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The 6th plenary session has now finally concluded. With the publication of the major resolution, the official realignment is complete. We have had a first look at the report. As expected, the nearly ten years under Xi play a disproportionately large role. We found no major surprises in the text.
Obviously, in order to maintain party consensus, Xi had to largely stick to the previously established phrasing. If anything, the resolution reaffirms the most important trends. These include strengthening the security apparatus and state-owned enterprises. The commitment to greater economic independence was also once again part of the canon of constantly repeated policy goals.
The pursuit of technical independence is also evident in the way cryptocurrencies like Bitcoin are handled. China has indeed banned trading, as well as mining. Nevertheless, there are Chinese providers like Huobi that continue their cryptocurrency operations. So China has sealed off this part of its financial system, yet it still wants to and can participate internationally, analyzes Frank Sieren. By current standards, a rather typical combination.
Beijing’s complicated relationship with crypto
The mining of Bitcoins needs power. If it is mainly generated by burning coal, Bitcoin mining quickly becomes an environmental problem. This is why China’s authorities want to crack down on crypto-mining even harder: The practice is “extremely harmful” and jeopardizes the country’s efforts to reduce its CO2 emissions, National Development and Reform Commission spokesperson Meng Wei said Tuesday. Institutions that “abuse” subsidized electricity rates to mine cryptocurrencies would face a price hike. Following her remarks, the bitcoin price dropped more than seven percent to $60,889, the lowest in more than a week. Ethereum, the second-largest digital currency, also slid more than eight percent on Tuesday.
In fact, the People’s Republic had already officially pulled the plug on crypto mining in September: Since then, mining and trading with digital currencies have been practically banned. However, illegal mining continues, which is why Beijing upped the ante.
China is very critical of the growing market of independent cryptocurrencies: Decentralized cryptocurrencies like Bitcoin elude the control of the state, after all. With digital currencies, it would be possible to move large amounts of money out of the country and undermine Beijing’s strict capital controls. But these are important to Beijing because they allow the leadership to prevent the country from bleeding out financially, as it happened to Russia in the 1990s.
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