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Companies in TPP member countries may reduce reliance on US



That’s entirely possible, said Alexander Capri, visiting senior fellow at National University of Singapore. Still, it’s nearly impossible for companies to completely ignore the U.S., he added.

To leapfrog American tariffs, some Pacific-based corporations that can’t afford to be excluded from the U.S. market may move manufacturing stateside, which would harmonize with the White House’s wishes, Capri explained.

Many have warned that Trump’s decision to exit the TPP places the U.S. at a competitive disadvantage in trading with TPP members, particularly in agriculture.

“For example, under CPTPP, Australian beef exporters will now pay only a 9 percent tariff on their sales in Japan, while their U.S. competitors will continue to face a basic tariff rate of 38 percent,” the Center for Strategic and International Studies said in a note.

The landmark agreement is widely anticipated to expand in size, potentially including countries such as Thailand, the U.K. and South Korea.

The “fear of losing out through trade diversion may give others an incentive to join the pact,” Roland Rajah, director of the international economy program at Australian think tank Lowy Institute, said in a note last month.

Still, it’s too early to assess what impact the new pact will have in upholding the agenda of open markets, international cooperation and a rules-based system, he cautioned.

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Facebook-backed Diem is moving from Switzerland to the US



The logo for Diem, formerly known as Libra, is seen is displayed on a smartphone screen with a Facebook logo in the background.

Pavlo Gonchar | SOPA Images | LightRocket via Getty Images

LONDON — Facebook-backed digital currency project Diem said Wednesday it has withdrawn its application for a Swiss payment license and will instead shift its operations to the United States.

The Diem Association, which oversees development of the Diem digital currency, had been pursuing a payment system license with Switzerland’s FINMA watchdog. Diem has now dropped plans to secure Swiss regulatory approval, while its U.S. subsidiary has partnered with Silvergate, a California state-chartered bank, to issue the token.

“While our plans take the project fully within the US regulatory perimeter and no longer require a license from FINMA, the project has benefited greatly from the intensive licensing process in Switzerland and the constructive feedback from FINMA and more than two dozen other regulatory authorities from around the world convened by FINMA to consider the project,” Stuart Levy, Diem’s CEO, said in a statement.

Diem said it plans to move its operational headquarters from Geneva to Washington, D.C., where its U.S. unit is based.

FINMA declined to comment when contacted by CNBC.

Formerly known as Libra, Facebook’s vision for a digital currency was met with a severe backlash from regulators when it was first announced in June 2019, with central bankers and politicians worried it could undermine sovereign currencies like the dollar, enable money laundering and infringe on users’ privacy.

The organization has since lost several key backers — including Visa, Mastercard and PayPal — and suffered a number of notable executive departures.

Diem had initially proposed a universal currency tied to a basket of major currencies and government debt. After much regulatory opposition, the group then switched its focus to multiple “stablecoins” backed one-to-one by different currencies, as well as one multi-currency coin.

For now, Diem is only planning to issue a U.S. dollar-backed stablecoin, called Diem USD. Unlike bitcoin, which uses a public ledger system and isn’t controlled by any single authority, Diem’s technology will be open to only a few participants, such as Facebook and other members of the Diem Association. Stablecoins are also designed to avoid the price volatility seen in cryptocurrencies like bitcoin.

Silvergate will be the exclusive issuer of Diem USD and will manage its dollar currency reserve. Silvergate has become a go-to for cryptocurrency businesses shunned by traditional lenders.

Diem is preparing to launch a pilot with its dollar-pegged stablecoin later this year, a person familiar with the matter told CNBC in April. The pilot will be small in scale, focusing largely on transactions between individual consumers, the person said.

Digital currencies have been the talk of Wall Street lately thanks to a wild rally in bitcoin and other digital currencies. Institutional investors have shown growing interest in bitcoin, while major firms like Tesla and Square have made big bets on the digital coin.

At the same time, central bankers are also grappling with the concept of digital currencies. The People’s Bank of China has been racing ahead with trials of its digital yuan in various cities. And there have been growing calls for the U.S. Federal Reserve to develop a digital version of the dollar.

However, some in the crypto industry think that digital innovation around currencies might be best left to the private sector.

“Governments can help set the rules of the road and make sure monetary policy can be emitted, financial crimes can be thwarted. But the government shouldn’t be in the business of building technologies,” Jeremy Allaire, CEO of crypto firm Circle, told CNBC in an interview last week.

Dante Disparte, Diem’s former public affairs chief, left to join Circle last month. Circle and crypto exchange Coinbase helped launch a stablecoin called USD Coin, which has since seen growing acceptance with Visa now supporting payment settlement with the token. Meanwhile, tether, a controversial stablecoin, is currently worth over $57 billion, according to CoinMarketCap data.

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China’s aging population could be a ‘big shock’ to global supply chain



An ANZ economist warned on Wednesday that China’s aging population will have a big impact on the world as the global supply chain is highly reliant on the world’s second-largest economy.

China’s once-a-decade census released on Tuesday showed the population of the mainland grew to 1.41 billion people as of Nov. 1, 2020. That was the slowest growth rate since the 1950s.

