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CONTENTS

Moon of Alabama, April 20, 2021

A Reuters piece about a speech held by China's President Xi Jinping reveals how 'western' reporting skew the view of global issues:

China's Xi calls for fairer world order as rivalry with U.S. deepens

BOAO, China (Reuters) - Chinese President Xi Jinping on Tuesday called for a rejection of hegemonic power structures in global governance, amid growing tensions between Washington and Beijing over a widening range of issues including alleged human rights abuses.

Speaking at the annual Boao Forum for Asia, Xi criticised efforts by some countries to "build barriers" and "decouple", which he said would harm others and benefit no one.

China has long called for reforms of the global governance system to better reflect a more diverse range of perspectives and values from the international community, including its own, instead of those of a few major nations.

The bolded sentence is wrong. China has not called 'for reforms of the global governance system' but for a return to the existing global governance system that the 'west' over the last years tended to ignore. Here is the relevant section of his speech (emphasis added):

- We need consultation on an equal footing to create a future of shared benefits. Global governance should reflect the evolving political and economic landscape in the world, conform to the historical trend of peace, development and win-win cooperation, and meet the practical needs in addressing global challenges. We need to follow the principles of extensive consultation, joint contribution and shared benefits, uphold true multilateralism, and make the global governance system more fair and equitable. We need to safeguard the UN-centered international system, preserve the international order underpinned by international law, and uphold the multilateral trading system with the World Trade Organization at its core. World affairs should be handled through extensive consultation, and the future of the world should be decided by all countries working together.

To 'safeguard', 'preserve' and 'uphold' existing laws and organizations is not a 'call for reform' of the global governance system but a call for a return to its foundations which were set after the second world war. The Reuters writer pretends, like some 'western' politicians, that those foundations no longer exist.  The Reuters piece continues:

[China] has also repeatedly clashed with the biggest stakeholders in world governance, particularly the United States, over a range of issues from human rights to China's economic influence over other countries.

"The world wants justice, not hegemony," Xi said in remarks broadcast to the forum.

"A big country should look like a big country by showing that it is shouldering more responsibility," he said.

While Xi did not identify any country in his remarks, Chinese officials have in recent times referred to U.S. "hegemony" in public criticisms of Washington's global projection of power in trade and geopolitics.

Who, please, are 'the biggest stakeholders in world governance'? While the US might be a 'big stakeholder' China is by population size and economic power a way bigger one. And who are the other 'biggest' besides the U.S.? India and Russia may come to mind but both have offered the same critic about a 'western' centric system as China does.The above Reuters snippet also leaves out the most central quote from Xi's speech (emphasis added):

We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world. What we need in today’s world is justice, not hegemony. Big countries should behave in a manner befitting their status and with a greater sense of responsibility. We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world. What we need in today’s world is justice, not hegemony. Big countries should behave in a manner befitting their status and with a greater sense of responsibility. 
Reuters also includes this slight: As the Biden administration rallies other democratic allies to harden their stance on China, Beijing is seeking to strengthen ties with its autocratic partners and economically dependent neighbours in Southeast Asia.

It is a rhetorical trick to put the U.S. into the corner of 'democracy' and to associate China with 'autocratic partners'. For one - many of the U.S. 'partners', especially in the Middle East, are 'autocratic' ones or even worse. China itself is a democracy:

Elections in China are based on a hierarchical electoral system, whereby local People's Congresses are directly elected. All higher levels of People's Congresses up to the National People's Congress (NPC), the national legislature, are indirectly elected by the People's Congress of the level immediately below.

The Boao forum is not Chinese, it is international. It was initiated by former leaders of the Philippines, Australia and Japan - all three democracies. The 26 founding countries of 'Asia's answer to Davos' are mostly democracies. In his speech Xi Jinping lists democracy as a 'common value of humanity':

We must advocate peace, development, equity, justice, democracy and freedom, which are common values of humanity, and encourage exchanges and mutual learning among civilizations to promote the progress of human civilization.

