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China spreads its currency at Global level by establishing First Yuan clearing Bank in US

Chinese officials have undergone years of toil and entered into more than 20 currency swap agreements to give the RMB a global image

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FILE - Chinese 100 yuan banknotes are seen on a counter of a branch of a commercial bank in Beijing, China, March 30, 2016. -VOA
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  • China established the first clearing center for the Chinese yuan in the US
  • China wishes to enter the US financial markets with RMB business to challenge the US dollar on its home turf
  • The way Chinese currency is declining at the rate they are now, there will be no RMB available outside China in 18 months

September 23, 2016: China this week established the first clearing center for the Chinese yuan, or RMB, in the United States. The move is seen by some as a signal China wants to take on the dollar on its home turf.

But there is more than a sense of bravado behind the decision. This is a crucial time for the RMB, which is struggling to stay on course while preparing to enter the coveted currency basket of International Monetary Fund’s Special Drawing Rights (SDR) on October 1st.

In financial terms, there was no reason to establish an RMB clearing center as the U.S. market can easily be serviced through dedicated RMB centers in other parts of the world.

FILE - Chinese paramilitary police march past China's central bank, the People's Bank of China, in Beijing, March 12, 2016.
FILE – Chinese paramilitary police march past China’s central bank, the People’s Bank of China, in Beijing, March 12, 2016. -VOA

“But it sends the signal that China wishes to enter the U.S. financial markets with RMB business to challenge the U.S. dollar on its home turf, so to speak,” Jacob Kirkegaard, a senior fellow at the Washington-based Peterson Institute of International Economics told VOA.

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“As such, this is more a political signal than a financial necessity,” he said. “This is because the RMB rate is an intensely political figure and essentially can be taken as a proxy for ‘faith in the Chinese economy.’ “

No celebrations

Chinese officials have undergone years of toil and entered into more than 20 currency swap agreements to give the RMB a global image. But they are not going to sip wine and declare “gan bei” (bottoms up, in Chinese custom) over the yuan’s entry into the IMF’s basket for SDR a few days later.

Christopher Balding, associate professor at HSBC School of Business Peking University, said China is desperately trying to keep the RMB from crashing by spending $50 billion a month. Beijing is selling dollars out of its reserves to buy up the available yuan in the international market, he said.

“If they [Chinese officials] went on national TV and announced that they would let the market fully determine the value of the RMB, I don’t think it is a stretch to say that the RMB will drop 15-20 percent in the blink of an eye,” Balding told VOA.

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“China’s foreign investment is down 40 percent. When you couple that with the continued amount of money leaving China, that is putting a lot of pressure on the RMB,” he said.

Beijing is actually de-internationalizing its currency by sucking out the available yuan in the world markets. “If they [Chinese currency] are declining at the rate they are now, there will be no RMB available outside China in 18 months,” he said.

FILE - An exchange store staff shows a Chinese RMB$100 banknote (L) and a US$100 banknote in Hong Kong, May 16, 2006.
FILE – An exchange store staff shows a Chinese RMB$100 banknote (L) and a US$100 banknote in Hong Kong, May 16, 2006.-VOA

Battle for stability

China’s recent policy to keep the currency’s value roughly stable has been driven by its desire to avoid sharp currency moves in the lead-up to the G-20 summit that took place in China recently, and, now, the forthcoming inclusion of the RMB in the IMF’s SDR basket, according to Eswar Prasad, senior professor at Cornell University and author of an upcoming book, Gaining Currency: The Rise of the Renminbi.

“China’s government faces a conundrum that other reserve currency economies have faced in the past – how to promote the currency’s role in global finance without losing control over the currency’s value,” Prasad said, adding, “Currency management policies over the last year suggest that the government sees stability in currency markets as a higher priority than promoting the currency’s international role.”

China’s currency moves are not meant to protect or push forward its exports. Chinese exporters are not likely to gain hugely by a slide in RMB value or lose much if it was a little stronger, because many of them face little competition in the price and quality range in which they operate, experts said.

