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Thursday, May 11, 2023

Will US debt ceiling deadlock push capital to yuan market?

Expert: The role of the U.S. dollar declines

The US Government is BROKE | The 2023 Debt Ceiling

Every few years, there is a bipartisan political farce over the debt ceiling negotiations in the US. It may look like a routine political drama, but quantitative change can lead to a qualitative difference, especially at a time when a global de-dollarization trend is gaining momentum, that is to say, the US trick of raising the debt limit to mitigate its default risk may now be very close to pushing the US treasuries to a dangerous tipping point.

The de-dollarization caused by the US debt crisis and the abuse of the dollar hegemony created unprecedented opportunities for the yuan internationalization, with more and more countries expressing willingness to settle trade in the yuan, but China must proceed with caution.

With the US on track to default without a debt ceiling increase, US President Joe Biden's talks with House of Representatives Speaker Kevin McCarthy on Tuesday failed to make any meaningful progress, with political divides remaining between the two parties, Reuters reported. Biden even told the media that he has been looking at the 14th Amendment as a way to unilaterally work around the debt ceiling, though it will not be a viable short-term solution.

The political stalemate over raising the debt limit has already led to US Treasury Secretary Janet Yellen warning of an "economic catastrophe" if the US fails to meet all government payment obligations, which could happen "potentially as early as June 1."

So far, most people still believe that the two parties will eventually reach a deal to avoid an ugly sovereign default before the deadline, just like what happened every time in the past debt ceiling struggles.

But unlike in the past, a new question has been raised in the market, that is, are the US treasuries still highly liquid? The US dollar's credit is the cornerstone of US treasuries. Because the dollar is an international settlement currency and US treasuries have stable yields and are highly liquid, countries are willing to hold US debt, making the US the world's largest debtor.

Yet, things may be different now with countries accelerating their de-dollarization efforts. The past year saw growing number of countries and regions such as India, Brazil, and the EU trying to establish new settlement systems for their trade.

Under the influence of the de-dollarization wave, some countries have reduced their holdings of US treasuries. Japan, the world's largest holder of US debts, slashed its holdings by $224.5 billion and China by $173.2 billion in 2022.

Moreover, the US' unlimited expansion of the size of its debt has also upset the market with the risks in the US treasuries. According to Yellen's testimony in a congressional hearing in March, gross federal debt would swell to $51 trillion after a decade. The scale and speed of the debt expansion means the US is getting increasingly closer to a real explosion of a debt crisis.

Also, the root cause of the US banking crisis this year is the holding of a large number of US treasuries assets, which shrank significantly in value as interest rates continued to climb. That could be a warning to various governments and precipitated them to speed up the pace of de-dollarization. Since the collapse of the Silicon Valley Bank, international investors stepped up sell-off of treasuries, and prices of all kinds of safe-haven assets like gold have surged.

Of course, de-dollarization is likely to be a long-term process, but once it started, the US treasuries could lose its aura quickly, especially as the US government repeatedly raises debt ceiling or faces risk of default. In other words, as the world realizes that the US cannot and does not have the willingness to control or reduce the size of its debt, the credibility of the US debt as a safe-haven asset is collapsing rapidly.

It should be noted that amid the de-dollarization trend, the yuan internationalization has made a series of positive new developments and breakthroughs. The yuan's international status as a trading currency has been significantly improved recently.

To ensure future development of the yuan internationalization, China needs to ensure liquidity and maintain exchange rate stability. Thus, China's financial markets as well as the yuan's onshore and offshore markets need more preparation to adapt to the new needs.

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Wednesday, May 10, 2023

Anwar: The Untold Story' biopic premiere

Prime Minister Datuk Seri Anwar Ibrahim and his wife, Datuk Seri Dr Wan Azizah Wan Ismail appeared touched after watching the premier of 'Anwar: The Untold Story' - Bernama pic

PM pays loving tribute to wife

Anwar was sentenced to jail in 1999 after being charged with abuse of power. Four years after his release, he was accused of sodomising an aide in 2008.

He was imprisoned for sodomy in 2015 and released on May 16, 2018, upon receiving a royal pardon.

The film documents Anwar’s journey to battle corruption. It charts the period from when he was first appointed as Finance Minister in 1991 until his sacking from the Cabinet in 1998 and the “Reformasi” campaign, which led to his imprisonment later that year.

“It is difficult for me to comment much as I have tried very hard to forget certain episodes which were too hurtful for me to bear,” he told reporters.

He also said that although the film’s overall dialogue was not wholly accurate, the issues it raised were based on true events.

Despite going through so much, he made it clear during the media conference that he would not let the hardship stop him from campaigning for what’s right.

“The battle against corruption continues. As Prime Minister, I want to save this country, fight against corruption and fight it hard,” he said.

KUALA LUMPUR: Prime Minister Datuk Seri Anwar Ibrahim and his wife, Datuk Seri Dr Wan Azizah Wan Ismail appeared touched after watching the premiere of 'Anwar: The Untold Story' last night.

