Connect with us

News

China Increases Use of Yuan to Buy Russian Commodities, Driving Currency Internationalization

China Increases Use of Yuan to Buy Russian Commodities, Driving Currency Internationalization

(CTN News) – Multiple trading executives told Reuters that China has significantly increased its use of the yuan rather than the U.S. dollar in the past year when purchasing Russian commodities. This includes nearly all of China’s purchases of oil, coal, and some metals from its neighbor.

Although strong capital controls are expected to limit its global influence in the near term, China’s efforts to internationalize its currency have been accelerated by the switch to yuan to pay for much of an approximately $88 billion commodities trade in the wake of the Ukraine war.

The Growing Role of Yuan: China Buys Russian Commodities in Its Currency, Moving Away from the Dollar

Although its share as a global payments currency remains small at 2.5% according to SWIFT, compared to 39.4% for the dollar and 35.8% for the euro, official data showed that in March, the yuan – also known as the renminbi – became the most widely used currency for cross-border transactions in China, overtaking the dollar for the first time.

Hong Kong-based senior investment strategist Chi Lo anticipates a long-term “snowball effect” as more nations join the “RMB bloc” to limit risks of dollar exposure, “especially after they’ve seen what the U.S.-led sanctions against Russia have done,” Lo said.

He continued that this trend will continue for “one or two, even three decades.”

“I think the trade using RMB will predominantly be used for commodity and energy trade for now and the foreseeable next few years.”

Since most international oil, gas, copper, and coal trading is priced off dollar-based benchmarks, the yuan has only been used infrequently in large Chinese commodities purchases despite Beijing’s push to internationalize the yuan beginning over a decade ago.

As sanctions against Russia increased after Moscow invaded Ukraine, western consumers began shunning Russian goods last year. In 2022, the value of China’s commodity imports from Moscow increased by 52% thanks to a surge in demand for discounted crude oil, coal, and aluminum.

Those purchases are expected to increase this year as China’s economy rebounds from the effects of the COVID lockdowns, which helped save the country billions of dollars.

China’s counterpart to SWIFT, the Cross-Border Interbank Payment System (CIPS), saw total settlements increase 21.5% year-over-year in 2022, reaching 96.7 trillion yuan ($14.02 trillion), according to data from the Chinese central bank.

Five trading executives with firsthand knowledge of the situation told Reuters that the yuan is now used to settle nearly all of China’s oil imports from Russia, principally crude but also lesser volumes of fuel oil.

According to Chinese customs data, China bought crude oil and fuel oil from Russia for $60.3 billion last year.

Given the delicate nature of the situation, none of the executives were willing to be named.

A representative from the People’s Bank of China did not immediately respond.

The yuan is becoming increasingly popular around the world. To relieve strain on its dollar reserves, Argentina announced this month that it would begin paying for Chinese imports in yuan. France’s TotalEnergies supplied China with the first yuan-settled LNG cargo in March.

After Russia’s February 24 invasion of Ukraine, which Moscow terms a “special military operation,” important Russian banks were removed from SWIFT, and the transition began in April 2022.

Traders reported that cash-strapped independent refiners had difficulty obtaining trade finance in dollars when banks outlawed the industry. This was because the telegraphic transfer is the equivalent of cash pre-payment.

After the United States issued an import ban and Europe tightened restrictions on Russian exporters, Europe enacted a trade embargo on December 5, capping the price of Russian oil exports, and causing the Yuan settlement to soar.

Since the price cap, “all seaborne Russian oil sales to China are now settled in renminbi, sidelining the last small number of banks that were handling U.S. dollars,” said one trading executive.

Under the price cap regime, dealing in US dollars becomes extremely difficult. According to the source, “it means a lot more compliance work for the banks.”

While China is against unilateral sanctions, it is understandably concerned about being hit with secondary measures.

Russia’s central bank reported in March that by 2022, the yuan would account for 23% of import settlements in Russia, up from 4% in 2020.

Russia’s Deputy Prime Minister Alexander Novak stated last month that Moscow would continue to accept additional payments for energy exports in roubles and yuan as part of its strategy to wean itself off the dollar and the euro.

The Yuan’s Ascendancy: China’s Shift in Russian Commodity Payments Spurs Currency Globalization

According to Russian President Vladimir Putin, two-thirds of trade between Beijing and Moscow is reportedly settled in roubles or yuan.

China’s trade imbalance with Russia reached $38 billion last year due to rising commodity imports, while the gap has reduced during the first four months of 2023.

It has not always been easy to switch over to yuan transactions.

According to a senior source familiar with the deal, state energy behemoth CNPC worried for months last year that its piped gas supplies from Russia’s Gazprom could be stopped as Chinese lenders ICBC and Bank of China looked to abandon the company out of concern of secondary sanctions.

There was silence in response to inquiries made to ICBC and the Bank of China.

According to the source, CNPC had trouble paying Gazprom in dollars for almost six months before the Bank of Communications took over and switched to renminbi payments.

Neither Bank of Communications nor CNPC would make a statement.

In September last year, Gazprom claimed it had agreed with CNPC to settle gas transactions in roubles and yuan.

