To fellow US interest rate hike or to cut rates?

Emerging economies in a dilemma on whether to follow suit or cut rates

“Specifically, we expect rate cuts in India, Indonesia, South Korea, Taiwan and Thailand in 2016. We also project a further 75bps of rate cuts and a 200bps reduction in RRR in China'. - Credit Suisse

THE big question is what happens next?

The much anticipated hike in US interest rates on Thursday meant that for the first time in almost a decade, US interest rates are on the way up. The 25 basis point (bps) rise in US interest rates by The Federal Open Market Committee (FOMC) to between 0.25% and 0.5% was made as the US economy showed tangible signs of improvement.

Such gains in the US economy through lower unemployment and higher forecast inflation has meant that the target for interest rates by the end of 2016 has been pegged at 1.5%, meaning that rates are expected to rise by 25 basis points every quarter until the end of next year.

The implications of what the US FOMC does reverberates throughout the world. Conventional thinking of the past is that higher rates in the US does put pressure on central banks elsewhere to follow suit.

But times have changed. Countries today have their own domestic economies and issues to manage and that has taken precedence over what the US does with its monetary policy.

It is clear that the de-coupling has taken place a long time ago. The European Union and Japan are still engaged in quantitative easing and are keeping rates near zero or in the case of the EU, in negative territory.

For Malaysia, the thinking is that with the difference between domestic and US interest rates still having a nice cushion, the focus of Bank Negara will be on the Malaysian economy.

Rate pressure: Should the path of the US rate cycle starts to steepen, economists say it will put pressure on Bank Negara as the ringgit may be pressured by inaction. – Reuters Countries such as China cut its interest rates in October to 4.35% as it grapples with a slowing economy. Different priorities call for different action.

But analysts feel the move by the US does create a bit of a dilemma for policy makers. Raising rates does cool an economy, which is already shifting to a lower gear given the tangible cooling of major economic indicators.

Trimming interest rates further, while will help the economy, will put more pressure on the flow of capital. Analysts feel that might not be what the central bank will want to do at the moment considering the weakness of the ringgit not only against the US dollar this year but also against the currencies of its major trading partners.

“Our rate is accommodative for economic growth and Bank Negara can raise rates when the economy is slowing down,” says an economist with a local brokerage.

To each its own

The United States has been the traditional locomotive of growth for the world for much of recent history. But the emergence of China has changed that equation. Trade of the emerging world increases with China as the second largest economy of the world grows, its influence on Malaysia and the rest of Asia has become more affixed.

It is for that reason that some are speculating that emerging economies, such as Malaysia, will keep its eyes focused on what the People’s Bank of China does while having the US action in its periphery vision.

“We argue that Asian central banks’ monetary policy stance next year will be more influenced by economic and monetary policy cycles in China than in the past, and will diverge from the US. Unlike the previous US Fed hiking cycle when virtually all Asian central banks tightened their policies, we think this time Asian policy rates will stay lower for longer,” says Credit Suisse in a report.

“Specifically, we expect rate cuts in India, Indonesia, South Korea, Taiwan and Thailand in 2016. We also project a further 75bps of rate cuts and a 200bps reduction in RRR in China.

“Given the challenging environment for exports, we expect growth in trade-dependent economies including Hong Kong, Malaysia, Singapore, and Thailand to surprise the consensus on the downside. Meanwhile, more domestic-oriented economies with policy catalysts, including Indonesia and the Philippines, could outperform expectations considerably,” it says.

For Malaysia, the FOMC decision was keenly watched. Any time US interest rates move, Bank Negara pays close attention to it.

Is it the key determinant for the direction of domestic interest rates?

No, say economists. “Local conditions override what the US does,” says an economist.

For Malaysia, economists believe that the current overnight policy rate of 3.25% is appropriate to support growth. But they do too acknowledge that Malaysia is in a dicey situation depending on what happens next.

The general view is that the US will continue to push rates upwards. Just how rapidly will be important and as US rates goes up, the differential with Malaysia will narrow.

“If the local economy does as it is predicted, then there is a possibility of a small hike next year but there is no urgency to do that,” says an economist.

The question is what happens after next year should the path of the US rate cycle starts to steepen?

Economists say that will put pressure on Bank Negara as the ringgit might be pressured by inaction. As it is, the drop in crude oil prices is the most pressing issue affecting the value of the ringgit.