He said although some of the dialog and storyline may not be truly accurate, he acknowledged that it was not easy to put together years of incidents into the 90-minute long biopic.

"We were touched, it was surreal, the performances were great and extraordinary.

"The children asked how can I agree to the making of the movie which I have not watched.

"Agree or not is not important, this is not a movie by Anwar for Anwar.

"Also, whether this movie will have a political impact or not is secondary, because this is a story that needs to be told," he said, after the show at Dadi Cinema, Pavilion here.

The film was directed by Viva Westi of Indonesia, with Farid Kamil as Anwar, Tanda Putera actor Hasnul Rahmat as former prime minister Tun Dr Mahathir Mohamad and Indonesian actress Acha Septriasa as Wan Azizah.

The film attempted to chart the period from Anwar's appointment as finance minister in 1991 until his firing from the cabinet in 1998, as well as his Reformasi campaign which culminated in his jailing that year.

Anwar said while watching the movie, he identified some scenes that might not bode well with his siblings.

However, he said he has no plan to intervene and ask for it to be edited out and would leave the matter to the censorship board to decide.

"If they (siblings) are offended, then I will just have to make it up to them." he added.

Anwar said initially, he was hoping to listen to 'Menjaga Cintamu', the movie's theme song by pop queen Datuk Seri Siti Nurhaliza Taruddin but it was not included during the premier.

He hoped that the song, composed by Andi Rianto and written by Sekar Ayu Asmara, will be included in the final version of the movie which will be screened to public from May 18.

Also present during the premiere were director Viva Westi, executive producer Zulkiflee SM Anwar Ulhaque or better known as Zunar, and DMY chairman Datuk Mohamed Yusoff, the movie distributor.

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China’s reusable spacecraft returned to earth

China’s reusable spacecraft returned to earh

China's reusable experimental spacecraft successfully lands after 276 days in orbit

Sitting atop the Long March-2F Y14 carrier rocket and carrying three taikonauts, China's Shenzhou-14 spaceship is launched successfully from the Jiuquan Satellite Launch Center in Northwest China's Gansu Province on June 5, 2022. Photo: VCG

After 276 days in orbit, China's reusable experimental spacecraft landed at its planned site at the Jiuquan Satellite Launch Center in Northwest China's Gansu Province on Monday, and Chinese space watchers said it was a milestone in China's efforts to develop a fully reusable space transportation system.

The success is an important breakthrough in China's research on reusable spacecraft technologies, which will provide more convenient and affordable round trips for the peaceful use of space, the Xinhua News Agency said on Monday.

China launched a reusable experimental spacecraft using its Long March-2F carrier rocket from the Jiuquan Satellite Launch Center on August 5, 2022, to test reusable technologies and in-orbit service technologies to support the peaceful use of space, Xinhua previously reported.

China tested the reusable experimental spacecraft in September 2020, and the spacecraft returned to the planned landing site after two days in orbit. The spacecraft was also launched with a Long March-2F carrier rocket.

Chinese authorities have disclosed few details about the craft's technology. So far, no images of the spacecraft or footage of its launch or landing have been disclosed.

Many space lovers compared it to the US Air Force's X-37B, an autonomous Boeing space plane that can remain in orbit for long periods before returning to Earth on its own, saying that the technology used in the experiment is "too advanced to show" on social media.

The reusable spacecraft's technology has evidently matured, considering how much longer it can stay in orbit, Chinese space watchers noted on Sunday.

Song Zhongping, a space expert and TV commentator, told the Global Times on Monday that the reusability of such spacecraft would drastically reduce costs. More importantly, the longer orbiting time means that the spacecraft can perform more complicated missions such as changing trajectory in near-Earth orbit and sending various payloads into orbit.

Judging from the rocket used in the launch, the Long March-2F carrier rocket - which is one of China's most advanced and reliable rockets for manned space flights - the reusable spacecraft may be used in future manned missions, said another space observer, speaking on condition of anonymity.

Given the payload launching capability of the Long March-2F, the spacecraft could weigh around 8 tons, which is very similar to the launch mass for the X-37B at around 5 tons, so that speculation about their similarity is not groundless, the observer said.

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China’s secret spacecraft returns to Earth after 9-month mission

Experts believe the Chinese reusable unmanned spacecraft is likely to be similar in size and design to the US Air Force’s X-37B, pictured at a California military base. Photo: AP

Chinese space authorities said a reusable uncrewed space vehicle returned to Earth on Monday morning after 276 days in orbit – more than 100 times longer than its maiden flight less than three years ago.

China Aerospace Science and Technology Corporation, the nation’s biggest space defence contractor, hailed the classified mission as a “complete success”, saying it “marks an important breakthrough” in China’s research into the technology.

Reusable spacecraft “will provide a more convenient and cost-effective way for peaceful use of space”, the company said.