To purpose of the Boao forum is not to peddle to autocrats. Unless of course one counts the high profile U.S. businessmen who are taking part as such:

A slew of U.S. business leaders will be participating in the conference, including Apple Inc.’s Tim Cook, Tesla Inc.’s Elon Musk, Blackstone Group Inc’s Stephen Schwarzman and Bridgewater Associates’ Ray Dalio.

To sum up: The Reuters piece about Xi's speech at Boao is framed with a 'western' mindset and colored by 'western' hegemonic ideology. It leaves out the essence of the speech then adds bits that make the reader assume that the high level international event is a solely Chinese one, thereby disturbing its context. It does not inform but propagandizes. Read full article at Moon of Alabama →

A Middle East in Motion

Alastair Crooke

U.S. sanctions are easily done, but not easily undone – even temporarily. Lifting them completely is institutionally almost impossible. If we view the Middle East as a complex network system, it is possible to discern a number of dynamics that now are touching on their potential to shift the regional matrix entirely – to put it on a fresh path. Some of these ‘seeds’ were sown, a while past: President Putin, in 2007 at Munich, told the largely western audience that the West had taken an adversarial stance toward Russia, challenging it. ‘Ok’, said Putin: We accept the challenge, and we shall prevail. His statement was met with open derision from the Munich audience.

Now, many years later, following the contentious exchanges at Anchorage, Putin’s riposte has emerged fully-fledged: China told Washington flatly, that it refused the imposition of western values and hegemony. China thus accepted, with Russia, the ‘western challenge’: It had its own values and vision that it intended to pursue, and noted that the U.S. was in no position of strength to demand otherwise. China (or Russia) does not seek war with the U.S. – nor want Cold War, either – but both stand steadfast by their ‘red lines’. They should be taken literally (i.e. they were no ‘posture’), China indicated.

Two days later, the Chinese FM and Lavrov advised other states not even to contemplate siding with the U.S. against the Russia-China concerted ‘team’; it would be pointless. A few days later Wang Li was in the Middle East – Saudi Arabia, UAE and then Tehran. The message was uniform: throw off the yoke of hegemony; resist ‘pressures’ on human rights issues; and embrace your own sovereignty. A Rubicon crossed.

In Iran, FM Wang Li signed-up, in principle, to $400bn in transport and energy infrastructure projects. From the perspective of China, a Eurasian spider’s web of inter-connecting rail tracks and pipelines potentially slashes the costs of transportation; creates new markets – whilst investment in Iranian energy gives China energy security.

The Chinese-Iranian roadmap however, also envisages security co-operation (with China endorsing Iranian full membership of the SCO), joint naval exercises, intelligence sharing, and more. Even more significant perhaps will be Iran’s incorporation into the Eurasian Digital Silk Road, incorporating telecommunications, fibre optic cabling from China to France, 5G, ‘Smart City’ AI systems, digital payment platforms (U.S. hedge fund manager Kyle Bass argues that China’s digital payment systems will reach an estimated 62% of the world’s population), cloud storage analytics, and ‘sovereign’ internet structures.

Iran, although not yet a part of the Digital Road, effectively is already (loosely) digitally ‘Chinese’, as is much of West Asia. Some estimatessuggest that one-third of the countries participating in BRI—138 at this point—are cooperating on DSR projects.

Western narratives generally overestimate the extent to which DSR-related projects are part of a coordinated Chinese strategy. Projects lumped under DSR however, are largely private sector-driven, and allow Chinese companies to take advantage of policy support provided under the DSR brand (a type of franchise), while responding to growing demand in BRI countries for digital infrastructure. Until recently, BRI was understood largely in the more traditional mode (i.e. railways and pipes), than as a digital ‘road’; but it is the latter that ultimately will separate a ‘Chinese standards Eurasia’ from the West.

Just to be clear, whichever way you slice the RBI snakes and ladders matrix of interconnectivity – either, east-west, or north-south – Iran lies plumb-centre on the map. The point here is that much of the northern tier of the Middle East – from Pakistan to the Caspian, to the Black Sea to the Mediterranean and Europe – is on Moscow and Beijing’s drawing board.

