Tag: red

A Chinese city is handing out $1.5 million in digital ‘red envelopes’ to lottery winners to trial a cashless society



a view of a city with tall buildings in the background: Futian district in Shenzhen, China. A different district, Luhou, took part in the digital currency pilot. Prisma by Dukas/Universal Images Group via Getty Images


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Futian district in Shenzhen, China. A different district, Luhou, took part in the digital currency pilot. Prisma by Dukas/Universal Images Group via Getty Images

  • Authorities in Shenzhen, southern China, have handed out $1.5 million of a new digital currency as part of a trial of a cashless society.
  • Last Friday authorities gave 50,000 lottery winners the equivalent of $30 each to spend digitally by October 16, the state-run China Daily reported Monday.
  • The digital currency is not like a cryptocurrency, and is issued and controlled by China’s central bank, the People’s Bank of China.
  • The PBoC said it plans to formally launch the digital payment system in late 2020, according to the BBC.
  • Visit Business Insider’s homepage for more stories.

A Chinese city has handed out 10 million yuan, or $1.5 million, in digital currency to trial what citizens would do in a cashless society.

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On Friday, 50,000 people living in the Luhou district of Shenzhen were given digital “red envelopes,” each containing around 200 yuan ($30) worth of the digital currency, the state-run China Daily reported Monday.

The digital currency not a cryptocurrency, like bitcoin or ethereum, but a digitized version of the country’s renminbi currency that is run by China’s central bank, the People’s Bank of China.

The country’s four largest state-owned banks are taking part in the Shenzhen trial, China Daily reported.

The trial requires people to download the government’s digital currency app and spend their money between October 12 and October 16 in 3,000 participating stores in the district, CNBC and China Daily reported. One of those participating stores is Walmart, CNBC reported, citing the Shenzhen government.



a statue in front of a building: A pedestrian walks past the headquarters of the People's Bank of China in Beijing on February 3, 2020. The PBoC is in charge of issuing the digital currency. Reuters


© Reuters
A pedestrian walks past the headquarters of the People’s Bank of China in Beijing on February 3, 2020. The PBoC is in charge of issuing the digital currency. Reuters

So far, around 113,300 such digital currency apps — or “digital currency wallets” — have been set up in various pilot programs across China, with more than 1.1 billion yuan ($163 million) of transactions carried out so far, Fan Yifei, the PBoC’s deputy governor, told China Daily.

The Shenzhen pilot scheme appears to be the country’s largest so far, according to CNBC. Shenzhen is China’s tech hub, and home to companies like Tencent and Huawei.

According to The Guardian, some 2 million people in Luhou had applied to be part of the trial before 50,000 were selected.

The PBoC said it will formally launch the digital currency late this year, the BBC reported, but is yet to confirm a date.

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China’s ‘three red lines’ strike delicate balance between curbing real estate debt and local government finances

As China moves to tackle excessive borrowing in the real estate sector, it is walking a tightrope between providing cash-strapped local governments with revenues from land sales and keeping a lid on rising house prices.

Chinese regulators in August tightened funding conditions for 12 major property developers, setting caps on the amount of debt they could hold in relation to cash on hand, the value of their assets and as a proportion of equity in their businesses – dubbed “the three red lines”.

Last week, mainland financial newspaper the 21st Century Business Herald reported authorities had asked large banks to keep the proportion of property loans below 30 per cent of all new loans, citing unidentified sources.

Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.

Property sales growth has surged this year, helping the economy recover from the coronavirus pandemic. But it has also raised the alarm among top Communist Party officials who fret speculation in the real estate sector could increase house prices further.

In July, the Politburo – the party’s top decision-making body – stressed President Xi Jinping’s mantra that houses are “for living in, not for speculation”.

Given attempts to reign in property funding, analysts expect local government land sales to developers to weaken in coming months, something that could hurt regional finances and weigh on the broader economy.

“We don’t think Beijing wants to kill the property sector. After all, the economy is still running below its trend growth,” Macquarie Group said in a report last month.

“But it does send out a strong signal that Beijing wants to cool down the sector to save the ammo for the future. As such, property investment could peak soon.”

Zhang Ming, a researcher with the Institute of World Economics and Politics at the Chinese Academy of Social Sciences (CASS), said in August the central government does not want to see a sharp drop in property prices because it could cause risks for commercial banks, private wealth and local governments.

Land sales have been an integral part of China’s government finances at all levels over the past decade, according to research by Kate Jaquet, a portfolio manager at US-based Seafarer Capital Partners.

In China, land is owned by the state and the sale of land and user rights have been rising steadily since 2010, making up 38.6 per cent of China’s central government revenue last year, compared to 35.5 per cent in 2018, and 30.2 per cent in 2017, Seafarer Capital Partners said.

“One plausible explanation as to why Chinese authorities have allowed the listed portion of the sector to lever up so substantially, contrary to their stated commitment to reduce leverage in the financial system, is that this arrangement has been beneficial to the financial standing of the central and local governments,” Jaquet said in the June report.

Despite Beijing’s push for local governments to increase the use of municipal bonds for financing, regional economies still

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This is a code red moment for the US government

This is a code red moment for the US government, on multiple levels. The positive Covid-19 diagnosis of President Donald Trump is a worst-case scenario from a national security perspective. It could cripple the US government. But, more immediately, as we await news about potentially other infected personnel, this may already be one of the most dangerous moments the federal government has faced.



a person wearing a suit and tie: US President Donald Trump and First Lady Melania Trump step off Air Force One upon arrival at Cleveland Hopkins International Airport in Cleveland, Ohio on September 29, 2020. - President Trump is in Cleveland, Ohio for the first of three presidential debates. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)


© MANDEL NGAN/AFP/Getty Images
US President Donald Trump and First Lady Melania Trump step off Air Force One upon arrival at Cleveland Hopkins International Airport in Cleveland, Ohio on September 29, 2020. – President Trump is in Cleveland, Ohio for the first of three presidential debates. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

First, there is a global message that the White House would not or could not do what is necessary to protect its own staff, and the President. This basic fact adds to an already strong narrative that the White House will not or cannot do what’s necessary to protect Americans by, for example, insisting that all personnel wear masks. The White House’s failure to prevent a deadly virus from coming close to a purposefully unprotected President undercuts any political propaganda about the administration having Covid-19 under control.

Strategically speaking, it weakens any credibility that the US has, in terms of being a competent global leader prepared to confront threats. The perception of a President stricken by Covid-19, perhaps in part because of his own lax protocols, doesn’t inspire confidence that the US is at the forefront of combatting any global challenge, including this pandemic. This is a major downside risk for the US position on the world stage.

Second, there is an immediate operational impact on the functioning of our government — at the highest levels. I lived through H1N1 at the White House. Then-President Barack Obama and his senior staff advised all personnel to follow Centers for Disease Control and Prevention and other relevant guidelines and to be as cautious as possible because he cared about our health and because he knew what an outbreak would mean for national security.

Infection can cripple the US government. That’s why the White House and other federal agencies have continuity of operations plans in place in the event that the President is not able to perform his responsibilities. But at this point we just don’t know how many senior White House personnel and cabinet members — not to mention members of Congress — may be infected if POTUS was a “super spreader.”

Right now, the White House is undoubtedly engaging in threat neutralization measures you would expect to see in a bio terror attack, including efforts to contain the outbreak and mitigate its impacts. But, doing so requires that mission critical resources are being diverted to these efforts, something America’s enemies can seek to exploit.

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