WASHINGTON — The United States on Monday removed the currency manipulator label it imposed on China last summer, in a sign of easing tensions between the two economic powers after nearly 2 years of conflict.
Just 2 days before President Donald Trump is set to sign a "phase one" trade agreement with China, the US Treasury said in its semi-annual report to Congress that the yuan has strengthened and Beijing is no longer considered a currency manipulator.
Although Treasury refrained from slapping the label on China in its report last May, Trump in August angrily accused Beijing of weakening its currency "to steal our business and factories," re-stating a long-standing grievance.
Chinese authorities in August allowed the yuan to fall below 7 to the dollar for the first time in a decade, sending shudders through stock markets at the time and stoking Trump's ire.
"Over the summer, China took concrete steps to devalue its currency," the yuan or renminbi (RMB), and those moves "left the RMB at its weakest level against the dollar in over 11 years," Treasury said.
However, more recently was strengthened to 6.93 to the dollar and Treasury said the trade pact addresses currency issues.
"In this agreement, China has made enforceable commitments to refrain from competitive devaluation and not target its exchange rate for competitive purposes," Treasury Secretary Steven Mnuchin said in a statement.
However that commitment is identical to the one Beijing has long made as part of the Group of 20 major global economies.
SYMBOLIC MOVE
Though the semi-annual currency report always gains attention as a key sign of relations between the powers, the currency manipulator designation was largely symbolic.
The label calls for the US Treasury committed to work with the International Monetary Fund to "eliminate the unfair competitive advantage" created by China's alleged actions and to consult with Beijing about the matter.
However, many economists questioned the decision to label China a manipulator.
"China shouldn't have been designated to start with. Small current account surplus/GDP; scant intervention," Mark Sobel, a former Treasury official, said on Twitter.
While he acknowledged the large trade surplus, he said "economists disregard those."
"RMB fell in response to Trump's tariffs. Designation was blatant/errant political act," Sobel tweeted.
As part of the trade deal "China has also agreed to publish relevant information related to exchange rates and external balances."
Mnuchin said the phase one deal is significant and "will lead to greater economic growth and opportunity for American workers and businesses."
However, Treasury said Beijing still needs to take steps "to stimulate domestic demand and reduce the Chinese economy’s reliance on investment and exports."
Top Chinese trade envoy Liu He arrived Monday in Washington on Monday ahead of Wednesday's expected signing of the agreement.
After multiple rounds of tariffs, the US trade deficit in goods through November 2019 was running at over $320 billion, which is about $62 billion below the same period of 2018.
"Treasury remains disturbed by the persistent and excessive trade and current account imbalances that mark the global economy," the report said.
The US Trade Representative's Office announced over the weekend that as part of the initial trade deal, Washington and Beijing will hold "at least bi-annual" meetings -- something that previous administrations did for years but that Trump scrapped in favor of a more aggressive approach.
Mnuchin and Federal Reserve Governor Jerome Powell are also will conduct macro-economic meetings with top Chinese officials "on a regular basis," USTR said.
The currency report had eight other countries on the "monitoring list" due to concerns about their currency practices: Germany, Ireland, Italy, Japan, South Korea, Malaysia, Singapore, Switzerland, and Vietnam.
Agence France-Presse
WASHINGTON — Former US Federal Reserve chairman Paul Volcker, who tackled American inflation in the 1970s and 80s and later lent his name to landmark Wall Street reforms, has died in New York.
Volcker, who headed the US central bank from 1979 to 1987, was 92. The cause of his death Sunday was complications from prostate cancer, his daughter Janice Zima told AFP.
Tall and known for his dead-pan humor, Volcker forged a career as a financier and fiercely independent public servant who wielded monetary policy with authority and acumen.
A Democrat, he advised American leaders of both major parties, starting with Richard Nixon in 1971 at the US Treasury, where he helped guide the US exit from the gold standard.
His tenure ended with Barack Obama as Volcker promoted stricter banking regulation in the wake of the 2008 global financial crisis.
But it was as Federal Reserve chairman, first under Jimmy Carter and then Ronald Reagan, that he left his deepest mark, albeit during difficult times, and earned the respect of economists around the world.
"I am deeply saddened by the passing of Paul Volcker. He believed there was no higher calling than public service," current Fed chairman Jerome Powell said in a statement.
"His life exemplified the highest ideals -- integrity, courage, and a commitment to do what was best for all Americans. His contributions to the nation left a lasting legacy."
After announcing his candidacy for the White House in 2015, Donald Trump expressed admiration for Volcker, saying "there was something very solid about him."
Carter said Monday he was "deeply saddened" to learn of Volcker's death, calling him "a giant of public service," suggesting his actions may have helped cost Carter a second term but were still "the right thing to do."
