A thousand years ago, when money meant coins, China invented paper currency. Now the Chinese government is minting cash digitally, in a re-imagination of money that could shake a pillar of American power. @jamestareddy@TByGraceZhuon.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu It may seem money is already virtual, as credit cards and payment apps like Apple Pay and WeChat eliminate the need for bills or coins. But those just move money around electronically. China is turning legal tender itself into computer code. @jamestareddyon.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu China’s digital currency is controlled by its central bank, which will issue the new money, giving it new tools to monitor the economy and its people. By design, the digital yuan will negate one of bitcoin’s major draws: anonymity for the user. on.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu That an authoritarian state and U.S. rival has taken the lead with a national digital currency is making a wonky topic a point of anxiety in Washington. Yellen and Powell have said they are studying in earnest whether a digital dollar makes sense someday. on.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu Digitization alone won't make the yuan a dollar rival, but it could gain traction on the margins of the international finance system and soften the bite of U.S. sanctions. Ex-IMF staffer: “Anything that threatens the dollar is a national-security issue.” on.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu The money itself is programmable. Beijing has tested expiration dates to encourage users to spend it quickly, for times when the economy needs a jump-start. It’s also trackable, making it possible to collect fines as soon as an infraction is detected. on.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu In a 2019 Harvard simulation, U.S. policymakers faced a hypothetical N. Korea nuclear warhead funded with digital yuan. Because it could undercut sanctions, the participants, including many now-Biden officials, deemed it more threatening than the warhead. on.wsj.com/31MnHlB
@jamestareddy@TByGraceZhu Nicholas Burns, a longtime U.S. diplomat and a favorite to be ambassador in Beijing, told the 2019 Harvard simulation: “The Chinese have created a problem for us by taking away our sanctions leverage.” @jamestareddy on.wsj.com/31MnHlB
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Yang Jiechi to Tony Blinken: "China has made decisive achievements and important strategic gains in fighting COVID-19…China’s per capita GDP is only one-fifth of that of the United States, but we have managed to end absolute poverty for all people." bit.ly/3lvNVlv
Yang: "The United States has its style—United States-style democracy—and China has the Chinese-style democracy. It is not just up to the American people, but also the people of the world to evaluate how the United States has done in…its own democracy." bit.ly/3lvNVlv
Yang: "It is important for the United States to change its own image and to stop advancing its own democracy in the rest of the world. Many people within the United States actually have little confidence in the democracy of the United States." bit.ly/3lvNVlv
As the WHO-led coronavirus origins probe finalizes its report a month after its Wuhan mission, its constraints are becoming clear. @drewhinshaw@betswrites@JNBPage on how little power it had to conduct a thorough probe. on.wsj.com/3ttUjfW
@drewhinshaw@betswrites@JNBPage The WHO asked the U.S. to recommend experts, but didn’t contact the three that Washington put forward, though it added another U.S. scientist to the team. Beijing hasn’t publicly identified most Chinese participants or shared raw data on the first cases. on.wsj.com/3ttUjfW
@drewhinshaw@betswrites@JNBPage China resisted pressure for an investigation it saw as an attempt to assign blame, delayed the probe for months, secured veto rights over participants and insisted its scope encompass other countries as well. on.wsj.com/3ttUjfW
Matt Pottinger: "The Chinese government was not sharing useful data with anyone in the world. The World Health Organization was parroting misinformation about this virus. They…were claiming that it is not featuring significant human-to-human spread." cbsn.ws/3kco6Xe
Pottinger: "I was able to call doctors on the ground in China in late January. And they were already telling me, look…Half of the cases or more are asymptomatic. That was a different story from what the Chinese government was telling." @margbrennan cbsn.ws/3kco6Xe
@margbrennan Pottinger: "If you weigh the circumstantial evidence, the ledger on the side of an explanation that says that this resulted from some kind of human error, it far outweighs…the side of the scale that says this was some natural outbreak." @margbrennancbsn.ws/3kco6Xe
And poof. Just like that, Clubhouse—and its rare outpouring of freewheeling debate on taboo topics in the Chinese-speaking world—appears to have been cut off in mainland China. A lovely requiem for the hit Silicon Valley audio-only chat app by @xinwenfan on.wsj.com/3q4E8nR
@xinwenfan On Monday evening, Clubhouse users from Beijing to Shenzhen said their chats—some of which touched on the plight of China’s Uighur Muslims or the Tiananmen Square protests of 1989—were disconnected mid-conversation, replaced by an error message. on.wsj.com/3q4E8nR
@xinwenfan Thousands then quickly swamped newly created Clubhouse chat rooms to confirm the blockage after climbing back in using VPNs to circumvent China’s internet firewall. After trading notes, they concluded Chinese censorship was the likely culprit. @xinwenfanon.wsj.com/3q4E8nR
How can you ensure that Xinjiang factories aren't using forced labor? You can't, an increasing number of Western supply-chain auditing firms are concluding—a move that could force Western businesses doing work there to exit the region. @evawxiao on.wsj.com/2ZZkBKO
@evawxiao Five organizations—from France, Germany, Italy and two from the U.S.—have said they won’t provide labor-audit or inspection services in Xinjiang. The withdrawal of auditing groups adds to the difficulty for brands working with Xinjiang-based suppliers. on.wsj.com/2ZZkBKO
@evawxiao Auditors face a range of challenges in Xinjiang. Auditors have reportedly been detained or threatened by Chinese authorities. Auditors may have to use government interpreters who convey misinformation when they are visiting factories employing Uighurs. on.wsj.com/2ZZkBKO
Mike Pompeo: "The single rule is this: We don’t want American data in the hands of the Chinese Communist Party…It will end up in the hands of their MSS, their security apparatus, their military, their civil-military fusion programs." state.gov/secretary-mich…
Pompeo: "The transaction around TikTok, I’ve seen the outlines of it…This deal…will ensure that no American’s data has any access to anyone in China that has any capacity to move this to a place we don’t want it. We will ensure…that firewall is real." bit.ly/2FLEqye
Pompeo: "Whether there is still some Chinese ownership or they still collect a royalty check from the benefits of the business, there will be an American headquarters…controlled by Americans. And the data…will be in a place that we have confidence." bit.ly/2FLEqye