As the physical and digital network emerges from its chrysalis, no Gulf State will be able wholly to disregard this unfolding geo-political entity stretching from Vladivostok to Xingjian. In fact, they are not; they are cautiously (mindful of Washington’s ire), extending tentacles out to Moscow and Beijing (Saudi and UAE are already on the DSR) – but they seem unlikely to go the whole hog of the full engagement, as Iran has done with China. How long it is viable to juggle both Chinese protocols and standards with those of the West, is an open question – eventually duplication of standards becomes clumsy, and expensive. Read full article $ →

Xi Jinping Keynote Speech at the Boao Forum for Asia Conference:
 

Op/Ed by Chris Devonshire-Ellis  

President Xi Jinping gave the opening, keynote speech at the Boao Forum for Asia Conference 2021 yesterday. The Boao Forum includes Australia, Bangladesh, Brunei, Cambodia, China, India, Indonesia, Japan, Iran, Israel, Kazakhstan, Kyrgyzstan, Laos, Malaysia, Maldives, Mongolia, Myanmar, Nepal, New Zealand, Pakistan, The Philippines, South Korea, Singapore, Sri Lanka, Tajikistan, Thailand, Turkmenistan, Uzbekistan, and Vietnam. 

The Boao Forum is a non-profit organization that hosts high-level forums for leaders from government, business and academia in Asia and other countries to share their vision on the most pressing issues in the Asian region and the world at large. About 60 diplomats from 35 countries attended the Forum, which is held annually in Boao in China's Hainan Island Province. President Xi's complete speech, interspersed at intervals with my own comments in italics and useful links, follows: 

Xi: "Pulling Together Through Adversity and Toward a Shared Future for All"  

Dear Friends,  

'True friendship brings people close however far apart they may be.' 

It gives me great pleasure to attend the Boao Forum for Asia Annual Conference 2021 and meet you all in this cloud meeting. Let me begin by extending, on behalf of the Chinese government and people and in my own name, a warm welcome to all the guests participating both in person and online, and cordial greetings and best wishes to all friends old and new.  

This year marks the 20th anniversary of the Boao Forum. Over these two decades, Asian countries have advanced regional economic integration and worked in unison to pursue both economic and social development, which has turned Asia into the most vibrant and promising region in the global economy. Asia has also stood with the rest of the world in the face of terrorism, the Indian Ocean tsunami, the international financial crisis, COVID-19, and other traditional and non-traditional security threats, which has helped maintain stability and security in the region. As an important member of the Asian family, China has kept deepening reform and opening-up while promoting regional cooperation, thus achieving progress and development in tandem with the rest of Asia and the world. It is fair to say that this Forum has borne witness to the extraordinary journey of China, of Asia and of the world, and has exerted a significant influence in boosting development in Asia and beyond.  

This year’s annual conference is convened against a very special background. The theme of the conference - “A World in Change: Join Hands to Strengthen Global Governance and Advance Belt and Road Cooperation” - is most opportune and relevant under the current circumstances.  

Now, the combined forces of changes and a pandemic both unseen in a century have brought the world into a phase of fluidity and transformation. Instability and uncertainty are clearly on the rise. Humanity is facing growing governance deficit, trust deficit, development deficit, and peace deficit. Much remains to be done to achieve universal security and common development. That said, there is no fundamental change in the trend toward a multi-polar world; economic globalization is showing renewed resilience; and the call for upholding multilateralism and enhancing communication and coordination has grown stronger. While we live in an age rife with challenges, it is also an age full of hope.  

Where should humanity go from here? What kind of future should we create for future generations? As we try to answer these important questions, it is crucial that we bear in mind the shared interests of mankind and make responsible and wise choices.  

China calls on all countries in Asia and beyond to answer the call of our times, defeat the pandemic through solidarity, strengthen global governance, and keep pursuing a community with a shared future for mankind. 