The effect on emerging currencies

Emerging markets have had a series of bad press over the past year. With sentiment souring and the outlook in the US getting brighter, it was no coincidence that the US dollar surged, gaining about 40% on average against emerging market currencies since May 2013.

But is it time for things to change?

Schroders thinks that might happen.

“It is difficult to argue that the Fed has been the sole factor in emerging market debt weakness. China hard landing fears, plummeting commodity prices, Brazilian political disarray, Russian policy concerns and general weakening of growth across all regions created a near perfect-storm for emerging market debt investors.

“However, a more predictable and less fraught path going forward for the Fed should help steady investor nerves and risk appetite. If developed market bond yields remain very low – as seems likely with a very slow hiking path, set out with some confidence – emerging market dollar yields may remain one of the few places to look for meaningful income generation for years to come,” it says.

Schroders says the move by the US Federal Reserve comes at a time when emerging market dollar debt seems particularly attractive.

“Yields in the primary sovereign dollar index are at highs not seen since 2010, when Treasury yields were much higher than today. Yield spreads over Treasuries for investment grade sovereign debt are just under 300 basis points, and remain at elevated levels that were last seen consistently during the European crisis of 2011. High yield sovereign debt currently has a yield to maturity of 8.5%.

“The divergence between developed market monetary policies has driven the dollar nearly 20% higher on a trade-weighted basis since July 2014. Emerging market currencies have fallen in lock step.

“With the European Central Bank now charting a path towards a steady dose of quantitative easing as growth in Europe stabilises, Fed predictability should help curb that dollar appreciation. Emerging market currencies should then likely steady at attractive levels, boosting sentiment towards the asset class. Even a modest virtuous cycle led by these factors could make emerging markets one of the strongest global fixed income performers next year, given today’s generous yield levels.”

By Jagdev Singh Sidhu The Star/Asia News Network

Related post:

The global impact of the US interest rate rise

Fear factor: Traders working in the S&P options pit at the Chicago Board of Options Exchange in Chicago, illinois. The prospect of th...

The global impact of the US interest rate rise

Fear factor: Traders working in the S&P options pit at the Chicago Board of Options Exchange in Chicago, illinois. The prospect of the first hike in US rates in almost a decade had kept emerging markets on edge in the weeks leading up to the Fed’s decision.

A quarter of one per cent hike as expected.

It doesn't sound like much - but its significance is mighty.

After nearly a decade of what has been, essentially, a global economic effort - and experiment - to save the world from financial calamity, the Federal Reserve, the central bank to the world's largest economy, has decided, finally, to try a touch of "normalisation".

Getting economies "back to normal" was always the hope during that remarkable time when the financial system was in danger of going bust.

Central banks around the world slashed interest rates to near zero and created billions of pounds of support for governments and the wider economy.

I'm not sure anyone thought that, eight years on, we would still be in a near zero interest rate world. Or, in cases such as the eurozone, a negative interest rate world.

Fundamental damage

The financial crisis - a banking crisis which so damaged confidence and put the world in "risk-off" mode - more fundamentally damaged the global economy than many initially predicted.

Paying off debts - deleveraging - and not taking on more risk became the order of the day for governments that had over-borrowed and banks, businesses and consumers that had become drunk on easy credit.

Now the Federal Reserve has moved interest rates up a small notch.

The hike is a "doveish" one, with the Fed statement making it clear that any future increases will be "gradual".

Primarily, the rate rise is a signal about the strength of the US economy and shows that the chairwoman of the Fed, Janet Yellen, believes that the long march back to more normal economic conditions can begin.

Employment levels in America are high and growth is running at just over 2%.

Ms Yellen, a cautious governor, does not want to overdo it. She says the pace of growth in the US economy is "modest". And inflation is below target.

Global implications

When America stirs, the rest of the world takes notice.

Rising US interest rates could mean higher debt repayments for emerging market governments and businesses - as the amount owed is denominated in dollars.

And with higher interest rates in America, investment capital will be encouraged across the Atlantic and away from Asia in the hunt for better returns.

That could affect Europe as well.

On the upside, the stronger dollar which has followed the rise might be good for European and Asian economies as it means exports to America are cheaper.

UK interest

Could it increase pressure on Mark Carney, the Governor of the Bank of England, and his colleagues on the Monetary Policy Committee, to raise interest rates in Britain in 2016?

Many say yes.

The UK economy is strengthening, as is America.

