As in so many other countries, the leaders of China have been grappling with the way in which they intend to handle the issue of cryptocurrency. Recently, they made their opinions a bit more clear. In fact, Chinese regulators are honing in on offshore transactions that Chinese nationals have made in regards to crypto currency. Strict laws will be imposed, and those who do not follow the current guidelines will be punished by having their bank accounts frozen and perhaps even having some of their assets taken over.
In a global economy that has gone crazy for bitcoin and other cryptocurrencies, it’s not difficult to see that the actions of these regulators will have a huge impact upon the world economy at large. This, of course, is a far cry from where China one stood in relation to cryptocurrency. In fact, China was once a haven for cryptocurrencies. However, recent rules and regulations have been put into place, and those who have invested in crypto currency‘s are feeling the pain. Perhaps this is why so many offshore platforms were created in order to serve as a sort of loophole, allowing Chinese citizens to participate in the crypto craze. However, it is recently become obvious that authorities are aware of these loopholes and are taking major steps to ensure that they are closed up.
Consumer price inflation in the UK dropped 0.3% in the month of February, the lowest data point since July 2017. Financial experts point to lower petrol prices combined with a slower rise in food costs as the reason for the drop. Heading into the month, price inflation had sat at 3%, but the month ended at 2.7%.
Diesel costs fell 0.1p per liter, while overall petrol prices fell by 0.2p per liter. The cost of food only increased 0.1% between the months of January and February. This small increase contrasted to a total rise of 0.8% for the year 2017. This smaller rise was to be expected since last year’s big increase was largely attributed to a shortage of vegetables due to poor weather in the southern Mediterranean negatively affecting export prices.
Consumers now look to the Bank of England to determine if interest rates will remain steady or if the Bank will continue with its anticipated plan to raise these rates at its May meeting. The Bank is hopeful that the economic future is bright for the country, as it has previously stated that it expects wage increases to outpace inflation in the coming year. Financial employment experts are confirming this optimism as data points to a wage increase of 2.6% over the first three months of 2018. The official pay growth data will be released on Wednesday by the Office for National Statistics (ONS).
A new study covered by CNBC just announced that industrial fishing has now taken over more than half of the world’s ocean surface. Although fish do not constitute a major part of human diet on the whole, the effect of commercial fishing in new territory has the potential to rapidly deplete ocean resources. Environmentalists see this as serious cause for concern about the health of our world’s oceans and the supply of fish.
In order to combat the potential for over-fishing and the depletion of the global supply of marine resources, some countries, such as China, institute periodic fishing bans for months at a time. Some corrupt companies ignore these bans, which may not be strictly enforced in any event, but this is a step in the right direction to prevent environmental destruction. Other countries have created buffer zones to try to preserve marine biodiversity in areas that are hit hardest by industrial fishing.
Even though it may be alarming that so much of the world’s ocean surface has been taken over by commercial fishing operations, there is still plenty of ocean area left that could be conserved over time. Demand for fish is more cultural and social than it is essential to maintain populations, which means that there is less of a concern that the ocean resources will be used up out of necessity. With the advancement of fishing technology, there is also potential that fishermen and their vessels will leave less pollution in their wake for decades to come.
There is a widespread need in many developing Asian countries for a surge in investment in some of the countries’ most basic infrastructure. CNN recently reported that developing Asian nations are in need of about $26 trillion in infrastructure investment through 2030 to rebuild power grids, transportation and sewage. The concern for the U.S. government is that other states are stepping up to the plate to invest in these countries. China is currently the most prominent force in helping other Asian countries with their infrastructure needs. This could be a bit unsettling for the world economy because China could significantly increase its influence over these countries and their exports.
The U.S. is in a tough spot when considering whether to increase aid to these countries because it could be viewed as an aggressive stance by China. This is especially true if the U.S. decides to team up with other countries, such as Japan, to ease the financial burden. President Trump is also in a challenging position because he campaigned on the promise of “America First” in terms of any spending initiatives. It is difficult to explain to the average voter how supporting a sewage line in India will help U.S. interests abroad when there are public schools that lack basic air conditioning in the U.S. One option is to promote U.S. investment in foreign infrastructure as a way to create a larger market for the export of U.S. goods. This could also boost jobs for U.S. manufacturing in the future.
A recent BBC article explores life in West Africa after the recent Ebola virus epidemic. The devastating disease created widespread fear. Yet it also exerted an economic impact over the region.
The BBC news article described daily life in three struggling nations: Liberia, Sierra Leone, and Guinea. The report concentrated on residents of the slum district of West Point in Monrovia. In the wake of the epidemic, some survivors have thrown themselves into work as they seek to recover from painful personal losses.
Several people who lost loved ones during the Ebola quarantine now manage small enterprises. Rita Carol invested in a refrigerator, which she uses to sell ice to neighbors. Eva Nah used compensation she received following the death of her grandson during a quarantine protest for tuition for four other young relatives. Slum dweller J. Roberts, a widower after the epidemic, began a business selling heated water. He also rents washing booths so neighbors can bathe. He hopes his small business will support a better life for his four children.
Better Health Care
One byproduct of the tragedy involves improved disease monitoring. This effort in Monrovia now obtains greater funding. A medical facility established to care for Ebola patients still employs a nursing staff. It treats other widespread conditions, such as scabies and malaria. Founded by Reginald Kahweh (who lost both his parents to Ebola), the Kahweh Clinic improves the daily quality of life for many Liberians.
The year 2017 final financial figures are in and officials say the GDP of the UK economy grew by a paltry 0.4% in the last three months of the fourth quarter. Previously, the Office for National Statistics (ONS) had stated that they believed the economy would have grown at a rate of 0.5% The revised decreased rate of growth was largely attributed to a lower gain in the production industries. Overall the national economy grew at a rate of 1.7% for the year. This figure is the lowest since 2012.