• We need consultation on an equal footing to create a future of shared benefits. Global governance should reflect the evolving political and economic landscape in the world, conform to the historical trend of peace, development and win-win cooperation, and meet the practical needs in addressing global challenges. We need to follow the principles of extensive consultation, joint contribution, and shared benefits, uphold true multilateralism, and make the global governance system fairer and more equitable. We need to safeguard the UN-centered international system, preserve the international order underpinned by international law, and uphold the multilateral trading system with the World Trade Organization at its core. World affairs should be handled through extensive consultation, and the future of the world should be decided by all countries working together. We must not let the rules set by one or a few countries be imposed on others, or allow unilateralism pursued by certain countries to set the pace for the whole world. What we need in today’s world is justice, not hegemony. Big countries should behave in a manner befitting their status and with a greater sense of responsibility."  

•  We will build a closer partnership for health cooperation. Chinese businesses have already started joint vaccine production in BRI participating countries such as Indonesia, Brazil, the United Arab Emirates, Malaysia, Pakistan, and Turkey. We will expand cooperation with various parties in infectious disease control, public health, traditional medicine, and other areas to jointly protect the lives and health of people in all countries. 
• We will build a closer partnership for connectivity. China will work with all sides to promote “hard connectivity” of infrastructure and “soft connectivity” of rules and standards, ensure unimpeded channels for trade and investment cooperation, and actively develop Silk Road e-commerce, all in a bid to open bright prospects for integrated development.  
   
• We will build a closer partnership for green development. We could strengthen cooperation on green infrastructure, green energy, and green finance, and improve the BRI International Green Development Coalition, the Green Investment Principles for the Belt and Road Development, and other multilateral cooperation platforms to make green a defining feature of Belt and Road cooperation.  
• We will build a closer partnership for openness and inclusiveness. A World Bank report suggests that by 2030, Belt and Road projects could help lift 7.6 million people from extreme poverty and 32 million people from moderate poverty across the world. We will act in the spirit of openness and inclusiveness as we work with all willing participants to build the BRI into a pathway to poverty alleviation and growth, which will contribute positively to the common prosperity of humankind."

Devonshire-Ellis: Xi turns salesman here, looking to attract foreign investment. He specifically refers again to trade and investment, while mentioning the improved China Foreign Investment Law, and reduced Negative Investment List, both of which further open the Chinese domestic market to Foreign Investors, and which I explained the significance of in this article here.  Xi then promotes the Hainan Free Trade Port - which offers market access and other incentives to foreign investors which go even further in allowing participation in industry sectors overwise off-limits on the mainland, such as medical tourism and importation of foreign pharmaceuticals not permitted elsewhere in the PRC. Our overview of opportunities in these sectors in Hainan can be viewed here  and here. 

Summary: President Xi Jinping has effectively introduced himself as a true world leader, able to share China's success with the rest of the world. He has highlighted the currently differing capabilities of China and the United States in showing global responsibility, and especially within the ability for China to engage in vaccine distribution and regional healthcare development. That has been supported by China's continuing to develop infrastructure as part of the Belt and Road Initiative, and to continue to develop trade agreements as part of a tariff and barrier reducing global network. That is a capitalist methodology being attached to socially responsible human development agenda. It is in fact a liberal approach to diplomatic engagement, rather than a communist one. 

It remains to be seen how the United States will respond. But with Washington increasingly suffering from image problems related to trade and global cooperation belligerence, and overuse of sanctions, Xi currently has the upper hand, while in global terms Biden appears remote, elderly, and unreachable. The United States especially has a lot of catching up to do. Read the speech.

Chris is the Founding Partner of Dezan Shira & Associates and has a 30-year career advising foreign investors in Asia. He may be contacted at chris@dezshira.com. His new book, "Identifying Opportunities Within the Belt & Road Initiative" has just been published and may be downloaded for free from the Asia Briefing bookstore here.

Timeline of Digital RMB

by Yang Liu, founder of Beijing Channel. Subscribe now

Note: 1: items listed in this timeline are quoted from here unless otherwise linked.

Note 2: the text is sourced from a wide range of media/websites, which may follow different editorial practices, your host did his best to mend the gaps, and apologize in advance if any editorial inconsistencies were missed. 

