China May Lessen Its Currency Manipulation Soon

The Chinese currency management done over the past several years is a significant issue because it raises the U.S. trade deficit, and a higher U.S. trade deficit — as seen in recent years — means a contribution to a shortfall in U.S. economic demand. A considerable shortfall in economic demand has hurt the majority of U.S. workers, as it means the U.S. is importing too much and exporting too little. This policy actually matters quite a bit, as its macroeconomic implications effect the voting trends in the U.S. that then have an effect on world affairs.

A NYT article told readers that investors are worried because China may stop buying and could even start selling US Treasury bonds:

“Bond markets appeared to be further spooked on Wednesday by a report that China’s central bank, which owns $1.2 trillion in United States Treasury bonds, may be poised to slow or even halt its buying of United States debt. China has total reserves of just over $3 trillion.”

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While China’s decision to stop buying, and possibly start selling US Treasury bonds, is presented as a bad thing in this piece, it is exactly what anyone who had complained about China’s currency “manipulation” (e.g. Donald Trump) would want to see. This “manipulation” (which should more accurately be called “management” since it is entirely open) involved China’s government buying US government bonds and other assets in order to prop up the dollar against the yuan.

By buying dollar-based assets, instead of selling its dollars in international currency markets, China was increasing the demand for dollars, thereby pushing up its price. If it stops and reverses this process, it will be lowering the value of the dollar relative to the yuan. This will make goods and services in the United States more competitive internationally, thereby reducing the US trade deficit.

Rather than being a hostile gesture toward the United States, this is exactly what Trump claimed he was going to make China do in his campaign. He said that he would a take a tough line with China and make it end its currency management.

It is also worth noting that if the dollar declines in the months ahead it would be the exact opposite of what most economists (including the Trump administration’s economists) had predicted as the outcome from the tax cut. They had predicted a flood of foreign investment, which would have the effect of increasing the value of the dollar and the trade deficit.

Chilling Chinese Social Credit Blacklist

I mainly criticize the corrupt activities of the U.S. government and the corporations originating there, but I occasionally devote energy to criticizing other states if it’s significant enough. Chinese repressions such as its heavily authoritarian, state-sanctioned system of discrimination fall into that category.

Apple CEO Tim Cook looks forward to a “common future in cyberspace” with China, he told the Chinese government’s World Internet Conference earlier this month. This was an embarrassing gesture toward a state that aggressively censors the internet and envisions a dystopian future online.

The experience of lawyer Li Xiaolin may give a taste of what that future looks like. During a 2016 work trip inside China, he tried to use his national identity card to purchase a plane ticket. To his surprise, the online system rejected it, saying he had been blacklisted by China’s top court. Mr. Li checked the court’s website: His name was on a list of “untrustworthy” people for having failed to carry out a court order in 2015. He thought he had resolved the issue, but now he was stranded more than 1,200 miles from home.

Mr. Li’s dilemma was due to the Chinese government’s ambitious “social credit system.” Launched by the government in 2012, it vows to “make trustworthy people benefit everywhere and untrustworthy people restricted everywhere” by the time it is fully implemented in 2020.

This is no anodyne credit score. By rating citizens on a range of behaviors from shopping habits to online speech, the government intends to manufacture a problem-free society. Those with low scores will face obstacles in everything from getting government jobs to placing their children in desired schools. It remains unclear exactly who will run the system, whether or how one could dispute scores, or even whether the system is legal.

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Chinese government authorities clearly hope to create a reality in which bureaucratic pettiness could significantly limit people’s rights. As President Xi Jinping’s power grows, and as the system approaches full implementation, more abuses will come.

Video on China’s Disturbing Surveillance State

No rational human being would ideally want to live in a society with this much mass surveillance. It presents all sorts of problems and has a major repressive effect.

Mass surveillance has never been about security too. It’s about population control. More people will realize this as time goes on.

China has been building what it calls “the world’s biggest camera surveillance network”. Across the country, 170 million CCTV cameras are already in place and an estimated 400 million new ones will be installed in the next three years.

Many of the cameras are fitted with artificial intelligence, including facial recognition technology. The BBC’s John Sudworth has been given rare access to one of the new hi-tech police control rooms.

Drug-Resistant Pneumonia That’s Deadly and Contagious Appears in China

Drug-resistant superbugs have been steadily becoming a bigger problem, and unfortunately, there hasn’t been an adequate amount of resources devoted to addressing the issue. There really needs to be sharp focus on the antibiotic resistance problem before it gets a lot worse.

Doctors in Hangzhou in southeastern China have detected a a type of pneumonia that is both highly drug-resistant and very deadly. It also spreads easily.

The bacterium — a type of Klebsiella pneumoniae — killed five people in an intensive care unit in Hangzhou in 2016, researchers reported Tuesday in the journal Lancet Infectious Diseases.

“This fatal outbreak happened in a brand new hospital with very good hygiene,” says microbiologist Sheng Chen, who co-led the study at the Hong Kong Polytechnic University. “Drug-resistant strains shouldn’t have appeared so quickly.”

The microbe can fight off all drugs available in China, Chen says. “We don’t have anything in China to stop it,” he says. “There is a drug available in the U.S. that should be effective against it, but we haven’t tested it yet.”

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When Chen and his team sequenced the microbes found in the infections, they were shocked at what they saw. These bacteria aren’t like other multidrug-resistant pneumonia reported before. They are a fusion of two dangerous forms.

In the past three decades, two types of K. pneumoniae have appeared in hospitals. The first is a drug-resistant form, called CRE, which can fight off even the toughest antibiotics. Last January, this type of pneumonia killed a woman in Nevada. That strain resisted 26 antibiotics.

The second type of K. pneumoniae causes a very severe form of the disease and is known as “hypervirulent.”

This hypervirulent form — which is widespread across Chinese hospitals — causes more damage to the body than other strains do. It can spread through communities. And it can even sicken young, healthy adults, Chen says.

For years, doctors feared the two types would one day combine. And now that it has happened, scientists around the world need to be on alert for these triple-threat strains, researchers at Rutgers University write in a commentary about the new study.

“Their study describes an alarming evolutionary event,” epidemiologists Liang Chen and Barry Kreiswirth write about the emergence of this worrying pneumonia.

“Failure to control its early spread right now, will make a global epidemic of carbapenem-resistant [CRE], hypervirulent K. pneumoniae hard to avoid,” the researchers write.

Approval for the new drug in China would help. In the meantime, doctors can stop it from spreading by identifying outbreaks quickly and isolating people.