The last couple of years have seen Fintech companies soar – especially those that are challenging traditional banks in areas of weakness. One such company is Remitsy – who utilise blockchain technology to make paying Chinese suppliers cheaper for businesses.

Remitsy was founded in April 2015 by Richard Bensberg, a businessman tired of making international payments which were both costly and time-consuming. Remitsy has identified a key area where banks just aren’t coming up to scratch; charging between 3 – 8 percent for transfers and taking up to five working days, banks are using old technology and run an expensive service. By matching sellers and buyers of bitcoin and facilitating a ‘swap’, Remitsy can save around businesses around 80 percent, and complete each payment within as little as 6 hours.

China has been growing steadily over the last couple of years, helped by market manipulation and a large economic stimulus programme. However, the ‘Great Fall of China’ last year hinted at cracks in the country’s economic foundations, which appear to have enlarged over the last two weeks. But is this a temporary hiccup – or is China on its way to collapse? All eyes were on China last summer, with economists eager to ascertain whether the 30 percent fall in the Chinese markets, dubbed ‘Black Monday’, was a one-off – or whether it signalled worse things to come. After huge market intervention from Beijing, which included an interest rate cut and a 250 billion RMB loan to prop up state banks, Chinese markets seemed to stabilise for the rest of the year. However, last week global economies shook again as trading was suspended twice, wiping away all market gains made last year. Whilst the ruling Chinese Communist Party continues to assure the world that China’s economy is not in the midst of a meltdown, the reality is that economic data from the region looks undeniably shaky. On Monday, the private Caixin/Markit Purchasing Managers’ Index showed China’s manufacturing sector had declined for the tenth month in a row, in sharp contrast with the official figures released by the Chinese government; causing a 300 point drop in the Dow Jones Industrial Index and impacting on economies across Europe and Asia. On Thursday, another devaluation of renminbi caused trading suspension on the Chinese markets and a 400-point tumble at the close of trading in New York. China have continuously devalued their currency since the beginning of last year, but it doesn’t appear to have the desired effect – largely because there is a lack of demand for money. Furthermore, China’s growth is looking rocky. Whilst the official National Bureau of Statistics reported that growth in the third calendar quarter of last year was 6.9 percent, Citigroup’s chief economist has said that China is probably looking at growth of around 4 percent. Combined with this, China’s overall debt is climbing rapidly. Household sector debt is a modest 38 percent – but when combined with its rocketing private non-financial business sector debt, at 163 percent, it reaches a total of just over 200 percent. Despite appearances, the government in Beijing are panicking. Chinese Communist Party (CCP) is panicking. They are faced with slowing growth, a market hindered by short-sighted government intervention and an aging work-force – something that has been tackled with the abolition of its decades-old one child policy. But China won’t see the effect of this change for a few generations – and unless the government’s short term measures start to kick in soon, it may be impossible to prevent the spiralling decline of the world’s second biggest economy.

Miranda Wadham on 11/01/2016

Born in 1948, Zhou Xiaochuan has come a long way from the rebellious teenager on a state farm during China’s Cultural Revolution; he is now the country’s longest serving, and arguably most radical, governor of the Chinese central bank. It may be a new year, but all eyes are still on China – another shock devalution of the yuan earlier this week caused turmoil on markets globally. And Zhou Xiaochuan is the man behind the news – quietly recommending free-market economic policy to the State Councils that control Communist China. The son of a an early Communist leader persecuted by the government then in power, Zhou was sent to a state farm for difficult teenagers in 1968, where he defied the powers that be by listening to banned classical music. His luck changed when President Jiang Zemin, a former protégé of his father, came to power in 1989 – and his career began to take off. Xiaochuan landed a string of jobs in the upper echelons of China’s finance sector, from the president of China Construction Bank to the head of of the China Securities Regulatory Commission. His career has several impressive milestones; over-hauling the state-owned banks to encourage a more competitive market and persuading Beijing to devalue the yuan, paving the way for a free-floating currency that can challenge the US dollar, to name just a few. Since 2002, Zhou has has served as the governor of the People’s Bank of China, but success rarely comes easily; over the years, he has been heavily criticised for ‘selling out to foreigners’, in the case of the modification of the state banks, and for disagreeing with the huge economic stimulus plan ordered in 2008 by Premier Wen Jiabao. Rumours have been abound that his time as head of the Bank may soon be over; however, he has so far outlived three administrations and his reign looks set to continue for a while longer. Throughout his time as head of the central bank, Zhou has consistently pushed for a freer, globalized currency and is almost solely responsible for the rising international use of the yuan since 2005. Amongst friends and peers, he is well known for his excellent English, love of tennis and ability to mix easily with global economic figures. Over the last couple of months, however, China has been on something of a downward spiral – arguably, it is now that Zhou’s skills as an economic leader will be truly put to the test.

Miranda Wadham on 08/01/2016