• 2014: With the support of then People’s Bank of China (PBoC) governor Zhou Xiaochuan, the PBoC launched a research group tasked to develop China’s official digital currency.

• Early 2015: The PBoC expands the research group, the research group reportedly conducted serious research into the operational structure of digital currency issuance, the core technology of digital currency, the circulation environment of digital currency, legal issues facing digital currency, potential impact digital currency may have on the financial system, the relationship between official and private digital currency, and experience from other countries on issuing digital currency. The research has reportedly yielded some results.

• Sometime 2015. A series of PBoC research reports were formulated on digital currency, and the PBoC’s plan for issuing an official digital currency has undergone two rounds of editing.

• Jan.20, 2016: The PBoC holds a digital currency forum in Beijing, during which the goal of developing China’s official digital currency was first publically announced. The PBoC research group stated that it was their goal for speedy issuance of digital currency.

• Feb.25, 2016: Zhou Xiaochuan tells the media that there are no timetables for issuing China’s digital currency and that it may take as long as a decade to transit from one version of RMB to the next. He says: For a very long time, digital currency and cash will be used in parallel, and cash will be gradually phased out. The transaction cost of cash will slowly rise in the later period, for example, banks offered coin counting service for free, but in the future, that may change. With incentives, people will naturally use digital currency more often, though the two will still coexist for a prolonged period.

• Nov. 9, 2016: The PBoC lists job openings on its official website for digital currency development talents, such as those who hold doctoral or postgraduate degrees in computer, information security, and encryption major.  The job descriptions for the openings are 1) architectural design and development of software and hardware for digital currencies and related underlying platforms, 2) The research of key cryptographic technologies used in digital currencies, symmetric and asymmetric cryptographic algorithms, authentication, and encryption.

• Jan. 29, 2017: The central bank officially establishes the Digital Currency Research Institute (DCRI). After the successful development of prototype digital currency, the institute is cooperating with institutions and industries in Nanjing, Shenzhen, among other places, to put the result of financial technology research into application. The R&D of the PBoC's digital currency is currently managed by the Currency, Gold, and Silver Bureau of the PBoC.

• Feb. 1, 2017. The blockchain-based digital currency trading platform promoted by the PBoC has been successfully tested, and the official digital currency issued by the PBoC has been piloted on the platform.

• March 24, 2017: PBoC Deputy Governor Chen Yulu tells the media that as the next step, fintech’s impact on personal asset safety, privacy protection, global financial stability, and global financial governance structure needs to be thoroughly studied. 

• May 27, 2017: Yao Qian and Di Gang were named director and deputy director of the DCRI. Yao Qian was a former PBoC official, while Di Gang was previously the CTO of Silk Road Fund.

• June 8, 2017. Five ministries of the central gov’t issue financial standardization development plan for the 13th five-year plan, in which it was stated that Continue to promote international standardization of finance, and strive to lead the development of one to two international standards in key areas such as mobile financial services, non-bank payments, digital currency.

• Jan. 25, 2018: Fan Yifei, Deputy Governor of the PBoC, publishes a signed article in which he made several arguments for the path the future digital currency should pursue. They are:First, China's central bank digital currency should adopt a two-tier delivery system. Second, under the two-tier placement system arrangement, China's central bank digital currency should be placed in a loosely coupled way with accounts and adhere to a centralized management model. Third, the design of China's central bank digital currency at this stage should focus on M0 substitution instead of M1 and M2 substitution. Fourth, A cautious attitude should be maintained towards the loading of smart contracts with the central bank digital currency.

• March 28, 2018 The PBoC held a national monetary and financial work teleconference of 2018, which stated, Steadily promote the research and development of the central bank's digital currency.

• April 3, 2018: Sun Guofeng, the director of the PBoC Financial Institute，a think tank-like organization affiliated with the PBoC, wrote in a PBoC working paper that digital currency can make it easier for the central bank to adopt a negative interest rate.

• Feb. 22, 2019: The PBoC held a national monetary and financial work conference of 2019, which stated: Deepening the research and development of the central bank's digital currency. Note: notice the change of verb from “steadily” to “deepening” in one year’s time, signaling that the development of digital currency is picking up pace in 2019.