President Barack Obama, House Speaker Nancy Pelosi and Bank of England Governor Mark Carney also issued statements paying their respects to Volcker.
Amid the oil crisis in the late 1970s, the American economy suffered rampant inflation. Carter bucked the advice of aides who said installing Volcker at the Fed would mean "tough medicine."
HOLDING FIRM
With inflation -- which Volcker described as too much cash chasing too few goods -- hitting an eye-watering 14 percent annually, he made no secret of his plans to raise interest rates.
"I don't think there is any feeling or any evidence around at the moment that the economy is suffering grievously from a shortage of money," Volcker testified during his Senate confirmation.
With Volcker at the helm, the Fed raised interest rates from 11 percent to 20 percent (today, by comparison, they are in a range of 1.5 to 1.75 percent).
Such drastic tightening was especially painful and hit during a recession. Auto dealers sent him car keys in coffins. Building contractors mailed him wood planks they could not use, since homes were not selling.
Farmers drowning in debt drove tractors to encircle the central bank's offices.
But the hard-nosed Volcker gave no ground. "He becomes intellectually stimulated by a crisis," his late wife Barbara said, according to the author William Neikirk.
The firm stance paid off, with inflation falling to 3 percent by 1983. Along with the Iranian hostage crisis, it also helped cost Carter his chances at reelection.
Volcker left the Fed in 1987 and joined James Wolfensohn's investment firm. Wolfensohn later became president of the World Bank.
The former Fed chief reemerged on the public scene 20 years later during the global financial crisis as an Obama adviser.
A critic of banks' high-risk trading and their executives' gigantic pay packages, he proposed what would become known as "the Volcker rule," restricting so-called proprietary trading.
The regulation was blasted by Frank Keating, then head of the American Banking Association, as too complex and onerous for implementation -- and came under fire again in the anti-regulation era of President Donald Trump.
The ABA on Monday offered its "deepest condolences," saying Volcker left "a giant legacy of dedicated public service."
A grandson of German immigrants, Volcker was born in 1927 in Cape May, New Jersey, developed a love of fly-fishing and studied at Princeton and Harvard.
A father of 2, he remarried at age 83 in 2010, taking his long-serving assistant as his bride, 12 years after the death of his first wife, Barbara.
Agence France-Presse
WASHINGTON - The backlash against Big Tech moved into a new phase Monday as officials from nearly all US states announced an antitrust investigation into the dominance of internet giant Google.
The announcement from 50 attorneys general calls for a probe into whether Google abused its power in the online ecosystem at the expense of rivals or consumers.
The move, described as a preliminary probe of Google's actions in online advertising, highlights the growing complaints about Big Tech dominance and follows a separate investigation into Facebook announced last week by a coalition of US states.
Texas Attorney General Ken Paxton said the probe underscores fears about how Google benefits from data harvested from the online ecosystem.
"What we've all learned is that while many consumers believe the internet is free… the internet is not free," Paxton told a news conference in front of the US Supreme Court.
"There is nothing wrong with a business becoming the biggest game in town if it does so through free market competition, but we have seen evidence that Google's business practices may have undermined consumer choice, stifled innovation, violated users' privacy and put Google in control of the flow and dissemination of online information."
Utah Attorney General Sean Reyes, who joined the news conference, said: "The question for us is whether Google has strayed from its founding principles to not do evil."
Pennsylvania's Josh Shapiro added: "We're looking into whether Google's business practices have undermined free market competition -- and hurt consumers."
The probe is being backed by 48 states -- with only California and Alabama absent -- and joined by Puerto Rico and the federal District of Columbia, and officials stopped short of calling for any specific remedies such as a breakup -- which some Google critics have called for.
"It is an investigation to determine the facts," Paxton said. "Right now it is on advertising but the facts will lead where the facts will lead.
The latest probes come on top of a review launched earlier this year by federal regulators of major online platforms to determine if they have "stifled" innovation or reduced competition.
CONSUMER CHOICE?
Kent Walker, Google's senior vice president of global affairs, said in a blog post Friday that the company would cooperate with regulators while stressing that its services "help people, create more choice, and support thousands of jobs and small businesses across the United States."
According to research firm eMarketer, Google leads the US digital ad market with a 37.2 percent share worth some $48 billion this year and is expected to control 20 percent of all US ad spending, online and offline combined.
Google is by far the largest online search engine and captures nearly 75 percent of search-related online ads in the US, according to eMarketer.
STATES TAKE UP SLACK
Christopher Sagers, a Cleveland State University professor of antitrust law, said it was potentially "very significant" to see the state coalitions working on antitrust.
"After the past few years, the Trump administration's antitrust program has come to seem pretty inactive, influenced by a lot of politics that have made it hard to interpret," Sagers said.
