning Post is reporting that China’s largest chipmaker is withdrawing its ADRs from the New York Stock Exchange, and will subsequently trade only in Hong Kong. The company said ‘low trading volumes’ and the ‘cost of maintaining the listing’ motivated its decision.

China’s biggest maker of semiconductors is to withdraw from the New York Stock Exchange as the increasingly ferocious trade war with the US spills over into the technology sector.

Semiconductor Manufacturing International Corp (SMIC) said on Friday evening it has notified NYSE of its intention to apply on June 3 to delist its so-called American depositary receipts from the bourse. In a filing to the Hong Kong stock exchange, where its shares are listed, SMIC cited low trading volumes of its ADRs and the costs of maintaining the listing and complying with reporting requirements and related laws.

The delisting is expected to happen after June 13, and trading of the chip maker’s US securities will shift to the over-the-counter market, the statement said.

The sudden move comes as Washington steps up efforts to cut off its technology from China, with trade negotiations between the world’s two largest economies still deadlocked.

Just a few days ago, Steve Bannon told the SCMP that he would like to see Chinese companies shut out from American capital markets. It appears Beijing is doing him one better.

Meanwhile, a growing number of sell-side strategists now see a protracted trade war as the ‘base-case’ scenario. The latest assessment from Rabobank concluded that it’s extremely unlikely that either side will offer an olive branch in the near future: “That ship has sailed.”

China is battening down the hatches for a “Long March” and doesn’t even want to talk to the US. In fact, Xi and Trump might not even meet at the end of June in Osaka, in which case there is no obvious off-ramp.

Hovering in the background is Steve Bannon’s ‘superhawkishness’. President Trump has already accomplished something incredible: He’s united a disparate group of business leaders and politicians from both parties behind his hard-line approach. This might give him the cover he needs to ignore the market, at least until things start getting really bad.

In the meantime, expect more Chinese companies will demonstrate their ‘independence’ from American markets.

A Canadian court has tried to stop Alex Jones from focusing on a trans child case which has quickly turned into a free speech battle.

Source: InfoWars

FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai
FILE PHOTO: An investor looks at an electronic board showing stock information at a brokerage house in Shanghai, China July 6, 2018. REUTERS/Aly Song/File Photo

May 24, 2019

(Reuters) – 1/THE MONTH OF MAY

Theresa May stepped into 10 Downing Street in July 2016 with the express aim of taking Britain out of the European Union. She will depart as prime minister this summer having failed in that ambition. No one can say she didn’t try — after three attempts to get her EU withdrawal bill through parliament, she finally had to admit it was dead in the water.

Speculation about her departure has been rife all month. Now it’s wait and see if her successor will fare any better with the withdrawal deal, or if he or she steers Britain towards a no-deal Brexit. What’s clear is that risks of crashing out of the EU without a transition period have risen, given the eurosceptic Boris Johnson is favorite to succeed May. The other risk is a new election, and possibly, a hung parliament. That means sterling could suffer more losses; it has fallen almost 3% this month against the dollar and euro.

May will remain in charge as the Conservatives elect a new leader. Her last task as prime minister — welcoming U.S. President Donald Trump to Britain — will hopefully be easier than trying to deliver Brexit.

Trade-weighted sterling interactive http://tmsnrt.rs/2hwV9Hv

Graphic on Brexit and sterling: https://tmsnrt.rs/2WW8QBb

2/GAME OF PHONES

The Sino-U.S. trade war has morphed from a tariff spat into a battle over who controls global tech. Washington has banned U.S. firms from doing business with Chinese telecommunications giant Huawei. Essentially that cripples the company’s ability to make new chips for its future smartphones.

As chipmakers and companies including Panasonic and ARM fell into line behind the U.S. ban and others like Toshiba scrambled to check their exposure, the widespread impact of the move on complex global supply chains is becoming clear.

Accordingly, shares have tumbled worldwide. Among others, the potential loss of business from the Chinese smartphone giant has hit Europe’s AMS and STMicroelectronics. Taiwan Semiconductor, which Bernstein analysts calculate makes around 11% of revenues from Huawei, sank too.

The Philadelphia semiconductor index, widely seen as a bellwether for world chipmakers, has lost around 18% in just a month since hitting a record high on April 24.

However, some telecoms equipment firms such as Nokia and Ericsson could benefit if the Huawei clampdown diverts business to them.

Trump’s latest claim that Huawei could be part of a trade deal has injected some hope into markets, but unless further talks are announced investors will remain unconvinced.

