Finance

European rethinking their plans closed China

Published

2 years ago

September 21, 2022

BEIJING — European businesses in China are revaluating their market plans after this year’s Covid controls further isolated the country from the rest of the world, said Joerg Wuttke, president of the European Union Chamber of Commerce in China.

China’s stringent Covid policy has restricted international travel, and business activity — especially after a two-month lockdown this year in Shanghai.

The tough measures of the last two years initially helped China recover more quickly from the pandemic’s shock compared to other countries.

But the policy increasingly contrasts with a world that’s increasingly relaxing many Covid restrictions.

For European businesses, “we talk about a complete readjustment of our view on China over the last six months,” Wuttke told reporters at a briefing for the chamber’s annual China position paper, released Wednesday.

SHANGHAI, CHINA - JUNE 07: Buildings stand at The Bund at sunset on June 7, 2022 in Shanghai, China. (Photo by Zhang Zhuoming/VCG via Getty Images)

Foreign direct investment from Germany to China grew by about 30% in the first eight months of the year from a year ago, China’s Ministry of Commerce said Monday.

Vcg | Visual China Group | Getty Images

He said the lockdowns and uncertainty for businesses have turned China into a “closed” and “distinctively different” country that might prompt companies to leave.

So far, most companies haven’t left — only some very small ones, Wuttke said. But he pointed out the chamber isn’t able to survey businesses that decided not to enter China at all.

Foreign direct investment from the EU into China dropped by 11.8% in 2020 from a year earlier, according to the chamber’s position paper. More recent figures weren’t available.

I’ve been here on and off 40 years and I’ve never seen anything like this, where all of a sudden ideological decision-making is more important than economic decision-making.

“While there are still ‘a select group of high-profile multinational companies ready to make billion dollar splashes,’ the trend of declining FDI is unlikely to reverse while European executives are heavily restricted from travelling to and from China to develop potential greenfield projects,” the paper said.

China’s economy grew by 2.5% in the first half of the year, well below the official target of around 5.5%. Beijing indicated in late July the country might not reach that target.

Meanwhile, authorities have showed little sign of removing the so-called dynamic zero-Covid policy.

China has reduced quarantine time for international and domestic travelers. But sporadic lockdowns, whether of the tourist island of Hainan or the city of Chengdu, has kept business uncertainty elevated.

Wuttke said he expects the earliest China could open its borders is late 2023, based on the time needed to vaccinate enough of the population.

‘Ideology trumps the economy’

European businesses that have remained in China increasingly face an environment in which “ideology trumps the economy,” the chamber’s position paper said in its executive summary.

“I’ve been here on and off 40 years and I’ve never seen anything like this, where all of a sudden, ideological decision-making is more important than economic decision-making,” Wuttke said. “And maybe that’s also amplified by voices from the outside, America[n] sanctions, America cutting off China, so I can understand partly why self-reliance is so high on the agenda.”

He was referring to China’s push in the last few years to build up its own tech and other industries.

Meanwhile, among other measures, the U.S. has restricted its companies from supplying key components to Chinese tech companies such as Huawei.

The chamber did not specifically state what this ideology consisted of, but said China’s Covid policy embodies the country’s “move away from the rest of the world.”

The policy has not changed despite many lengthy, candid conversations with Chinese government officials, Wuttke said.

“I think these people, they are torn between what they see has to be done, could be done,” he said. “Then [there’s] a very stern, very clear directive from the top of, this is how it has to be, that’s the ideology. And how can you challenge ideology?”

Chinese President Xi Jinping said earlier this month that the country has “continued to respond to Covid-19 and promote economic and social development in a well-coordinated way,” according to a paraphrase of his remarks shared by China’s Ministry of Foreign Affairs.

While Xi said “China has entered a new development stage,” he maintained that “China’s door of opening-up and friendly cooperation will always be open to the world,” according to the release. His remarks came during his first trip abroad since the pandemic began – to Kazakhstan and Uzbekistan – during which he met with leaders of several countries in the region.

Over the last few years, the Chinese leader has sought to rally the country around the ruling Communist Party and his plans for the “great rejuvenation of the Chinese nation.” Xi is set to consolidate his power at a major political meeting next month.

China’s big market

Foreign businesses already in China are generally staying put for now.

Even if China’s economy grows more slowly, its size and the low base “actually makes a convincing case [for foreign businesses], we’re still going to make it,” Wuttke said.