The Bank insists the positive signs are not yet strong enough, but with employment rising and wage increases above the rate of inflation, a 2016 interest rate rise is certainly considered possible by many economists, including Sir Charlie Bean, the former deputy governor of the Bank of England.

Mr Carney has made it clear, in a way similar to the Federal Reserve, that when a rate rise comes it will be small and any subsequent increases will be gradual.

Homeowners with mortgages will need to factor in higher payments.

Savers who have seen years of very low interest rates are likely to heave a sigh of relief as, finally, the world starts approaching economic normality.

By Kamal Ahmed Business editor BBC

Markets rise on rate hike - However, concerns linger on adverse impact of further increases

PETALING JAYA: Key regional markets, including Bursa Malaysia, reacted positively to the United States Federal Reserve’s (Fed) first interest rate hike in nine years, although concerns linger on the impact to be felt on the future rate hikes anticipated to take place next year.

In a knee-jerk reaction to the rate rise, which sent out a signal that the US economy was now on a stronger footing, the local key benchmark index, the FTSE Bursa Malaysia KL Composite Index, closed 1.37% or 22 points up to 1,656 points, with market breadth across the bourse generally positive.

World Bank country manager for Malaysia Faris Hadad-Zervos said the issue of the Fed hike had been the longest-talked-about and most-anticipated one to date.

“It is still too early to tell the impact of the move, but our analysis so far indicates that the Malaysian Government policy and market have long internalised the move into their estimates and sentiment about the economy.”

Yesterday, the Fed raised its key interest rate from a range of 0% to 0.25% to a range of 0.25% to 0.5%, signalling that the economic health of the world’s largest economy had improved since the days of the 2007/2008 financial and subprime crises.

“I feel confident about the fundamentals driving the US economy, the health of US households and domestic spending,” CNN Money quoted Fed chief Janet Yellen as saying. Yellen was reported to have said that further increases would be gradual, with rates likely to remain low “for some time”. Economists in the US have predicted that the Fed could raise the rates by between 50 basis points (bps) to 100 bps next year.

While yesterday’s rate hike caused emerging markets to react positively, as most of them had already priced in a rate hike in the US, concerns of further increases on interest rates on capital flows remained.

The biggest fear is that investors would take even more of their capital out of emerging markets, which have enjoyed rapid growth in recent years, and move it to the US, which presumably will yield higher returns now that its economy is firmly on the path to recovery.

Already, investors have pulled out about US$500bil from markets in emerging countries in 2015, the first annual outflow since 1988, Forbes reported, citing the Institute of International Finance estimates.

Notably, a strengthening US dollar will negatively affect regional companies which have dollar-denominated bonds.

In its Asean strategy report entitled “May the Fed be with you”, Nomura Research noted that lower commodity prices, fiscal consolidation and rising costs were weighing down on domestic demand in Malaysia even as the export sector continued to perform well and support overall growth.

“Stocks to focus on will likely be ones that are cheap, large-cap, higher-yielding and ones more recently under pressure. But it is still unlikely that Malaysia will outperform, given the weaker earnings outlook,” Nomura told clients.

It added that banks offered “earnings visibility at cheap valuations”, while healthcare stocks and exporters benefited from the depreciation of the ringgit.

Year-to-date, the ringgit has lost as much as 23% against the US dollar, making it one of the worst-performing currencies in the region although it strengthened against the greenback and other key regional currencies at yesterday’s close.

Interestingly, Nomura said the Philippines offered the best growth prospects and it was “overweight” on it.

“Despite the recent correction and negative momentum in earnings revisions, the macro fundamentals remain very favourable for double-digit earnings growth next year,” it said.

Elsewhere in the commodity markets, crude oil continued to be under pressure owing to more supply than demand, with the benchmark West Texas Intermediate and Brent crude oil prices trading at US$35.52 and US$37.19 per barrel, respectively, almost 50% down from June last year.

By Yvonne Tan The Star/Asia News Network

A sigh of relief from Asian central bankers - Regional currencies and stocks reat favourably to US rate hike

SYDNEY: Asian governments and central bankers has breathed a collective sigh of relief after currencies edged up and stocks rallied rather than recoiled at the US Federal Reserve’s decision to raise interest rates.

The prospect of the first hike in US rates in almost a decade had kept emerging markets on edge in the weeks leading up to the Fed’s decision, amid fears investors would redirect capital to higher-yielding US debt in a fresh blow to their shaky economies.

However, an initial rally smoothed the brows of Asian central bankers who were the first to respond to the hike as US policymakers sought to end an era of ultra-low rates that followed the global financial crisis.

