China Cracks Down on Corruption and Boosts Yuan

The article reports that Yi Huiman, the former chairman of China's Securities Regulatory Commission (CSRC), is being investigated for disciplinary breaches as part of China's ongoing anti-graft campaign in the financial sector. Yi, who served as CSRC chairman from 2019 to 2024, is the second watchdog regulator of China's $12 trillion capital market to be investigated for graft in a decade. The investigation is seen as part of President Xi Jinping's efforts to clean up China's financial system and mitigate the risk of financial decoupling with the US. The article highlights the significance of the crackdown on corruption in the financial industry, with almost 300 Chinese companies listed on US stock exchanges potentially seeking alternative listing venues amid deteriorating US-China relations.

China's biotech industry is rapidly growing and gaining on the US, driven by regulatory reforms and increased innovation. In 2015, a regulatory change forced pharmaceutical companies to audit their clinical trial data, leading to a significant withdrawal of pending applications. Since then, China's drug regulatory credibility has improved, paving the way for the rise of its biotech industry. However, the US is still ahead due to its long head start and geopolitical factors. The article discusses whether tariffs can hold back China's progress.

China's Communist Party is engaging in party diplomacy as leaders from four communist countries gather in Beijing for a military parade marking the 80th anniversary of the victory in the war against Japanese aggression. President Xi Jinping met with leaders from Cuba, North Korea, Laos, and Vietnam, highlighting the importance of party-to-party interactions in China's diplomatic strategy. The Communist Party's International Department plays a central role in these interactions, having established connections with over 600 parties in other countries.

The Chinese yuan has rallied against the US dollar due to guidance from the People's Bank of China, rather than market forces. Analysts believe this move is likely a proactive measure to prepare for a potential weakening of the US dollar amid concerns over the Federal Reserve's independence and the likelihood of an interest rate cut. The yuan's reference rate was pushed up from 7.1321 to 7.1030 over five trading days, while the US dollar index remained steady. The move is seen as a measured one, as Beijing aims to avoid harming its exporters' competitiveness amid trade tensions with the US.