China, a U-turn in the Making? – Trustnodes

China, a U-turn in the Making?


There is no country more difficult to read than China where recently ethereum nodes saw a big jump for unclear reasons.

Not least because they keep sending conflicting signals, with the most recent one being a return of Huobi to China where an agreement has been signed for a new headquarter, so raising the title question.

A battle of sorts between techies and the government has been waging arguably since 2013, but especially since 2017 when an imposed ban on crypto exchanges led to a comeback through USDT and Over the Counter (OTC) trading.

A crackdown on OTC trading recently was followed by a softening of sorts with China saying legitimate traders were not affected.

Before that the Chinese president himself, Xi Jinping, effectively sang a hymn to the blockchain in 2018, with the People’s Bank of China (PBoC) then quickly taking control to drill: blockchain not bitcoin.

They went on about some digital currency which has been in project since 2016 and always is brought up as some sort of carrot, with this recent OTC hammer maybe more PBoC than the Chinese government.

That may suggest some sort of power struggle between the central bank and the government, with the same also seen in Russia and India, but only in China has it led to a very hostile attitude by the government – at least as far as enforcement actions go – towards this space.

In that back and forth, this Huobi news may be a sign that for now the softer side is operating, perhaps maybe because they’re slowly beginning to realize that blockchain has two parts, the corporate and organic.

You can’t have one without the other, without the Defi and tokenization and all the innovation that generally comes from the bottom up based on the money making incentives that here are in a digital form as cryptos or tokens.

There’s also the bigger picture with it unclear what exactly happened in that recent meeting between the German Chancellor Angela Merkel and the Chinese Prime Minister.

Europe has deep concerns in regards to access to market, and that those were pointed out by Merkel is known, but not the exact details.

The hope of everyone is that there’s some sort of understanding where business and economic matters are concerned, and the clearest signal of such understanding would be the opening of crypto exchanges.

Until then China is unfree, and we don’t mean politically which is a matter for the Chinese people, but unfree economically where westerners are concerned.

The country has no independent judiciary which can enforce the rule of law, as if it did then the PBoC diktat would have been challenged as it was in India and successfully.

The Chinese parliament passed no law on the matter, and therefore the banning of crypto exchanges was an executive enforcement based on a PBoC diktat.

That reveals the lack of legal and enforceable protection for foreign investments into the country. Thus economic relations require some sort of treaty between the three powers: Europe, America and China.

As otherwise the current situation is one where China produces some 70% of the bitcoins and other cryptos and sells them primarily to the western market, profiting from it to the tune of many billions a year, but we can’t go to China and sell them those same bitcoins or cryptos or blockchenize those IoT devices in a meaningful form, and the list goes on.

One hopes therefore this Huobi invitation is the beginning of a more appropriate understanding of China’s economic relations with the rest of the world.

Editorial Copyrights