“It is a relief that even despite the Fed rate hike, turbulence in global financial markets has not been large,” said South Korea’s Vice-Finance Minister Joo Hyung-hwan.

The more composed initial reaction was aided by the fact the Fed had clearly flagged the move in advance, and also said the pace of tightening would be gradual – an important signal for many asset markets adjusting to less stimulus after years of flush Fed liquidity.

However, Citibank’s Asian economic team said while equities and credit market had perked up, the response of commodity market suggested caution.

“We have long argued that early signs of growth in emerging markets would be seen in commodity markets, so we take heed that neither energy nor metal prices shared the optimism of the equities and credit markets,” the analysts said in a report.

Hong Kong’s top central banker, who was obliged to immediately match the Fed’s hike under the Chinese-run city’s peg to the US dollar, said he expected only a modest outflow of capital as a result of the central bank’s move.

China’s central bank also added to the reassuring mood, pencilling in economic growth of 6.8% for next year in a working paper released on Wednesday, down only slightly from an expected 6.9% this year.

A senior researcher at an official Chinese think tank chimed in, saying the hike would not lead to major economic disruption.

Zeng Gang, director of the Chinese Academy of Social Sciences banking research division, told the official People’s Daily paper that as the rate rise had been widely expected, it had been priced into markets and the announcement impact was limited.

Data showing drops in exports from Japan and Singapore, including big falls in shipments to China, sounded some of the few sour notes yesterday, but Tokyo too voiced relief that emerging markets were taking the US rate hike in their stride. — Reuters

World Internet Conference 2015 Live from Wuzhen, China

Video: President Xi Jinping delivers keynote speech at WIC

Chinese President Xi Jinping began to deliver a keynote speech at the opening ceremony of the Second World Internet Conference (WIC) held in the river town of Wuzhen in east China's Zhejiang Province Wednesday.

http://english.cntv.cn/2015/12/16/VIDE1450236360367156.shtml



Xi calls for: No double standards in cyber security, cyber sovereignty, inclusive Internet community to build shared cyber future

WUZHEN, Zhejiang, Dec. 16 (Xinhua) -- Chinese President Xi Jinping on Wednesday called for joint efforts to combat cyber crimes and Internet terrorism, while underscoring that there should not be any double standards in safeguarding cyber security.

"We can not just have security for one or some countries, leaving the rest insecure, still less should one seek the so-called absolute security of itself at the expense of security of others," Xi said in a keynote speech at the opening ceremony of the Second World Internet Conference held in the river town of Wuzhen, east China's Zhejiang.

Cyberspace is for all mankind. Its future should be in the hands of all nations and countries should step up communication, broaden consensus and deepen cooperation, the Chinese president said.

Xi Jinping has put forward five proposals to build a community of shared future in cyberspace.

Speaking at a government-organised conference in Wuzhen Town attended by executives of global and Chinese Internet companies, he called for efforts to speed up the building of global cyber infrastructure and promote connectivity.

“China stands ready to work with all parties concerned to come up with more investment and technical support to jointly advance the building of global cyber infrastructure and enable more developing countries and their people to share the development opportunities brought by the Internet,” Xi said.

China's President Xi Jinping laid out his vision for the internet, calling for respect of different governance models and standardized online security, placing China at the front of debates on online control and sovereignty.

"Each country should join hands and together curb the abuse of information technology, oppose network surveillance and hacking, and fight against a cyberspace arms race," Xi told China's second World Internet Conference.

Major Internet players such as Facebook, Microsoft, and China's Alibaba attended the conference.

Participants hail President Xi's remarks at WIC

Participants hail President Xi's remarks at WIC.

Commentary: "Shared and governed by all" only way for Internet to get out of "Hobbes Jungle"


BEIJING, Dec. 16 (Xinhua) -- Twenty-eight years ago, the founding father of the German Internet Dr. Werner Zorn helped Beijing send its first email to the outside world, which said: "Across the Great Wall we can reach every corner in the world."

However, today, China, together with other developing countries, still find themselves trapped in a jungle due to an expanding digital divide and a lack of joint governance.

The divide, a technological gap between developing and developed countries on an international scale, is mainly caused by some Western countries' arrogance and monopoly of information and communication technologies.

For example, the central nervous system of the global Internet with 13 root severs is completely dominated by the West, with the United States having 10 root severs while Britain, Sweden and Japan possess one respectively.