On Friday, New York state Attorney General Letitia James announced an action on behalf of seven other states and the District of Columbia to probe "whether Facebook has stifled competition and put users at risk."
Facebook offered no immediate comment, but in the past it has claimed it is not a monopoly and that consumers have many choices for how to connect with people online.
'FISHING EXPEDITION?'
The antitrust actions come against a backdrop of declining public trust in big online firms, and fines levied against Facebook and Google over privacy violations.
Yet the legal basis for an antitrust action remains unclear, said Eric Goldman, director of the High Tech Law Institute at Santa Clara University.
"It remains to be seen if the (attorneys general) have any merit to their complaints or if they will be conducting a fishing expedition hoping to find some damning evidence," Goldman said.
"Companies as large as Google or Facebook probably have minor problematic practices the AGs could target, but I'm still waiting for any evidence that would support more structural challenges to the internet giants' practices."
Charlotte Slaiman of the consumer group Public Knowledge welcomed the new investigations as "an important and powerful step" which "can help consumers and innovative competitors access markets for platforms that are more fair and more competitive."
source: news.abs-cbn.com
WASHINGTON, United States - US regulators on Thursday denied a request by China Mobile to operate in the US market and provide international telecommunications services, saying links to the Chinese government pose a national security risk.
The Federal Communications Commission said that because of China Mobile USA's ownership and control by the Chinese government, allowing it into the US market "would raise substantial and serious national security and law enforcement risks."
The decision brings the Chinese telecoms giant's 8-year effort to crack the US market to an end, but was not really a surprise since FCC Chairman Ajit Pai had publicly opposed the company's application last month.
China Mobile -- the world's largest mobile operator with nearly 930 million customers as of February -- first filed an application for permission to operate in the United States in 2011.
The 5-member FCC said in a statement that the decision was made after "extensive review" and "close consultation" with national security and law enforcement agencies.
It also marks the first instance in which executive branch agencies have recommended that the FCC deny an application due to national security and law enforcement concerns, the statement said.
The move comes as Chinese tech firms -- such as Huawei and ZTE -- have faced stiff resistance from US government agencies, which have described them as security threats.
WIDER TRADE BATTLE
ZTE came close to collapse last year after American companies were banned from selling it vital components over its continued dealings with Iran and North Korea.
Federal authorities unveiled sweeping charges against Huawei in January for allegedly stealing technology and violating US sanctions on Iran.
The company has also been under fire as it faces a global US campaign to blacklist Huawei over espionage fears.
Washington has barred the Chinese networking equipment company Huawei from developing the new ultra-fast 5G mobile network in the United States and has blocked US government purchases of its services.
Defense of intellectual property in China and getting fair access to that country's markets have long been points of concern for US tech companies. They are also considered hard-to-fix problems when it come to trade between the US and China.
Meanwhile, technology has become increasingly vital to national security and economies.
Denial of the China Mobile request came as US President Donald Trump held out hopes of salvaging a trade deal with China, just hours before Beijing's negotiators were due to return to the bargaining table amid a sudden flare-up in hostilities.
Since last year, the 2 sides have exchanged tariffs on more than $360 billion in 2-way trade, gutting US agricultural exports to China and weighing on both countries' manufacturing sectors.
The International Monetary Fund also repeated its warning on Thursday that the trade battle between the world's top economies was a "threat" to global growth.
source: news.abs-cbn.com
LISBON, Portugal - Social networks need better regulation to stop them spreading "fake news" and undermining democracy, disillusioned tech pioneers said at an industry conference that closed in Lisbon Thursday.
The issue has come to the fore after the spread of false information, and allegations of Russian meddling, during election campaigns around the world.
"I think we're only 10 percent down a very long road towards making social platforms secure," Raffi Krikorian, the chief technology officer at the Democratic National Committee, said at Web Summit, Europe's largest tech event.
"I don't believe they're doing enough now," said the former Twitter executive who now leads a team of 35 people charged with protecting the US Democratic Party from computer attacks like the ones which revealed embarrassing e-mails during the 2016 presidential election.
"Hacking is one of those things we're not going to detect. If there's a hack we're not going to see it happening, whereas disinformation we see it happening every single day," Krikorian said.
'Wake-up call'
He was one of many high-profile speakers who called for more regulation of the internet and social networks at the four-day gathering dubbed "the Davos for geeks".
The inventor of the World Wide Web, British computer scientist Tim Berners-Lee, urged governments and companies to draw up a new "contract" for the web to make the internet "safe and accessible" for all.
Christopher Wylie, a whistleblower who claimed a data consultancy took millions of Facebook users' data without their knowledge to help elect US President Donald Trump in 2016, also called for greater government regulation of social media and online advertising.
