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Despite the Rhetoric, US-China Financial Decoupling Is Not Happening (PIIE, 7 min read) A survey shows 80% of US companies will not relocate their manufacturing out of China. Portfolio investment in Chinese stocks and bonds also continues to grow and has reached RMB4.2 trillion (USD594 billion) for the first quarter of 2020. This will further prompt the US-based global indices provider (MSCI) to increase the weights of Chinese listings. Additionally, delisted Chinese companies in the US can list in Hong Kong, where US investors can still invest or have access to US capital via private markets. [Bullish Globalisation]
China’s Next World-First (OMFIF, 3 min read) Beijing is launching a pilot scheme to test E-CNY in several districts as a broader strategy to mitigate financial stability worries as big tech like Alipay and Wechat now holds 90% share of the local retail payments market. The current implementation wouldn’t disrupt the financial sector because it doesn’t require consumers to open an account at the central bank; issuance and redemption can be carried out by the financial sector.