“The trend of the old age dependency is going to rise … This is a warning not only for China, but also across the whole world, as China is the core of the supply chain,” Raymond Yeung, Greater China chief economist at ANZ, told CNBC’s “Squawk Box Asia.”

“Over the next few years, China will be losing 70 million (of its) workforce … so this is a big shock to the global supply chain.”

Two elderly women sit on a roadside bench in China. By 2050, one third of the Chinese population will be above 60 years old.

Zhang Peng | LightRocket | Getty Images

He added that another possible impact would be on financial markets, as China’s high savings rate has been supporting global markets. China has one of the world’s highest savings rates among individuals, and many retail investors are investing their extra cash, or the money is being held in pension funds.

The census also showed that births continued to fall, dropping 15% in 2020 — a fourth straight year of decline.

Experts have said that China’s aging problem goes beyond its one-child policy and that other changes are needed to boost growth as births fall and its population ages. Similar to other major economies, high housing and educational costs in China have deterred people from having children in recent years.

I think this is a very pressing issue, that China really needs to tame this grey rhino, as everybody knows the problem is there, everybody knows they need to do something.

Raymond Yeung

Greater China chief economist, ANZ

Yeung told CNBC that the country needs to boost its labor productivity instead.

He said that the country’s falling birth rate is unlikely to reverse, even if it relaxes its one-child policy.

“More importantly, China (should) continue to sustain growth through technological development, go for high tech, go for high value-add, go for transformation of the whole supply chain, in order to support the economic growth on a sustainable basis,” he said, adding that this is a “more realistic” approach than focusing on its population numbers.  

China’s economy has relied heavily on industries such as manufacturing that require large amounts of cheap labor. But rising wages are making Chinese factories less attractive, while workers will need higher skills to help the country become more innovative.

“I think this is a very pressing issue, that China really needs to tame this grey rhino, as everybody knows the problem is there, everybody knows they need to do something,” he said.

The term “grey rhino” refers to highly obvious, yet ignored threats.

— CNBC’s Evelyn Cheng contributed to this report.

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Study finds mixing vaccines increases risk of adverse reactions



A health worker injects a dose of the AstraZeneca-Oxford Covid-19 vaccine at a temporary vaccine centre set up at City Hall in Hull, northeast England on May 7, 2021.

OLI SCARFF | AFP | Getty Images

LONDON — A major U.K. trial assessing the benefits of mixing and matching Covid-19 vaccines has found that volunteers receiving alternating doses were more likely to develop mild to moderate symptoms.

The so-called “Com-COV” study, hailed as a “world-first” by the U.K. government and led by the University of Oxford, is examining the immune responses of trial participants given a dose of the Oxford-AstraZeneca vaccine followed by the PfizerBioNTech shot — and vice versa.

It reported on Wednesday that preliminary data shows participants receiving a mixed schedule of Covid-19 vaccines incurred more frequent reactions than those on standard non-mixed schedules.

Some of the mild to moderate symptoms reported among participants receiving a mixed vaccine schedule included chills, fatigue, feverishness, headache, joint pain, malaise, muscle ache and pain at the injection site.

The adverse reactions were found to be short-lived and there were no other safety concerns.

The data was recorded among participants aged 50 years and above. Researchers of the study said this means there is a possibility that adverse reactions to a mixed schedule of Covid-19 vaccines may be more prevalent in younger age groups.

It is thought that a mixed dosing schedule could lead to an increase in work absences the day after immunization against the coronavirus.

In a peer-reviewed research letter published in The Lancet international medical journal on Wednesday, researchers of the trial reported that when given at a four-week interval, both of the alternating vaccine schedules of the Oxford-AstraZeneca vaccine and the Pfizer-BioNTech vaccine induced more frequent reactions following the second dose than the standard non-mixed schedules.

“Whilst this is a secondary part of what we are trying to explore through these studies, it is important that we inform people about these data, especially as these mixed-doses schedules are being considered in several countries,” Matthew Snape, associate professor in Paediatrics and Vaccinology at the University of Oxford, said in a statement.

“The results from this study suggest that mixed dose schedules could result in an increase in work absences the day after immunisation, and this is important to consider when planning immunisation of health care workers,” he added.


Snape, who is also chief investigator on the trial, said it was important to underline the fact that there were no safety concerns, adding it remained unclear whether the immune response will be affected.

“We hope to report these data in the coming months. In the meantime, we have adapted the ongoing study to assess whether early and regular use of paracetamol reduces the frequency of these reactions,” Snape said.

Vials of the Pfizer-BioNTech Covid-19 vaccine at the Sun City Anthem Community Center vaccination site in Henderson, Nevada, U.S., on Thursday, Feb. 11, 2021.

Roger Kisby | Bloomberg | Getty Images

The Com-COV study is backed by £7 million ($9.9 million) of U.K. government funding by the Vaccines Taskforce and run by the National Immunisation Schedule Evaluation Consortium.

The study aims to evaluate the feasibility of mixing and matching Covid vaccines to help policymakers understand whether this could be a viable route to increase the flexibility of vaccination campaigns.

The trial initially recruited 830 volunteers aged 50 and above. In April, researchers expanded the program to include the Moderna and Novavax Covid-19 vaccines in a new study, known as “Com-COV2.” This added a further 1,050 volunteers to the program.

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