Tag Archive 'China'

Aug 12 2011

China Asks Dollar To Be Replaced!

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Hot on the heels of the news that rating agencies Fitch, Moody’s and Standard and Poor’s lowered the U.S. credit rating from AAA to AA+, comes now the insult to the injury with China now spewing venom on the Obama administration and confidently expressing that the world needs another reserve currency that can replace the dollar!

The U.S. dollar is the world reserve currency and the U.S. debt became the collateral for supporting global finance. Now of course critics are raging loud!

China owns US government bonds worth a whopping $ 1.1 trillion, while China’s foreign exchange reserve exceeds $ 3.2 trillion. Experts estimate that about 60-70% of that is in dollar-denominated assets. Now American authorities are being sharply criticized for their bungling big time in preventing a decline in their credit rating.

China’s state news agency, Xinhua, emphasizes that no longer can US “loan themselves the amount necessary to get out of the financial mess they have created in the first place…The world should be looking for a new reserve currency to replace dollar.”

Japan, which is the second largest creditor to the U.S., and South Korea, the two prominent partners to the U.S. have taken this statement rather calmly. A representative of the Japanese authorities has said on terms of anonymity that, “The credibility of the US government T-Bills and the investment in them will not diminish after this event.”

Russia, however, seems to have taken the greatest impact of this crisis. Though Moscow is pretending to have no reason to worry, fall in trading by 3% soon after it started shows the obvious effects. Moreover, due to exchange rate differences the National Fund in Russia has lost greater than 108 billion rubles.

Now it remains to be seen how the cookie crumbles for the rest of the world with it literally baking in the U.S. financial crisis!

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Jun 08 2011

Cyberattacks From China On Gmail…An Act Of War?

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Once again internet wars between Google and China continue to fuel the political cinders. A cyberattack has been launched by China with a breach of Gmail accounts of hundreds of high-profile individuals in several nations, or at least that is what the tech giant claimed on June 1, 2011.

U.S. and United Kingdom military officials, just a day prior to this, acknowledged that nation-spurred cyberattacks could be an act of war. With reports of frequent break-ins at major defense operations and other similar disclosures, one wonders if there is some meat to these claims.

Google is calling it a deliberate attempt to mar the Gmail service by making the problem appear to be with the service itself. Google representatives stated “We have checked extensively. This is a government blockage carefully designed to look like the problem is with Gmail.” Eric Grosse, engineering director of Google’s security team, said that in a campaign to collect Gmail users’ passwords, the hackers targeted the accounts of “senior U.S. government officials, Chinese political activists, officials in several Asian countries (predominantly South Korea), military personnel and journalists.”

However, Google is not new to this in the country. Since 2006 when they first entered the Chinese market the two have exchanged blows that seem one too many. Even so, Google has had to submit to the demands of the eastern giant time and again. The Chinese market is just too large to erase and forget and so Google succumbed to the Chinese demands and applied censorship policy to the Google.cn service.

So what one wonders is that Google doing it again?—going down on its knees in the face of losing a market of 338 million customers, because in spite of the cyberattack claims from the Chinese, it hasn’t as yet struck back. Google perhaps has come to terms with the fact that it has landed in a ‘hot-and-sour’ soup by entering this market and must keep a defensive stance, knowing what is at stake.

Another debate that this entire episode has sparked off is that of whether this whole cyberattack was a “phishing” attempt or was it “hacking”? What do you think? Is it phishing, hacking, or an ACT OF WAR? Tell us all your views!

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