The ever-enlarging gap is detrimental to the stability and sustainable development of the international community, leading to anarchy in cyberspace and to some extent, gradually transforming it into a Hobbes Jungle where the stronger always has a bigger say over the destiny of smaller ones.

In addition, the divide has begun to show side effects like cybercrimes or even cyberterrorism as it accelerates social inequality, which provides fertile ground for extremism.

Like China, the United States is also a victim of cyberanarchy and such side effects. The recent shooting rampage in southern California, where two attackers radicalized by fanatical propaganda of the Islamic State (IS) on the Internet opened fire on innocent people, has sent a strong signal to Uncle Sam and its Western allies that they need to share and govern cyberspace with others.

After all, the Law of Jungle is relentlessly fair to everyone. In the long run, it neither favors the United States for its preponderance nor discriminates against the IS for its extremism.

In this sense, the opening of the Second World Internet Conference on Wednesday in China's Wuzhen with the theme of "an interconnected world shared and governed by all -- building a community of common future in cyberspace", is a boon to nations worldwide threatened by the Law of Jungle.

If they want to get out of the jungle, they should bear three things in mind.

First, teamwork. Treat each other with respect and equality. The jungle is too enormous for egoism. Selfishness and hegemony worship will only ruin the mission. So the hefty ones like the United States should learn to cooperate if they want to defeat common enemies like cybercrimes.

Second, sharing. Don't let the smaller ones be knocked out. Help them grow. Otherwise, they will become accomplices of the jungle. The Western countries who enjoy early advantages of information technology should loosen their restriction on technology transfers to developing countries.

Thirdly, joint governance. Never seek hegemony in decision-making. There are many paths to leave the jungle and the one you choose may not suit others. The governance of cyberspace needs the participation of all parties and all voices should be heard before a final decision is made.

By Tian Dongdong Xinhua

Cyber security depends on US cooperation

US President Barack Obama delivers remarks next to Secretary of Homeland Security Jeh Johnson (L) at the National Cybersecurity and Communications Integration Center in Arlington, Virginia, January 13, 2015. [Photo/Agencies]

China's attempts to cooperate with the United States to safeguard the strategic stability of cyberspace have been welcomed, as the Chinese mainland and Hong Kong have suffered a series of high-profile cyber attacks this year, according to the latest PricewaterhouseCoopers Global State of Information Security Survey. The average financial loss caused by cyber-crimes in the region, says the report, rose 10 percent year-on-year to $2.63 million, compared with a 5 percent decline globally.

In cooperating to safeguard cyberspace, Beijing and Washington could seek the Internet equivalent of the code of safe conduct agreed between their militaries to avoid naval and air encounters, which has helped manage several bilateral disputes.

The two countries should first try their best to not point the finger at each other in case a conflict over cyber security emerges. The latest round of tensions in cyberspace started in early 2013, when American private security company Mandiant released a report, "APT1: Exposing One of China's Cyber Espionage Units", accusing the Chinese military of stealing US intellectual property.

Such a hysterical attitude, to a point, reflects the US' anxiety over China's impressive economic growth in the recent years. It is, therefore, important that the US seek to adjust its strategic perception of China and accept that the power gap between them is closing.

Beijing, on its part, ought to make more efforts to make its ideas clear to acquire a bigger say in global cyber-security affairs. Besides, neither country, especially the US, should make a habit of "making enemies" by taking irresponsible actions, even for the sake of national security.

True, most cutting-edge technologies in the age of the Internet can be lawfully and strategically used to gather military intelligence and keep cyber attacks at bay. But highly politicized discussions and operations, which used to be kept secret, can now be made public by the media today. So the challenge is to keep such details confidential.

In regard to China-US cyber cooperation, the major problem lies in Washington's attempts to create enemies for political motives. Tactics such as exaggerating the perils of the so-called Chinese cyber-attacks and intimidating the American public and legislature with some selectively chosen materials, for example, have been routinely used by the US cyber-security authorities to create more room for political maneuverings and get more military budget.

Such tricks may have eased some of their pressure to safeguard homeland security, but they have come at the cost of cyberspace stability which China and the US both need. They have also failed to protect the two countries' national interests, which need them to closely coordinate rather than oppose or accuse each other.

Washington should also be careful about its military industry, which is basically bolstered by certain security enterprises and departments trying to abduct the national security policy.

