Economy

Bitcoin mining has been a huge money spinner for many people in China, not least in the less developed areas where it can be a lifeline out of poverty. While some Bitcoin miners have been put in a very difficult position with the Chinese government's recent clampdown on Bitcoin mining farms, they are not giving up yet.

With the recent tightening of regulations in China and the US, US-listed Chinese companies and those seeking to launch IPOs in the US will be faced with a path of obstacles. To save themselves further headaches and from being embroiled in US-China tensions, will they turn their attention to Hong Kong?

Chinese academic Long Yan notes that even though the US seems open to developing its economic ties with Taiwan, the latter is not a significant trading partner of the US and trade talks between them have always been used as political mileage. Long suggests that Taiwan should reconsider its currently confrontational political stance towards China, and build on close cross-strait trade relations.

The pandemic has affected BRI projects, but China has swiftly taken measures to keep BRI projects going by ensuring financial flow and supply of materials, so that key BRI projects in Cambodia and Laos are not much affected. Through the BRI, China’s economic presence and influence in Southeast Asia will continue to rise, while Cambodia and Laos will continue to rely more on China for their economic development.

While the Yangtze River Delta region comprising Shanghai and parts of Jiangsu, Zhejiang and Anhui has been seeing strong economic development, it could be more productive. Provinces with their own targets to meet have few incentives for regional integration, leaving the region as a whole less competitive. How can policies or market mechanisms be implemented to encourage more collaboration between local governments?

Peking University PhD student Xiong Lan believes that as US-China tensions ratchet up from competition to confrontation, it is likely that the process of internationalising the renminbi (RMB) will be accelerated. The next ten years will be crucial, if China is to reach targets such as for the RMB to exceed 10% market share of international currencies by 2029 and account for 30% of global reserves in the long run. What obstacles stand in the way?

Analyst Zheng Weibin notes that the clampdown on Didi shows that the competitive relationship between China and the US has affected the global interactions of tech giants, and political factors will matter more in global investments of startups in China. In the aftermath, will technological innovations such as digital manufacturing through artificial intelligence be straitjacketed?

High-speed rail and other infrastructure development have been proceeding apace under China’s Western Region Development Strategy. However, in trying to catch up with the eastern region, the gap between provinces in the western region may have inadvertently been widened. Without an effective division of labour, wasted resources and unnecessary competition are likely.

China has sought to rectify the imbalance in east-west regional development by improving connectivity and accelerating infrastructure-building in the western provinces through the Western Region Land-Sea Corridor and BRI projects. How successful they will be depends largely on continued capital injections, the region’s greater opening up and good cooperation with China’s neighbouring countries.