Some, especially German auto giants, are investing more.

For the first eight months of the year, foreign direct investment from Germany rose by about 30% from a year earlier — faster than the 23.5% pace recorded for the first seven months, China’s Ministry of Commerce said Monday.

However, the ministry did not release updated figures for investment from the U.S., which official data showed had grown by about 36% in the first seven months of the year.

Foreign businesses can still find specific areas of opportunity.

China is improving local market access, albeit in areas where locals already dominate or are “desperate” for foreign investment, Wuttke said. “Otherwise, frankly, I would stop producing this paper.”

Crypto

Bitcoin’s Recovery – the Downturn Is Over

Published

5 months ago

July 16, 2024

The market is currently in a news-driven environment where the prices of cryptocurrencies have been determined by news agenda rather than fundamentals.

Bitfinex analysts have warned crypto investors to be cautious as bitcoin’s (BTC) recovery over the weekend is not a sign that its correction is over; the asset could witness more bloodshed in the near term.

In the latest Bitfinex Alpha report, experts deemed the market’s reaction this week critical, especially as supply alleviated over the weekend could return when traditional markets open.

“No Man’s Land”

Since Saturday, bitcoin has risen almost 10% from $57,600 to $63,000, closing last week in the green. The asset has surged above the 125-day range low of $60,200, which it broke through earlier this month after news of the German government’s massive BTC selling hit the market.

Market sentiment began to improve after reports that wallets linked to the German government were almost empty. However, the positive sentiment may not be sustained for long as the BTC the German authorities moved to trading desks and exchanges are yet to be sold.

While the supply from Germany appears to have been factored into bitcoin’s market price, Bitfinex analysts believe the end of selling pressure depends on how the involved trading desks execute their trades in the coming days.

Although the shift in sentiment underscores the market’s capacity to integrate new information and adjust expectations quickly, analysts think the market’s reaction over the first two trading days of the week cannot be overlooked for two reasons.

First, the low support level in the $60,200 range has now become a potential resistance line. Second, trading patterns over the past three months suggest that weekends are usually favorable for markets, especially on Saturdays when supply pressure seems to subside.

“We are now in no man’s land until we get clear resolution above or below this level,” the analysts said.

A News-Driven Environment

Besides the potential resistance level and three-month weekend trading pattern, the market is currently in a news-driven environment, where the prices of cryptocurrencies have been determined by news agendas rather than fundamentals.

Since selling pressure concerns are not yet completely obsolete due to upcoming Mt Gox creditor distributions, Bitfinex analysts expect such headlines to continue to have some impact on price movements. As such, the analysts urged investors to exercise caution in their trading strategies.

Reports /Trainviral/

Crypto

Bitcoin ETFs Saw $300M in Daily Net Inflows

Published

5 months ago

July 16, 2024

BlackRock’s IBIT led with $117.25 million in inflows on July 15, also being the most traded Bitcoin ETF.

The US spot Bitcoin ETFs recorded a daily net inflow of $301 million on July 15th. This extended their winning streak to seven consecutive days amidst a broader market recovery.

None of the ETFs recorded outflows for the day.

Bitcoin ETFs Rake in $16.11B in Net Inflows Since Jan

According to the data compiled by SoSoValue, BlackRock’s IBIT, the top spot Bitcoin ETF by net asset value, recorded the largest net inflows of the day at $117.25 million. IBIT was also the most actively traded Bitcoin ETF on Monday, with a volume of $1.24 billion. Ark Invest and 21Shares’ ARKB came in close behind with net inflows of $117.19 million.

Fidelity’s FBTC experienced net inflows of $36.15 million on Monday, while Bitwise’s BITB saw $15.24 million in inflows. VanEck’s HODL, Invesco and Galaxy Digital’s BTCO, and Franklin Templeton’s EZBC funds also recorded net inflows. Meanwhile, Grayscale’s GBTC and other ETFs, such as Valkyrie’s BRRR, WisdomTree’s BTCW, and Hashdex’s DEFI, registered no flows for the day.

A total of $2.26 billion was traded on Monday. The trading volume for these ETFs was less than in March when it exceeded $8 billion on some days. Meanwhile, these funds have collectively attracted $16.11 billion in net inflow since their January launch.

What’s Next For Bitcoin?

Earlier this month, bitcoin’s price decline was mainly due to fears of massive selling pressure from Mt. Gox and the German government’s BTC sales.