For some US security companies, gathering evidence on the imaginary cyber-attacks from China to help thwart them in the future can guarantee the consistent increase in their market values. Likewise, relevant governmental organs also tend to overstate the cyber security issue to increase their budget and influence security affairs.

China and the US should not let such parochial and hawkish mindset affect Washington's cyber-security strategy, because neither country can emerge as winner in a cyber war; in fact, such a war will cause huge damage to the world. As a responsible major power, the US is obliged to push forward the China-US strategic dialogue on cyber security to make global cyberspace more stable, rather than using double standard to defend its controversial strategy and tactics, and condemn China for absurd reasons.

By Shen Yi (China Daily)
The author is an associate professor in the Department of International Politics at Fudan University in Shanghai.

China key to turning cyberspace truly global

A visitor tries out wearable device at the Light of the Internet Expo in Wuzhen, Zhejiang province, Dec 14, 2015. [Photo /chinadaily.com.cn]

China holds a pivotal role in the Internet. It had more than 650 million Internet users by the end of last year and it is the largest and fastest growing information and communications technology consumer market in the world. The Chinese ICT sector is currently valued at €433 billion ($477.472 billion) and it is growing at an annual average rate of 7 percent, the fastest in the world. The country has made tremendous progress in Internet development in the past decade having become the most active e-commerce market in the world.

However, if we look at the distribution of the world's ICT sector, China does not rank first. It ranks third. In 2012 China accounted for 13 percent of the world's ICT, behind the United States (32 percent) and the European Union (23 percent). In the same year, the value of the EU's ICT sector exceeded €516 billion.

These figures show the tremendous growth opportunities of China's ICT industry. Obviously, the strategy should not be just to copy leading brands or seek to produce "Chinese" products. The ICT industry is not the car industry. It doesn't just produce a series of final products; it produces interconnected systems too. In the ICT industry, we cannot innovate in isolation. Each single new product or system needs to be compatible — to interoperate — with those of upstream service providers and of the applications that users want.

Even more than in other globalized industries, the keyword in ICT is specialization. In other words, China should not promote investments in areas where other countries or economies are strong, but seek cooperation instead. In this regard, an analysis of the ICT statistics of China and the EU show how complementary China's and Europe's ICT sectors are.

China is very strong in manufacturing — more than 50 percent of the ICT sector comprises the manufacturing of telecom equipment, consumer electronics and electronic components. The EU instead dominates in high-end innovative services and IT applications, which together account for more than 55 percent of regional ICT sector.

The EU is a major technology hub and it can provide a key contribution for the growth of new ICT markets in China if adequate cooperation agreements are timely discussed and concluded, for example, in niche markets like the Internet of Things, smart cities, big data, e-health, cloud services, which will drive growth in the ICT industry in the next decade.

But opportunities for cooperation also exist in the "traditional" telecom segment. China and the EU are home to the world's major telecom vendors. Synergies in 5G development are clear, especially following the signing of the EU-China Agreement on 5G last September in Beijing.

The EU-China political and economic relationship is very developed, though there are some challenges, which we need to overcome to improve cooperation in the digital field, such as the lack of mutual understanding of the reciprocal markets, divergences in the approach to cyber security and, related to it, a lack of global Internet confidence. Moreover there are substantial regulatory divergences between the Chinese and EU rules, for example, on consumer protection and data protection.

The EU has just started its ambitious "Digital Single Market" strategy, which should in the coming years reduce barriers to doing business across the EU's internal borders, provide EU companies scale and resources to grow and make the EU an even more attractive location for global companies.

The EU's Digital Single Market strategy will offer substantial investment opportunities to Chinese ICT companies.

However, in the global Internet ecosystem, the concept of attracting investment by making one's investment conditions more attractive than those in competing economies is outdated. We need a global single, open cyberspace.

The second World Internet Conference in Wuzhen, Zhejiang province, could be the starting point of discussions between China and the EU, for instance, on how to facilitate online purchases of digital contents and to promote affordable high quality parcel delivery. Obviously, at a later stage anecdotal evidence should be complemented thorough academic study of respective Internet regulations in China and the EU.

By Luigi Gambardella (China Daily)
The author is president of ChinaEU, a non-profit platform aiming to boost bilateral digital cooperation.

Related:

Wuzhen showcases China’s Net prosperity

If we all apply the rules of the US, many societies could not afford the consequences.
Source: Global Times | 2015-12-16 0:48:01

Aerial view of Wuzhen, venue for World Internet Conference

Wuzhen World Internet Conference 2015

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