Experts attribute the shutdown of the Forties pipeline system for most of December 2017 as a major contributor to the revised decrease in economic prosperity. Other factors include a stifled business investment scene, a perceived construction recession, stagnate wage growth, and concerns over rising inflation. A slowdown in household spending, as well as higher prices on consumer goods, was attributed to the inflation worries. The 1.4% year-on-year rate of growth in the last quarter of the year lands the UK as the slowest growing economy among the world’s wealthiest countries, behind both Italy and Japan.
The Bank of England is encouraged by future growth forecasts and has raised their prediction of economic output to increase to 1.8% overall for the upcoming year. Assuming this growth comes to fruition, the Bank has indicated that interest rate hikes could accelerate given this economic trajectory.
Trade tension between China and the United States is growing. Trump administration officials are increasingly expressing their criticism of China’s trade policies. China is sending Liu He, the country’s top economic policymaker, to Washington this week to smooth tensions between the two countries. Liu is making this trip before China’s congress conducts its annual meeting. Liu is expected to be named the next vice premier for financial and industrial policy for China at this meeting.
The Trump Administration and the Commerce Department both view steel and aluminum imports from countries like China as a national security threat. This is because China and a few other countries implement higher tariffs on their imports of American products than the U.S. imposes tariffs on the imports of products from these countries. President Trump and the Commerce Department are looking at ways to restrict these and other imports through higher tariffs. The Chinese government would prefer the status quo, but they are also ready for a trade confrontation.
In early February, the Chinese government sent its top diplomat Yang Jiechi to Washington to maintain the status quo and soothe the concerns in Washington. Nothing significant was accomplished with this visit. The Trump administration was already too focused on China’s military buildup and China’s growing trade surplus with the U.S. The large delegation Liu is expected to lead is an indication of Liu’s growing influence within the Chinese government. Experts believe Liu will eventually be the head of China’s central bank after the current central bank leader retires later this year.
In 2017, the British economy grew at a snail pace of 1.7 percent, The Guardian reports. Meanwhile, the 4th quarter growth has been revised down to 0.4 percent. That’s well below the growth in many developed economies.
Business investment in the UK was stagnant last year as companies are waiting to see what happens during Brexit negotiations. Business uncertainty has spiked after the Brexit vote in 2016. Meanwhile, household spending grew only 0.3 percent last quarter, bringing the annual growth rate to a meager 1.8 percent.
On top of that, the trade deficit has widened during the last quarter of 2017 to over £12 billion from less than £10 billion a year before. This data is worse than expected. According to Danske Bank analysts, the traditional growth engines in the UK are lagging.
The latest performance of the United Kingdom’s economy is behind other G7 nations. The growth rates in Germany, the United States, and the Eurozone stood at 2.5 percent or higher. Even France, Italy, and Japan, countries known for slow economic growth, outperformed Britain.
If Brexit negotiations aren’t favorable to the British, this is likely to get worse. The Brits dream of making another Singapore or Australia out of their country, yet the miss a major point: the UK is near Europe. It is not in the fast growing Asia-Pacific region. Geography makes a difference.
When Hugo Chavez took over as the president of Venezuela in 1998, the country was facing challenging economic issues. Chavez was able to unite the country thanks to the largest oil reserves in the world. Venezuela was basking in oil and the wealth that comes with that oil. The country was well on its way to becoming one of the most successful modern-day socialist countries on the planet. Chavez gave the people hope by establishing social programs. But Chavez wasn’t afraid to spend money he didn’t have because the world needed what he was selling and he had plenty of it.
When Chavez finally met his maker in March 2013, he gave the keys to his office to Nicolas Maduro. Maduro isn’t the social reformer or a smart politician. So when the economy started to fall apart when oil prices hit rock bottom, Maduro put his own socialist plan together. But the Maduro plan is not about Chavez socialism. Maduro’s government is more authoritarian and military in nature. Instead of reaching out and getting help from other countries, Maduro decided to bash the United States and its allies, as well as confiscate farms, businesses, and retail stores so he could have complete control.
Maduro’s Venezuela is experiencing the largest recession in modern times. The International Monetary Fund predicts the country’s economy will contract by 15 percent in 2018. And inflation will hit 13,000 percent. No one is sure what will happen next in Venezuela. There is a mass exodus going on. People are moving to Colombia, Brazil, and other South American countries. But Maduro is standing strong, and the world is shaking its head in disbelief.
The Brexit horror stories coming out of the U.K. are hard to ignore. Brexit is taking more time and costing more money than the Brits thought it would. The EU is standing firm and forcing the U.K. to do the right thing by tying up Brexit loose ends and committing to pay the EU a fat separation check. That should make EU leaders sleep a better. There’s no doubt. The EU needs the U.K. as a trading partner and as a money source, but getting to a finish line that both sides can cheer about is not going to happen. This first-ever break by a major power from the European Union and it’s not pretty.
To say the Brexit deal is a tangled web of political maneuvering and hurt egos is an understatement. The United Kingdom is trying to figure out how they can develop new trading partners while the country’s economy is taking a beating. Inflation is up to 3.0 percent, and the pound is down, except for a surge in January 2018. The rules behind the actual break with the European Union is still up in the air. It’s safe to say the British are cursing what Brexit is doing to the country, even though the majority of voters thought membership in the EU was a bad deal.
Time will shed light on the real Brexit story. Manufacturing in the U.K. is better than expected, but the Bank of England is still raising interest rates. The Brits want 2.0 percent consumer growth, but rising prices, slow wage gains, and Brexit are standing in the way.