In September, a Gazprom employee, Alexei Konivetsky, said the company has experienced difficulties receiving payments from China because “numerous Chinese banks are afraid of secondary sanctions while working with us.”

 

News

Google’s Search Dominance Is Unwinding, But Still Accounting 48% Search Revenue

Google

Google is so closely associated with its key product that its name is a verb that signifies “search.” However, Google’s dominance in that sector is dwindling.

According to eMarketer, Google will lose control of the US search industry for the first time in decades next year.

Google will remain the dominant search player, accounting for 48% of American search advertising revenue. And, remarkably, Google is still increasing its sales in the field, despite being the dominating player in search since the early days of the George W. Bush administration. However, Amazon is growing at a quicker rate.

google

Google’s Search Dominance Is Unwinding

Amazon will hold over a quarter of US search ad dollars next year, rising to 27% by 2026, while Google will fall even more, according to eMarketer.

The Wall Street Journal was first to report on the forecast.

Lest you think you’ll have to switch to Bing or Yahoo, this isn’t the end of Google or anything really near.

Google is the fourth-most valued public firm in the world. Its market worth is $2.1 trillion, trailing just Apple, Microsoft, and the AI chip darling Nvidia. It also maintains its dominance in other industries, such as display advertisements, where it dominates alongside Facebook’s parent firm Meta, and video ads on YouTube.

To put those “other” firms in context, each is worth more than Delta Air Lines’ total market value. So, yeah, Google is not going anywhere.

Nonetheless, Google faces numerous dangers to its operations, particularly from antitrust regulators.

On Monday, a federal judge in San Francisco ruled that Google must open up its Google Play Store to competitors, dealing a significant blow to the firm in its long-running battle with Fortnite creator Epic Games. Google announced that it would appeal the verdict.

In August, a federal judge ruled that Google has an illegal monopoly on search. That verdict could lead to the dissolution of the company’s search operation. Another antitrust lawsuit filed last month accuses Google of abusing its dominance in the online advertising business.

Meanwhile, European regulators have compelled Google to follow tough new standards, which have resulted in multiple $1 billion-plus fines.

google

Pixa Bay

Google’s Search Dominance Is Unwinding

On top of that, the marketplace is becoming more difficult on its own.

TikTok, the fastest-growing social network, is expanding into the search market. And Amazon has accomplished something few other digital titans have done to date: it has established a habit.

When you want to buy anything, you usually go to Amazon, not Google. Amazon then buys adverts to push companies’ products to the top of your search results, increasing sales and earning Amazon a greater portion of the revenue. According to eMarketer, it is expected to generate $27.8 billion in search revenue in the United States next year, trailing only Google’s $62.9 billion total.

And then there’s AI, the technology that (supposedly) will change everything.

Why search in stilted language for “kendall jenner why bad bunny breakup” or “police moving violation driver rights no stop sign” when you can just ask OpenAI’s ChatGPT, “What’s going on with Kendall Jenner and Bad Bunny?” in “I need help fighting a moving violation involving a stop sign that wasn’t visible.” Google is working on exactly this technology with its Gemini product, but its success is far from guaranteed, especially with Apple collaborating with OpenAI and other businesses rapidly joining the market.

A Google spokeswoman referred to a blog post from last week in which the company unveiled ads in its AI overviews (the AI-generated text that appears at the top of search results). It’s Google’s way of expressing its ability to profit on a changing marketplace while retaining its business, even as its consumers steadily transition to ask-and-answer AI and away from search.

google

Google has long used a single catchphrase to defend itself against opponents who claim it is a monopoly abusing its power: competition is only a click away. Until recently, that seemed comically obtuse. Really? We are going to switch to Bing? Or Duck Duck Go? Give me a break.

But today, it feels more like reality.

Google is in no danger of disappearing. However, every highly dominating company faces some type of reckoning over time. GE, a Dow mainstay for more than a century, was broken up last year and is now a shell of its previous dominance. Sears declared bankruptcy in 2022 and is virtually out of business. US Steel, long the foundation of American manufacturing, is attempting to sell itself to a Japanese corporation.

Could we remember Google in the same way that we remember Yahoo or Ask Jeeves in decades? These next few years could be significant.

SOURCE | CNN

Continue Reading

News

2024 | Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

trump

Washington — Trump Media,  The Supreme Court announced Monday that it will not hear an appeal from social media platform X about a search warrant acquired by prosecutors in the election meddling case against former President Donald Trump.

The justices did not explain their rationale, and there were no recorded dissents.

The firm, which was known as Twitter before being purchased by billionaire Elon Musk, claims a nondisclosure order that prevented it from informing Trump about the warrant obtained by special counsel Jack Smith’s team violated its First Amendment rights.

The business also claims Trump should have had an opportunity to exercise executive privilege. If not reined in, the government may employ similar tactics to intercept additional privileged communications, their lawyers contended.

trump

Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

Two neutral electronic privacy groups also joined in, urging the high court to hear the case on First Amendment grounds.

