Good evening. How did China go from “financial repression” to the global leader in “financial technology” in only a matter of years? Our cover story this week — an excerpt from Martin Chorzempa’s new book The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology — looks back at one of the turning points of this unprecedented change. Elsewhere, we have infographics on China’s changing energy trade; an interview with Ash Carter on the Pentagon’s lonely pivot to Asia; an op-ed from Yun Sun on why reports of cracks in the Sino-Russia relationship are wishful thinking; and an op-ed from George Magnus about the renminbi’s hostage crisis. If you’re not already a paid subscriber to The Wire, please sign up here.
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The future of finance — the way Wall Street operates and how you manage your personal finances — is on the verge of upheaval. And although few could have anticipated it, the force underlying the change comes from China, a country that went from “financial repression” to the global leader in “financial technology” in only a matter of years. The resulting system, as Martin Chorzempa’s new book shows, could either be liberating or Orwellian.
The Big Picture: China’s Changing Energy Trade
Once burgeoning U.S. exports of fossil fuels to China are drying up as a result of Russia’s invasion of Ukraine and the expiration of the U.S.-China Phase One trade deal that was signed back in 2020. This week, infographics by Eliot Chen look at how the U.S.-China trade in energy commodities has changed this year, and what it means for the future of trade between the two countries.
A Q&A with Ash Carter
Ash Carter started his career as a researcher in theoretical physics but quickly became enamored with public policy. He was Secretary of Defense from February 2015 until the end of the Obama administration, during which time he carried out that administration’s much publicized — and much criticized — “pivot” to Asia. In this week’s Q&A with Bob Davis — part of our series Rules of Engagement — he talks about the Pentagon’s lonely pivot to Asia; Xi Jinping’s big mistake with ethnocentrism; and the ‘Great Firewall of self-isolation.’
Illustration by Lauren Crow
Is The Sino-Russia Relationship Cracking?
Following the recent setbacks suffered by Russia’s military in Ukraine, optimism has grown among Western analysts that China’s ties with its neighbor and ally may be fraying. But as Yun Sun argues in this week’s op-ed, a more careful examination of recent events should in fact discourage any wishful thinking that Beijing is distancing itself from Moscow.
The Renminbi’s Hostage Crisis
Last week, China’s renminbi fell to its lowest level against the dollar since 2008. At first glance, the Chinese currency’s slide appears to be more about the dollar’s strength than a renminbi crisis. But as George Magnus argues in this week’s op-ed, the renminbi’s fall against the dollar seems to have caused Chinese policymakers unusual levels of anxiety this year.
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