(For a graphic on ‘Chips tank worldwide as trade tensions return’ click https://tmsnrt.rs/2X6l0Yq)

3/EM TANTRUM WITHOUT THE TAPER?

Markets have a funny way of repeating themselves and exactly six years on from the ‘taper tantrum’, when investors freaked at the sudden realization the U.S. Fed wanted to end money printing, some are wondering whether something similar is brewing again.

A conviction the U.S.-China trade war will force the Fed to cut interest rates have pushed benchmark government bond yields that drive global borrowing costs to the lowest in years. But just like in 2013, the Fed is flagging something different.

It has signaled it may sit on its hands “for some time”. So if yields do start to spring back up, things could get scary.

Emerging markets in particular have painful memories of the taper tantrum. Economic surprises in the developing world are the most negative now in six years, according to an index compiled by Citi. And nearly $4 billion fled EM equities last week, EM equities have dropped around 10% so far this month and the premiums investors demand to hold EM bonds have spiked.

Clearly, many investors are not hanging around to find out what happens next.

(For a graphic on ‘EM stocks having a tantrum without the taper’ click https://tmsnrt.rs/2EtdQG4)

(For a graphic on ‘EM economic surprises most negative in six years’ click https://tmsnrt.rs/2YEM2q6)

4/MODI-NOMICS TO THE TEST After a stunning win in the world’s biggest election, Indian Prime Minister Narendra Modi begins to put together a new cabinet and a 100-day action plan. Focus is on who becomes finance minister — Arun Jaitley, a key troubleshooter for years — is said to be out of the race due to ill-health.

Modi’s re-election reinforces a global trend of right-wing populists sweeping to victory, from the United States to Brazil and Italy. Energised by his brand of Hindu nationalism, voters gave less weight to his failure to create jobs — a key campaign promise at the last election. In fact, a complex tax reform and a flash demonetization pushed millions out of work.

Credibility issues aside, upcoming growth data will be a reminder that while investors gave Modi a big thumbs up and pushed Indian stocks to record highs, the economy is less cheerful. Corporate earnings have in fact disappointed in the years Modi has been in office. And small businesses, low-income farmers, jobseekers and liquidity-starved banks will demand more of him in his second mandate.

(For a graphic on ‘Corporate India Earnings’ click https://tmsnrt.rs/2D7eato)

5/ON THE ROAD AGAIN

The U.S. summer vacation season begins, unofficially, with the Memorial Day weekend, and travel volumes across the United States should be the second-highest on record this year, according to the American Automobile Association (AAA). Despite high fuel prices, nearly 43 million Americans will be traveling over the long weekend, and 37.6 million will be driving, making this holiday travel season the busiest since 2005, the AAA predicts.

But gasoline supplies are tight on the U.S. East and West Coasts, leaving both regions vulnerable to potential price spikes at the pump, just as the peak summer driving season kicks off. High fuel prices cut into people’s discretionary spending though, so the question is what impact there will be on the U.S. consumer.

Consumer spending — which includes spending on services such as travel — jumped in March by the most in nearly a decade, following small increases in the previous two months. But even though first-quarter U.S. growth was a healthy 3.2% on an annual basis, consumer spending grew less. In coming months, the economy is widely seen decelerating; the question is what role consumer and travel spending will play.

(For a graphic on ‘Summer Gas Season’ click https://tmsnrt.rs/2EuvqcP https://tmsnrt.rs/2EuvqcP)

(Reporting by Sujata Rao, Helen Reid and Marc Jones in London; Marius Zaharia in Hong Kong and Jennifer Ablan in New York)

Source: OANN

Workers are seen near the booth of Huawei Technologies Co under construction at the venue of China International Big Data Industry Expo in Guiyang
Workers are seen near the booth of Huawei Technologies Co under construction at the venue of China International Big Data Industry Expo in Guiyang, Guizhou province, China May 22, 2019. Picture taken May 22, 2019. REUTERS/Stringer

May 24, 2019

By Sijia Jiang and Josh Horwitz

HONG KONG/SHANGHAI (Reuters) – China’s Huawei, hit by crippling U.S. sanctions, could see shipments decline by as much as a quarter this year and faces the possibility that its smartphones will disappear from international markets, analysts said.

Smartphone shipments at Huawei, the world’s second-largest smartphone maker by volume, could tumble between 4% and 24% in 2019 if the ban stays put, according to Fubon Research and Strategy Analytics.

Several experts said they expect Huawei’s shipments to slide over the next six months but declined to give a hard estimate due to uncertainties surrounding the ban.

The U.S. Commerce Department blocked Huawei from buying U.S. goods last week amid its escalating trade spat with China.