Prosecutors, however, claim that the corporation never shown that Trump utilized the account for official purposes, therefore executive privilege is not a problem. A lower court also determined that informing Trump could have compromised the current probe.

trump

Trump utilized his Twitter account in the weeks preceding up to his supporters’ attack on the Capitol on January 6, 2021, to spread false assertions about the election, which prosecutors claim were intended to create doubt in the democratic process.

The indictment describes how Trump used his Twitter account to encourage his followers to travel to Washington on Jan. 6, pressuring Vice President Mike Pence to reject the certification, and falsely claiming that the Capitol crowd, which battered police officers and destroyed glass, was peaceful.

musk trump

Supreme Court Won’t Hear Appeal From Elon Musk’s X Platform Over Warrant In Trump Case

That case is now moving forward following the Supreme Court’s verdict in July, which granted Trump full immunity from criminal prosecution as a former president.

The warrant arrived at Twitter amid quick changes implemented by Musk, who bought the company in 2022 and has since cut off most of its workforce, including those dedicated to combating disinformation and hate speech.

He also welcomed back a vast list of previously banned users, including Trump, and endorsed him for the 2024 presidential election.

SOURCE | AP

Continue Reading

News

The Supreme Court Turns Down Biden’s Government Appeal in a Texas Emergency Abortion Matter.

Supreme Court

(VOR News) – A ruling that prohibits emergency abortions that contravene the Supreme Court law in the state of Texas, which has one of the most stringent abortion restrictions in the country, has been upheld by the Supreme Court of the United States. The United States Supreme Court upheld this decision.

The justices did not provide any specifics regarding the underlying reasons for their decision to uphold an order from a lower court that declared hospitals cannot be legally obligated to administer abortions if doing so would violate the law in the state of Texas.

Institutions are not required to perform abortions, as stipulated in the decree. The common populace did not investigate any opposing viewpoints. The decision was made just weeks before a presidential election that brought abortion to the forefront of the political agenda.

This decision follows the 2022 Supreme Court ruling that ended abortion nationwide.

In response to a request from the administration of Vice President Joe Biden to overturn the lower court’s decision, the justices expressed their disapproval.

The government contends that hospitals are obligated to perform abortions in compliance with federal legislation when the health or life of an expectant patient is in an exceedingly precarious condition.

This is the case in regions where the procedure is prohibited. The difficulty hospitals in Texas and other states are experiencing in determining whether or not routine care could be in violation of stringent state laws that prohibit abortion has resulted in an increase in the number of complaints concerning pregnant women who are experiencing medical distress being turned away from emergency rooms.

The administration cited the Supreme Court’s ruling in a case that bore a striking resemblance to the one that was presented to it in Idaho at the beginning of the year. The justices took a limited decision in that case to allow the continuation of emergency abortions without interruption while a lawsuit was still being heard.

In contrast, Texas has been a vocal proponent of the injunction’s continued enforcement. Texas has argued that its circumstances are distinct from those of Idaho, as the state does have an exemption for situations that pose a significant hazard to the health of an expectant patient.

According to the state, the discrepancy is the result of this exemption. The state of Idaho had a provision that safeguarded a woman’s life when the issue was first broached; however, it did not include protection for her health.

Certified medical practitioners are not obligated to wait until a woman’s life is in imminent peril before they are legally permitted to perform an abortion, as determined by the state supreme court.

The state of Texas highlighted this to the Supreme Court.

Nevertheless, medical professionals have criticized the Texas statute as being perilously ambiguous, and a medical board has declined to provide a list of all the disorders that are eligible for an exception. Furthermore, the statute has been criticized for its hazardous ambiguity.

For an extended period, termination of pregnancies has been a standard procedure in medical treatment for individuals who have been experiencing significant issues. It is implemented in this manner to prevent catastrophic outcomes, such as sepsis, organ failure, and other severe scenarios.

Nevertheless, medical professionals and hospitals in Texas and other states with strict abortion laws have noted that it is uncertain whether or not these terminations could be in violation of abortion prohibitions that include the possibility of a prison sentence. This is the case in regions where abortion prohibitions are exceedingly restrictive.

Following the Supreme Court’s decision to overturn Roe v. Wade, which resulted in restrictions on the rights of women to have abortions in several Republican-ruled states, the Texas case was revisited in 2022.

As per the orders that were disclosed by the administration of Vice President Joe Biden, hospitals are still required to provide abortions in cases that are classified as dire emergency.

As stipulated in a piece of health care legislation, the majority of hospitals are obligated to provide medical assistance to patients who are experiencing medical distress. This is in accordance with the law.

The state of Texas maintained that hospitals should not be obligated to provide abortions throughout the litigation, as doing so would violate the state’s constitutional prohibition on abortions. In its January judgment, the 5th United States Circuit Court of Appeals concurred with the state and acknowledged that the administration had exceeded its authority.

SOURCE: AP

SEE ALSO:

Could Last-Minute Surprises Derail Kamala Harris’ Campaign? “Nostradamus” Explains the US Poll.

Scientists Awarded MicroRNA The Nobel Prize in Medicine.

US Inflation will Comfort a Fed Focused on Labor Markets.

Continue Reading

Trending