Page 147 - RusRPTAug24

year-on-year. In January-May, foreign investors bought 83 billion yuan (12 billion USD) more than they sold shares through the cooperation programs of the Shanghai and Shenzhen stock exchanges. However, in June, foreign investors clearly sold more of their holdings than bought new ones. The value of foreign ownership in mainland China's stock market is approximately 2,800 billion yuan. China's financial market is still very closed, and the proportion of foreign ownership in both the stock and bond markets is less than 3%. The issuance of yuan-denominated bonds by foreign players in mainland China (so-called panda bonds) has also increased since last year. At the end of 2022, the capital restrictions were eased so that the funds collected from the issuance of such bonds can be transferred abroad under certain conditions. Part of the reason for the attractiveness of Panda bonds is also the lower costs. Currently, China's nominal interest rate is clearly lower than, for example, the United States. In January-May, 81 billion yuan (11 billion USD) worth of Panda bonds were issued and their outstanding balance was 240 billion yuan (195 billion yuan at the end of 2023). However, the majority of issuers are companies that are registered overseas but have business and other connections in mainland China.
Central banks, on the other hand, have reduced the share and amount of the yuan in their foreign exchange reserves. The combined yuan reserves of the 149 central banks reporting to the IMF were worth $247 billion at the end of March, which is $84 billion less than in March 2022. The yuan's share of allocated reserves fell from 2.8 percent two years ago to 2.1 percent. Most of the central banks' allocated reserves were held in dollars (58.9%), euros (19.7%) and yen (5.7%).
President Vladimir Putin warned on July 17 that unregulated cryptocurrency mining risks overloading Russia’s electrical grid and causing widespread power outages. Russia’s Energy Ministry estimates that crypto mining consumes on average 16bn kilowatt-hours per year — or almost 1.5% of Russia’s total electricity consumption. “The figure continues to go up,” Putin said, listing the relatively cheap cost of electricity in Russia and access to equipment as some of the factors leading to an increase in crypto mining. Despite its restrictive laws on cryptocurrencies, Russia was the world’s second-largest crypto mining country after the United States in 2023. The previous leaders, China and Kazakhstan, have restricted crypto mining activities in recent years. Investigative journalists recently named the North Caucasus republic of Dagestan — which has been gripped by lengthy blackouts largely due to aging infrastructure — as the “capital” of crypto mining in Russia. In 2020, Putin signed a law that legalized cryptocurrencies as digital financial assets but banned their use from paying for goods and services. Russia established the blockchain-based “Digital Ruble” as a new form of legal tender in 2023. Last week, Russian lawmakers moved to legalize crypto mining while banning the circulation of cryptocurrencies in Russia.
The transition to mutual settlements in national currencies will contribute
147 RUSSIA Country Report August 2024 www.intellinews.com