The ban applies to goods and services with 25% or more of U.S.-originated technology or materials, and may, therefore, affect non-American firms.

Tech companies including Google and SoftBank Group-owned chip designer ARM have said they will cease supplies and updates to Huawei.

“Huawei may be wiped out of the Western European smartphone market next year if it loses access to Google,” said Linda Sui, director of wireless smartphone strategies at Strategy Analytics.

She predicts Huawei handset shipments will decline another 23% next year but believes the company could survive on the sheer size of the China market.

Fubon Research, which previously forecast Huawei would ship 258 million smartphones in 2019, now expects the company to ship just 200 million in a worst-case scenario.

Huawei commands nearly 30% of the global market according to industry tracker IDC, and shipped 208 million phones last year, including half to markets outside China. The company counts Europe as the most important market for its premium smartphones.

WHO WINS?

Huawei has said it has been developing the technology it needs to be self-sufficient for years.

But experts are not buying the company’s claim.

They said key components and intellectual property needed in Huawei’s devices are not available outside the United States.

Huawei would potentially need to lay off thousands of people and “disappear as a global player for some time,” said Stewart Randall, who tracks the chip industry at Shanghai-based consultancy Intralink.

Potential buyers of Huawei’s phones are likely to switch to high-end devices from Samsung Electronics and Apple Inc, and also buy mid-end phones from domestic rivals OPPO and Vivo, analysts said.

“It leaves an amount of share in its wake that can get picked up by competitors, particularly Samsung given its strength in regions like Europe,” said Bryan Ma, who researches the global smartphone market at IDC.

Huawei handsets are already drawing fewer clicks from online shoppers since the United States blacklisted the company, according to PriceSpy, a product comparison site that attracts an average of 14 million visitors per month.

“Over the last four days, Huawei handsets have slumped in popularity – receiving almost half as many clicks as they did last week in the UK and 26% less on the global stage,” PriceSpy said.

The export ban on Huawei could also delay China’s 5G rollout, Jefferies analyst Edison Lee said. Huawei has said it signed 5G contracts with 40 clients around the world.

(Reporting by Sijia Jiang in HONG KONG and Josh Horwitz in Shanghai; Writing by Sayantani Ghosh; editing by Louise Heavens)

Source: OANN

Xiaomi logos are displayed during a news conference in Hong Kong
FILE PHOTO: Xiaomi logos are seen during a news conference in Hong Kong, China June 23, 2018.  REUTERS/Bobby Yip

May 24, 2019

SHANGHAI (Reuters) – Smartphone maker Xiaomi Corp confirmed on Friday that it had dismissed the head of its Africa division for violating a Chinese law pertaining to indecent public behavior.

According to an internal letter dated May 23 and widely circulated online, the company dismissed vice president Wang Lingming for violating Article 44 of China’s public safety law.

Xiaomi confirmed the veracity of the letter, which also says Wang was detained for 5 days by public security bodies, but the Chinese company declined to comment further.

Reuters could not immediately reach Wang for a comment.

Article 44 of China’s public safety law states: “Whoever commits an obscenity against another person or deliberately exposes his body in a public place shall be detained for a period of no less than five days and less than ten days”.

Xiaomi appointed Wang as head of its newly created Africa unit in January. It later launched a partnership with e-commerce platform Jumia to distribute its phones in Africa, where it faces steep competition from Samsung Electronics, Huawei Technologies, and Shenzhen Transsion Holdings.

Xiaomi is the world’s fourth-largest smartphone vendor, according to research firm IDC, and has been expanding abroad aggressively as China’s smartphone market contracts.

(Reporting by Josh Horwitz; Editing by Himani Sarkar)

Source: OANN

FILE PHOTO: Illustration photo of a China yuan note
FILE PHOTO: A China yuan note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

May 24, 2019

By Winni Zhou and John Ruwitch

SHANGHAI (Reuters) – As China’s yuan slips to historically weak levels against the dollar, the central bank’s atypical light touch is spurring speculation that policymakers want to be more judicious in their intervention and have no specific target for the currency.

The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute took a turn for the worse with tariff increases early this month. It is now less than 0.1 yuan away from the 7-per-dollar level authorities have in the past indicated as a floor.

A weakening yuan risks sparking outflows, a major concern for policymakers keen to retain investor confidence in a slowing economy and acrimonious trade war with the United States.

But the People’s Bank of China (PBOC) has done little to keep the yuan in check, beyond issuing yuan-denominated bills in Hong Kong and setting the managed currency’s daily mid-point consistently stronger than market expectations.