FILE - A container is loaded onto a cargo ship at the Tianjin port in China.
FILE – A container is loaded onto a cargo ship at the Tianjin port in China.-VOA

“China is most interested in maintaining basic stability of its currency and limiting volatility. Reducing expectations of substantial or sudden depreciation helps reduce capital outflows,” said Scot Kennedy, deputy director of the Freeman Chair in China Studies at the Center for Strategic and International Studies. “The recent modest depreciation is not geared to support exports.”- VOA

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Chinese Government Offers Free Removal of Intrauterine Devices Forced Upon Women Under the “One-Child Policy”

Documentary film-maker Ai Xiaoming, now 63, said she was forced to have an IUD fitted, but then left with it for decades with no further check-ups

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Removal of intrauterine devices
Women of China. Wikimedia
  • Partial relaxation of China’s family planning controls last year prompted the government to offer free removals of intrauterine devices forced upon a millions of women
  • Women of childbearing age have been offered free IUD removal under the new rules
  • Some 114 million women were registered as using IUDs by the Chinese government in 2006

New Delhi, August 23, 2017: The partial relaxation of China’s draconian family planning controls last year has prompted the government to offer free removals of intrauterine devices (IUDs) forced upon millions of women under the policy.

The offer has highlighted decades of state-enforced contraception and the failure of proper follow-up care under the “one-child policy,” which gave way to the “two-child policy” at the start of 2016.

Now, women of childbearing age have been offered free IUD removal under the new rules, but there are caveats.

The medical fee waiver only applies to women who are allowed to have another child or who cannot continue to have the IUD for health reasons.

Everyone else will have to pay their own medical bills.

Some 114 million women were registered as using IUDs by the Chinese government in 2006, the most recent year for which figures are available, state media reported.

Nearly eight million IUDs were fitted in China between 2000 and 2009 alone, but many women say they were never offered a check-up or replacement every 10 years, as is recommended with the devices.

A report from the country’s state family planning council showed at least 23 percent of IUDs were defective, leading to problems that could require surgical removal or hysterectomy.

“Many are enduring another painful process trying to have the device removed in order to have more children under the new policy,” the Global Times newspaper said in a recent report.

[bctt tweet=”China’s family planning policies hurt women, children and families.” username=”NewsGramdotcom”]

Some women have expressed outrage, saying the ruling Chinese Communist Party’s offer is too little, too late.

“The Chinese government has really acted shamelessly in doing this,” Annie Zhang, president of the U.S.-based group Women’s Rights in China, told RFA in a recent interview.

“They treat Chinese women as sub-human; you can have a baby if they say you can have one, but not if they say you can’t,” she said. “Even the spacing of the children is dictated by the party.”

“China’s family planning policies hurt women, children and families,” she said. “So many women have been sterilized; the figures are quite shocking, and that’s not including the women who died on the operating table or from infection.”

“And there has been no apology whatsoever from the government,” Zhang said.

Documentary film-maker Ai Xiaoming, now 63, said she was forced to have an IUD fitted, but then left with it for decades with no further check-ups.

“In the eyes of the Chinese government, women are seen as having a job to do,” Ai said. “If they tell you to have a baby, then you have to have one. If they don’t need babies, you can’t have one.”

Ai said her own IUD developed complications, meaning that she was forced to have a hysterectomy when it couldn’t be removed.

In Guangdong, the first province to implement the new population controls in January 2016, couples are still expected to accept sterilization after their regulation two children are born.

Also read: China scraps one child policy, to allow two children for all couples

And women who have had one child are still required to have an IUD fitted after the first birth, even if they plan to have a second under the new rules.

The Global Times newspaper quoted Nanjing-based population expert Sun Xiaoming as saying that around 25 percent of the women living in rural areas never had their IUDs removed at all, in spite of guidelines requiring their removal within six months of menopause.

They were never told that this was necessary, the paper said.

It quoted specialists as saying that some 26 million Chinese women will need to have an IUD removal operation in the next 10 years after hitting menopause, costing them a total of 2.6 billion yuan in medical bills. (RFA)