2014-03-20

Latest on Yuan and Taiwan; Chinese Netizens Reflect on Crimea

Falling Yuan Curbs Cash Entering China
Foreign money entering China fell to a five-month low of $21.1 billion in February, according to central-bank data released this week. The total compares with $72.3 billion in January.
If you believe the move lower (at least initially) was orchestrated by the PBOC, then, it worked.

Another worry has been financial derivative products that allow companies to profit from yuan appreciation but turn sour if the currency drops. Analysts say that some companies are already losing money as the yuan falls and that the losses could mount rapidly if the yuan weakens to 6.20 to the dollar in the offshore market.

"These structured FX products have been sold by banks to—usually—SMEs in China and Taiwan," with the latter betting on continued gains in the offshore yuan, Dariusz Kowalczyk, a senior economist and strategist at Crédit Agricole, said Tuesday, referring to small and medium-size enterprises.

"For most of the structures, banks no longer make payments to corporates at [offshore yuan versus U.S. dollar] levels above 6.15, where we are right now, and clients are exposed to unlimited, leveraged losses north of 6.20," he said.
That happened today.

That the Chinese themselves are betting on yuan appreciation adds yet another pro-cyclical element in China's Volatility Machine. China is leveraged to itself.

As for Taiwan. The youth are pro-independence, with the pro-China KMT demographic aging.

Hundreds of students occupy Taiwan's Legislature to protest China pact
Hundreds of students remained barricaded in Taiwan's Legislature early Wednesday in protest of the ruling party's push for a trade pact with China, which demonstrators claim will hurt the island.

The protesters, mostly university students, entered the main assembly hall inside the Legislative Yuan in Taipei on Tuesday night and blocked the entrances with chairs, according to images and accounts filed from the scene with CNN iReport.

Police responded but had not dispersed the protesters, who also filled the streets around the Legislature in the center of Taipei.

The students said they plan to occupy the Legislature until Friday's session, when the pact was to be deliberated.

Taiwan's state news agency reported that 38 police officers were injured when more than 400 protesters took over the Legislature.

....."The trade agreement was not supervised by the people of Taiwan, and benefits only big companies and harnesses our jobs," Chang wrote. "But I do agree we need to open Taiwan to the world, even China too. But NOT this way, not by signing an agreement that is not fair to us and was negotiated by people who have no profession in these territories. We must rewrite the agreement and make it work for the both of us, towards a peaceful future between the strait of Taiwan."
This will become a source of tension in the coming years, perhaps soon if the DPP return to power in 2016.

Netizens Compare Lost Chinese Territory to Crimea Crisis
But sadly, the sound of cannons in the October Revolution brought Marxism to China, along with the Soviet Red Army. In 1921, the Soviet Red Army under the guise of pursuing White Russian forces, forcefully entered Tannu Uriankhai, while the White Russian army was destroyed, so was our “Tannu Uriankhai”.

In March of 1921, under the intervention and manipulation of the Soviet Red Army, Tannu Uriankhai held a “pseudo-referendum”, the result predictable, and in 1921 August, Tannu Uriankhai declared independence. In December, it changed its name to Tannu Tuva and later in 1926 it changed its name to the “Tuvan People’s Republic”. Although the Soviet Union repeatedly promised it would not make the “Tuvan People’s Republic” their own territory, in 1944 August 17, the “Tuvan People’s Republic” asked the Soviet Union to take control of Tannu Uriankhai, which made it no longer a problem, because it was not Soviet Russia that wanted to take them but “them” voluntarily delivering themselves [to Russia]. The Soviet Union naturally accepted the “request”. On the 13th of October, the “Tuvan People’s Republic” officially became the “Tuvan Autonomous Soviet Socialist Republic”, and to this day it remain an “inseparable part of Russian territory”, its name now: “The Tyva Republic under the Russian Federation”.

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