Two separate Posts this morning.
First – the RMB has rallied to its highest level in more than 2 years + has wiped out most of the losses suffered since start of Trump Trade War.
Investors jumped into China as a gap opened between onshore interest rates in China and those in US/Europe where central banks cut rates to record lows.
Other factors: China’s improving current account position + investors turning away from the dollar. But the big one – and unnoticed – is Beijing announcement to increase the influence of the Euro in determining daily mid point fix at expense of dollar. The China/EU Investment Treaty taking effect.
Second – Something of significance that may be missed. Mitsui and China’s Tencent are setting up a JV to help Japanese companies to market their goods + services in China. The purpose? – to replace sales lost in Japan from the absence of Chinese inbound tourists.
The new business will produce + promote e-commerce shops, advertisements and video contents on Tencent’s WeChat platform on behalf of clients of Japanese companies.
Chinese tourists were big spenders until Covid-19 imposed border restrictions which significantly reduced Chinese tourist numbers.
Re Trump efforts to reduce China trade, Mitsui say the new service would not involve collecting personal information.
Pause for a moment and consider the enormous difference between China Today and USSR Yesterday. More Reds In The Bed than Reds Under The Bed – you may think.