But the assassination attempt on pro-crypto former US President and presumptive Republican candidate Donald Trump at Saturday’s rally seemed to spark a recovery in the world’s largest digital asset, and experts are bullish on the asset’s price trajectory going forward. Bitcoin surged more than 9% over the past week and was currently trading slightly below $64,000.

Veteran trader Peter Brandt discussed bitcoin’s price outlook, suggesting a potential major rally. He referred to a pattern he terms “Hump->Slump->Bump->Dump->Pump” and highlighted that the July 5 double top attempt was a bear trap, confirmed by the July 13 close. He sees a likely continued upward trend but warned that a close below $56,000 would negate this bullish view.

“Bitcoin $BTC could be unfolding its often-repeated Hump…Slump…Bump…Dump…Pump chart construction. Jul 5 attempt at the double top was a bear trap, confirmed by Jul 13 close. Most likely scenario now is that bears are trapped. Close below $56k negates this interpretation”

Reports /Trainviral/

Crypto

LI.FI DeFi Platform Exploited, Over $8M Lost

Published

5 months ago

July 16, 2024

PeckShield alert reveals LI.FI’s protocol vulnerability is similar to a March 2022 attack, with the same bug recurring.

The decentralized finance (DeFi) platform LI.FI protocol has suffered an exploit amounting to over $8 million.

Cyvers Alerts reported detecting suspicious transactions within the LI.FI cross-chain transaction aggregator.

LI.FI Issues Warning After $8 Million Exploit

LI.FI confirmed the breach in a statement on July 16 via X: “Please do not interact with any http://LI.FI powered applications for now! We’re investigating a potential exploit.” The team clarified that users who did not set infinite approval are not at risk, emphasizing that only those who manually set infinite approvals seem to be affected.

According to Cyvers Alerts, more than $8 million in user funds have been stolen, with the majority being stablecoins. According to on-chain data, the hacker’s wallet holds 1,715 Ether (ETH) valued at $5.8 million and USDC, USDT, and DAI stablecoins.

Cyvers Alerts advised users to revoke relevant authorizations immediately, noting that the attacker is actively converting USDC and USDT into ETH.

Crypto security firm Decurity provided insights into the exploit, stating that it involves the LI.FI bridge. “The root cause is a possibility of an arbitrary call with user-controlled data via depositToGasZipERC20() in GasZipFacet, which was deployed 5 days ago,” Decurity explained on X.

“In general, the risks behind routers, cross-chain swaps, etc. are about token approvals. Raw native assets like (unwrapped) ETH are safe from these kinds of hacks b/c they don’t have approvals as an option. Most users & wallets also no longer do “infinite approvals” which gives a smart contract total control on removing any amount of their tokens. It’s important to understand which tokens you’re approving to which contracts.

This dashboard looks for all transactions of a user that intersects Lifi. Not all of these transactions indicate risk- but you can see how, broadly, integrations & layers of tech (like how Metamask bridge uses Lifi on BSC) can complicate how users do or don’t put their assets at risk. Revoke Cash is the most well known approval manager app.

But it’s also good security practice to simply rotate your address. New addresses start with 0 approvals, so starting fresh by moving your tokens to a fresh address is another good security practice.” – commented Carlos Mercado, Data Scientist at Flipside Crypto.

Recent Exploit Mirrors March 2022 Attack

Further analysis by PeckShield alert revealed that the vulnerability is similar to a previous attack on LI.FI’s protocol that occurred on March 20, 2022. That incident saw a bad actor exploit LI.FI’s smart contract, specifically the swapping feature, before bridging.

The attacker manipulated the system to call token contracts directly within their contract’s context, making users who had given infinite approval vulnerable. This exploit resulted in the theft of approximately 205 ETH from 29 wallets, affecting tokens such as USDC, MATIC, RPL, GNO, USDT, MVI, AUDIO, AAVE, JRT, and DAI.

“The bug is basically the same. Are we learning anything from the past lesson(s)?” PeckShield Alert said in a July 16 X post.

Following the 2022 incident, LI.FI disabled all swap methods in its smart contract and worked on developing a fix to prevent future vulnerabilities. However, the recurrence of a similar exploit raises concerns about the platform’s security measures and whether adequate steps were taken to address the vulnerabilities identified in the previous breach.

LI.FI is a liquidity aggregation protocol that allows users to trade across various blockchains, venues, and bridges.

Reports /Trainviral/