China scientists carry out ‘rule-breaking’ AI experiment in space

Researchers from Wuhan University say they gave the technology full control of a satellite and set it free for 24 hours

The artificial intelligence machine picked a few places and ordered the small near-Earth orbiter to take a closer look

A small Chinese satellite was directed by artificial intelligence to observe sites in India and Japan, according to a research paper. Photo: Shutterstock

Chinese researchers say an artificial intelligence machine was given temporary full control of a satellite in near-Earth orbit, in a landmark experiment to test the technology’s behaviour in space.

For 24 hours the Qimingxing 1, a small Earth observation satellite, was directed by a ground-based AI, without any human order, assignment or intervention, according to a paper published in the journal Geomatics and Information Science of Wuhan University.

The research team, led by Wang Mi from the university’s State Key Laboratory of Information Engineering in Surveying, Mapping and Remote Sensing, said the aim of the experiment was to see what the AI would do of its own accord.

‘Red scare’ in US causes multi-year flood of refugees with PhDs to China

OECD data shows China sustains net gain of scientists while US suffers net loss as ethnic Chinese researchers fear US government surveillance and prosecution

The United States may want to choke off vital supplies of hi-tech gear, especially advanced semiconductors, to China. But, thanks to a “red scare” about industrial espionage and intellectual property theft that has specifically targeted ethnic Chinese researchers, it is inadvertently repatriating scientific talent to the mainland on a massive scale.

It’s an influx of refugees all right, but with PhDs and other advanced degrees, and many even with tenures back in the US. Forget Beijing’s Thousand Talents Plan or Overseas High-Level Talent Recruitment Programmes. The US government is recruiting for China by creating a climate of fear among an ethnic group of researchers through selective prosecution, while casting hundreds under suspicion and killing the careers of many.

In a new analysis of Organisation for Economic Cooperation and Development (OECD) data, the conservative Cato Institute found that in 2021, the US lost published research scientists to other countries, while China gained more than 2,408.

“This was a remarkable turnaround from as recently as 2017 when the United States picked up 4,292 scientists and China picked up just 116,” it said. “The rest of the OECD and China have both surpassed the United States for net inflow of scientific authors.”

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The institute concludes: “This is a disturbing trend … started before the pandemic. In fact, it appears to coincide with the Trump administration’s ‘China Initiative’ – more accurately titled the anti‐Chinese initiative.

“Launched in November 2018, the Department of Justice’s campaign was supposed to combat the overblown threat of intellectual property theft and espionage. In reality, it involved repeatedly intimidating institutions that employed scientists of Chinese heritage and attempting malicious failed prosecutions of scientists who worked with institutions in China.”

While the FBI and Justice Department have supposedly ended its “China initiative”, the US National Institutes of Health (NIH), the country’s single largest funding source of academic biomedical research, has been boasting about its high kill rates.

According to a March report in the prestigious peer-reviewed journal Science, in the past four years, the NIH asked about 100 US institutions it funded to carry out internal investigations into academic staff. Some 81 per cent of the scientists targeted identified themselves as Asian, and 91 per cent of the collaborations under investigations were linked to China.

Science reports that 103 of those scientists, or 42 per cent of the 246 targeted – most of them tenured faculty members – ended up losing their jobs.

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Even today, top NIH management is proud of the work, having cited the high number of “successful” cases resulting in job termination. But, according to Science, some administrators might find it easier to sack an employee than fighting the powerful NIH.

“Others, including some of the scientists targeted and the university administrators involved in investigating them, say the tremendous power differential between NIH and its grantees may be a better explanation for why so many scientists have been axed,” the Science article said.

“NIH is by far the largest funder of academic biomedical research in the United States, and some medical centres receive hundreds of millions of dollars annually from the agency. So when senior administrators heard [Michael Lauer, head of NIH’s extramural research] say a targeted scientist ‘was not welcome in the NIH ecosystem’, they understood immediately what he meant – and that he was expecting action.”

Separately, a late 2021 survey by MIT Technology Review identified at least 77 criminal cases and more than 150 defendants, out of hundreds of investigations linked to the China Initiative targeting research institutes.

“The initiative was supposed to focus on economic espionage, but it has increasingly charged academics with ‘research integrity’ issues,” it said. Team behind extreme animal gene experiment eyes human nuclear resistance 29 Mar 2023

According to another survey by researchers at the University of Arizona, more than one in two scientists of Chinese descent feel considerable fear, anxiety, or both, about being surveilled by the US government, compared to 12 per cent of non-Chinese scientists.

The climate of fear noted by the Cato Institute study is hardly surprising. It warns: “If Chinese scientists are afraid to work in the United States, that means that the United States will not benefit from their discoveries as much or as quickly as China will.

“Although the Justice Department claims to have shut down its ‘China Initiative’, my colleagues doubt that Chinese scientists will be free from unjust scrutiny going forward.”

Beijing must love the irony. “Keep them coming, please,” it must be thinking.