He suggested data scientists should be subject to an ethical code just as doctors, nurses, and teachers are.
The 2016 Cambridge Analytica scandal was a "wake-up call", added European Commissioner for Justice Vera Jourova.
"It is time to address non-transparent political advertising and the misuse of people's personal data. In our online world, the risk of interference and manipulation has never been so high," she said.
'New code of conduct'
For Twitter co-founder Ev Williams, who now heads blogging site Medium, social media companies "are very aware of the downsides of their systems."
"I think everybody, including those running the big companies, agrees there is much more to do to protect people from misinformation and abuse," he told AFP.
"I think that's going to happen, whether or not there is government regulation. I expect there will be more, and I think it will be very difficult to figure out the right regulation."
Various efforts have been made by political leaders to curb intimidation, abuse, and misinformation on social media but many elected representatives argue that more legislation is needed to police the internet.
The founder and CEO of Web Summit, Ireland's Paddy Cosgrave, compared the "turbulence" which the tech sector is experiencing to the dangers that accompanied the arrival of the automobile.
"Our society decided that cars were globally positive but we had to protect ourselves with ruled that have not ceased to evolve. I think we also need a new code of conduct for this new digital era," he said.
source: news.abs-cbn.com
TOKYO - From clampdowns to a warm embrace, regulators in Asia have taken very different approaches to dealing with the bitcoin phenomenon. Here are the developments in a few key markets:
CHINESE CLAMPDOWN
In mid-September, China's central bank, the People's Bank of China (PBOC), told virtual currency trading platforms based in Beijing and Shanghai to cease market operations.
Authorities also clamped down on ethereum and any other electronic units that are exchanged online without being regulated by any country.
The PBOC said it wanted to fight "speculation" around the crypto-currencies, which "seriously disrupted the financial system".
This came after the National Internet Finance Association of China -- an offshoot of the PBOC -- drew up a damning report on virtual currencies, saying they were "increasingly used as a tool in criminal activities" such as drug trafficking.
Experts say Chinese authorities are also concerned about possible capital flight which could harm the value of the yuan.
However, the authorities in Beijing have not yet attacked bitcoin mining -- the creation of the digital currency.
Between 60 and 70 percent of new bitcoins are created in China.
KOREAN CONCERN
Hyper-wired South Korea was also a hotbed for virtual currencies such as bitcoin, accounting for some 20 percent of global transactions, about 10 times its share of the world economy.
But South Korean authorities late last year banned financial institutions from dealing in virtual currencies on fears of a bubble fuelled by retail speculators.
About one million South Koreans, many of them small-time investors, are estimated to own bitcoins and demand is so high that prices are around 20 percent higher than in the US.
Initial coin offerings (ICOs) -- where companies sell newly mined cryptocurrencies to investors for real money -- were also outlawed.
The government has also pledged to strengthen investor protection rules, in an effort to curb speculation and potential fraud.
Announcing the ban on ICOs in September, South Korea's Financial Services Commission declared "cryptocurrencies are neither money nor currency nor financial products".
Youbit, a South Korean exchange trading bitcoin and other virtual currencies, declared itself bankrupt in December after being hacked for the second time this year.
North Korea was accused of being behind the first attack.
SINGAPORE CAUTION
Singapore's central bank has issued a warning over cryptocurrencies, cautioning the public about the risk of jumping in on the "bitcoin bubble".
The Monetary Authority of Singapore noted they are not backed by any central bank and are unregulated, which means those who lose their investments have no grounds for redress under Singapore law.
Yusho Liu, co-founder of Singapore-based cryptocurrency wallet Coinhako, says demand has been soaring, with transactions up around 10-fold over the past year.
However, while regulators have been prepared to offer a cautious free rein to the digital units, "financial institutions and service providers have been rather resistant", Liu told AFP.
"In fact, I believe that only 30-40 percent of the market potential is fulfilled because of the friction generated by such matters. This is the key missing piece of Singapore being the fintech hub," said Liu.
JAPANESE JUMP-IN
The high-profile collapse of digital currency exchange platform MtGox failed to douse the enthusiasm for virtual currencies in Japan, which in April became the first country in the world to proclaim it as legal tender.
As many as 10,000 businesses in Japan are thought to accept bitcoin and bitFlyer, the country's main bitcoin exchange, saw its user base pass the one-million mark in November.
Many Japanese, especially younger investors, have been seduced by the idea of strong profits in the context of ultra-low interest rates that offer little in the way of returns.
However, the governor of the Bank of Japan, Haruhiko Kuroda, has recently issued a warning that the recent rise of the bitcoin price was "abnormal".
source: news.abs-cbn.com