• Aug.2, 2019: The PBoC holds working teleconference for the second half of 2019, stating. Accelerate the pace of research and development of China's digital currency (DC/EP), and study the development trend of virtual currencies at home and abroad, and continue to strengthen the regulation of Internet financial risks.Note: Half-year after the previous meeting, the verb has changed to “accelerate”. *DC/EP stands for Digital Currency Electronic Payment

• Sept.24, 2019: Yi Gang, PBoC Governor, further revealed some features of the future digital currency.The development of China's central bank digital currency has made positive progress, and it is proposed to combine the central bank digital currency with electronic payment instruments. The goal of the central bank's digital currency is to replace a portion of M0 (cash), not to replace M1 or broad money M2. The central bank digital currency adopts a two-tier operating system of the central bank and commercial banks, which does not change the current money delivery path and system. There is no timetable for the launch of the central bank's digital currency, and there will be a series of research, testing, piloting, evaluation and risk prevention processes to be carried out. The central bank's digital currency will adhere to centralized management, and there is no predetermined technical route in the research and development work. It can be selected on the basis of fair competition in the market, and can consider both blockchain technology and new technology evolved on the basis of existing electronic payment, fully mobilizing the market's enthusiasm and creativity.

• Oct. 28, 2019: Huang Qifan, former mayor of Chongqing, said the PBoC may be the first central bank to roll out a digital currency. He said, ThePBoC has been working on DC/EP for five or six years and I think it is maturing. The PBoC is likely to be the first central bank in the world to launch a digital currency.

• Nov. 28, 2019: Fan Yifei, deputy governor of the PBoC, said at a forum that the central bank's digital currency DC/EP has basically completed top-level design, standard development, function research and development, and joint testing under the premise of adhering to double-layer placement, M0 replacement, and controlled anonymity. The next step will be to reasonably select pilot verification areas, scenarios, and service scope guided by the principles of steady, safe and controllable. And also continuously optimize and enrich DC/EP functions, and steadily promote the introduction and application of digital forms of legal tender.

• Dec.9, 2019: According to media reports, a pilot program to try digital currency in real-life settings has been slated. The central bank's legal digital currency pilot project, led by the People's Bank of China, with the participation of the four state-owned commercial banks of ICBC, ABC, BOC and CBC, and the three major telecom operators of China Mobile, China Telecom and China Unicom, is expected to land in Shenzhen and Suzhou. The pilot will be different from the previous pilot, and will go out of the central bank system and into real service scenarios such as transportation, education, and medical care to reach consumer and generate frequent applications. According to people close to the pilot project team, the pilot (Shenzhen digital currency pilot) is planned to be divided into two phases, the end of this year is phase I, where the currency is tested in small range of scenarios, next year for phase II, the currency will be promoted throughout Shenzhen.

• March 3, 2020: At a seminar held by the National Development and Reform Commission, more than 10 experts came to the consensus that the epidemic may speed up China’s push to roll out its digital currency. The epidemic is a catalyst for the digital economy, and rapid, comprehensive, and accurate data collection and analysis are a prerequisite for efficient decision-making. In the post-epidemic period, China will likely increase investment and procurement efforts. The central bank's digital currency may be accelerated and become a special "special fund", the flow of which can be managed.

• April 3, 2020: The PBoC holds national currency, gold and silver, and safety teleconference, during which “Strengthen top-level design and unswervingly promote the research and development of digital currency" (加强顶层设计，坚定不移推进法定数字货币研发工作) was listed as a top priority.

• April 17, 2020: Xinhua News Agency quoted an official with the PBoC DCRI as saying that the digital currency will first be tested in closed settings in Shenzhen, Suzhou, Xiong’an, Chengdu, and Winter Olympic facilities. The official also said testing the digital currency in closed settings does not affect normal RMB circulation.

• July 8, 2020: Chinese ride-hailing company Didi Chuxing announced that it has signed a strategic cooperation agreement with the PBoC DCRI, and both sides will conduct research on how to implement the digital currency in rideshare service settings.