“My sense is that 7 is no longer so critical as in 2016. Policymakers are more confident,” said Tommy Xie, head of Greater China research at OCBC Bank in Singapore. “It also depends on the cost of defending 7.”

In 2015, a one-off 2% yuan devaluation fueled depreciation expectations, and Beijing burned through about $1 trillion of foreign exchange reserves to fight back.

In 2018, to hold the currency steady, the PBOC raised the cost of shorting the yuan by hiking reserve requirements on forwards. State-owned banks also used swaps and sold dollars to prop up the local unit.

Despite the trade war, it was not until this week that senior central bank officials launched a verbal campaign to remind the market that China can keep the yuan “basically stable” and draw on a toolbox of policies to manage fluctuations.

“Nothing has gone wrong, and (we) will not allow anything to go wrong,” Liu Guoqiang, PBOC vice governor, told the Financial News, a newspaper run by the central bank.

The PBOC did not respond immediately to faxed questions from Reuters about its policy and tactics relating to yuan levels.

(GRAPHIC: China’s falling yuan approaches 7/dollar – https://tmsnrt.rs/2W6Aoqb)

SUBTLE MESSAGE

To yuan watchers, the central bank’s perfunctory actions and messaging suggest a higher degree of comfort with a weaker yuan, while the currency’s stability against a basket of trade-weighted currencies is evidence it is not encouraging excess depreciation.

“The authorities are providing only the support needed to cap yuan weakness, rather than trying to strengthen the currency significantly,” Lemon Zhang, a strategist at Standard Chartered Bank wrote in a note.

A weaker yuan would theoretically help exporters, many of whom are feeling the pinch of U.S. tariffs on billions of dollars worth of made-in-China goods.

BofAML analysts Claudio Piron and Ronald Man reckon China will limit the yuan’s weakness in the run-up to a G20 summit at the end of June, when U.S. President Donald Trump and his Chinese counterpart Xi Jinping might meet.

If that meeting fails to produce a breakthrough easing trade tensions, “it is clear that China has the capacity and need for yuan depreciation to dollar/yuan 7.13. Fiscal stimulus and monetary easing would be required to support China’s economy,” they said.

But analysts suspect the PBOC’s strategy is not just about targeting yuan levels but also involves managing its currency reserves and a growing international role for the yuan. Those explain the central bank’s reluctance to reduce its dollar reserves too quickly or drive up interest rates in the offshore yuan market in order to make it expensive to short-sell the currency.

“If the central bank chooses to intervene directly in the market, a decline in the reserves to $2.9 trillion from $3 trillion would trigger greater shock to market confidence,” said Raymond Yeung, ANZ’S chief Greater China economist in Hong Kong.

Yeung says the PBOC “is unwilling to see a huge gap between onshore and offshore yuan as that would affect international institutions’ judgment of whether the yuan is capable as a reserve currency”.

The offshore yuan this week has been relatively weaker than the onshore one, but the PBOC’s sale of its debt in Hong Kong, intended to drain offshore yuan supplies, has been small scale.

As the central bank juggles multiple objectives, its injections of cash onshore, aimed at spurring lending in a slowing economy, have also been modest, in part to guard the exchange rate.

(Editing by Vidya Ranganathan and Richard Borsuk)

Source: OANN

Hong Kong Chief Executive Carrie Lam attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing
FILE PHOTO: Hong Kong Chief Executive Carrie Lam attends a thematic forum of the second Belt and Road Forum for international cooperation in Beijing, China, April 25, 2019. REUTERS/Jason Lee

May 24, 2019

HONG KONG (Reuters) – The European Union Office in Chinese-ruled Hong Kong told Hong Kong’s leader of its concerns on Friday over a proposed extradition law that could see individuals sent back to mainland China for trial.

The proposed legislation has stoked mass protests in the former British colony, which was promised a high degree of autonomy, including an independent judiciary, under a “one country, two systems” formula when it returned to China in 1997.

Critics, including foreign governments, legal and business groups, have expressed fears the law could erode Hong Kong’s rule of law and leave individuals, including foreign nationals passing through the city, vulnerable to being sent back for an unfair trial on the mainland.

The European Office in Hong Kong and Macau said in a brief statement that it had, together with diplomatic representatives from its member states, met with Hong Kong’s leader Carrie Lam to “carry out a demarche reiterating their concerns regarding the government’s proposed amendments to Hong Kong’s Fugitive Offenders Ordinance”.

The head of the office, Carmen Cano, wasn’t immediately available for comment. There was no immediate comment from Lam’s office.

(Reporting by James Pomfret; Editing by Nick Macfie)

Source: OANN


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