• July 16, 2020: Media reports that the PBoC is mulling testing the digital currency on Chinese delivery platform Meituan. Other businesses that are actively seeking to play role in the rolling out of the digital currency includes video-sharing website BiliBili, Bytedance, China Postal Savings Bank of China, and Bank of Communications.

• July 22, 2020: The government of Fuzhou, Fujian Province, said it is actively applying to be one of the hosts for second wave testing of the digital currency.

• Aug. 15, 2020: Xinhua News Agency quotes a source from the PBoC as saying “If everything works well, the public may have a chance at seeing the digital currency’s true face.”

• Sept.21, 2020: Chinese e-commerce company JD.com announces a strategic cooperation deal is reached with the PBoC’s DCRI, saying both sides will join hands in innovating mobile applications for the digital currency, paving the way for the implication of digital currency in cyber and real-life settings, and expand the digital currency’s wallet ecosystem.

• Oct.9, 2020 (Eng): The government of Shenzhen says it is handing out 50,000 red packets containing a total of 10 million digital RMB to local residents via a random draw.

• Oct. 17, 2020: A newspaper affiliated with Xinhua News Agency says despite enjoying advantages over third-party paying apps such as Alipay and Wechat, digital RMB is unlikely to shake their market share dominance.

• Oct.20, 2020: After nearly a week of the digital RMB pilot program in Shenzhen, Xinhua ran a story recounting its rollout. The report said a total of 47573 individuals successfully collected their red packets of 200 digital yuan each, and spend a total of 8.764 mln yuan through 62788 transactions. To support the pilot program, a total of 3389 businesses upgraded their cashier system to adapt to the digital RMB at no extra cost.  Consumer Zhao Quanhai, who was interviewed in the story, commented that the experience was similar to using Alipay or Wechat Pay, but the internet environment was unnecessary. Zhao said it was “smooth and fast.”

• Oct.24, 2020: The PBoC releases a draft to amend the People’s Bank of China Law of the People’s Republic of China and is seeking comments from the public. One of the changes proposed was to state RMB can be issued in physical or digital form, that no organization or individual may manufacture, distribute digital currency that serves as an alternative to the RMB.  The report cites a PBoC source as saying that the amendment would provide legal provision for the rolling out of the digital currency.

• Oct. 30, 2020: Huawei unveils its Mate 40 smartphone, dubbing it as the first smartphone that supports the digital currency wallet function.

• Nov.21, 2020: Chinese President Xi Jinping said that G20 members should explore the formulation of standards and principles on legitimate digital currencies in an open and inclusive manner.

• Dec.4, 2020 (Eng): The city of Suzhou announces it is launching a digital RMB trial by handing out 20 million yuan worth of red packets to 100,000 residents via a lottery draw. The report says almost 10,000 businesses are equipped to receive digital RMB, and it will also be the first time for consumers to shell out their digital cash online, through the e-commerce platform JD.com

• Dec.29, 2020: Digital RMB made available to use on the Beijing Daxing International Airport express train. Foreign nationals may also experience the digital RMB upon their visit during the 2022 Winter Olympics.

• Feb.7, 2021 (Eng): Beijing government hands out 50,000 red packets containing 10 million digital RMB via a lottery draw

• Feb. 24, 2021 (Eng): The PBoC’s DCRI says it is joining hands with the central banks of Thailand, UAE, as well as financial regulators in Hong Kong, to explore the application of digital RMB in cross-border transactions.

• March 13, 2021: China’s 14th five-year plan includes language that echos Xi’s remarks during a G20 summit in Nov. 2020. It says China should Actively participate in the development of international rules and digital technology standards for data security, digital currency, digital tax, etc.

• April 8, 2021: Per Xinhua, Shanghai banks have begun accepting applications for digital RMB wallets. Customers may put in a request that is subject to review by the PBoC, and if the application is approved, the customer may begin using the digital wallet. The application process takes from 2-3 workdays to 1-2 wks.

  Beijing Channel is penned by Yang Liu. Subscribe now

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