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Bitcoin Featured on China’s “Most Influential” TV Show

Last Updated March 4, 2021 4:53 PM
Andrew Quentson
Last Updated March 4, 2021 4:53 PM

Bitcoin’s awareness continues to increase in China as the new digital currency becomes prime subject of debate in China’s “most cutting-edge and most influential financial talk show,” a highly popular national TV segment with millions of viewers who are mostly in the high-income and highly educated demograhic.

The topic of debate is “Bitcoin, fortune maker or Ponzi scheme?” featuring professor Larry Hsien Ping Lang, described as China’s most influential economist. A controversial figure in the country who considers bitcoin worthless.

In 2014, after the price of the digital currency reached new highs with Baidu, China’s google, having previously announced they are willing to accept bitcoin payments, Lang famously refused 100 bitcoins offered by Bobby Lee, CEO of BTC China, now worth some $90,000, while discussing  bitcoin on his show.

Larry Lang, China’s Most Famous Economist, Refuses 100 Bitcoins – Image Courtesy of cnLedger

“Time for his FUD again. More about Bitcoin on TV from Larry “FUD” Lang, the one who denies that Bitcoin is valuable!” Lee said publicly today.

However, another Chinese economist, who is to take part in the show, publicly stated that “Bitcoin is the real currency, and it marks the future of currency,” according to a translation . The usual arguments of pros and cons, as in the west, are therefore to be expected, but the segment comes after both a tremendous price rise in bitcoin as well as intervention by PBOC.

China’s Most Influencial Financial TV Talk Show to Feature Bitcoin – Image from Weibo

Following the devaluation of Yuan around June last year, bitcoin’s price more than quadrupled with Chinese exchanges, at one point, having a record higher price, in comparison to western exchanges, of around $200. Price then crashed in minutes by more than $300 with some traders locked out of their exchanges, leading to alleged losses.

Chinese media has stated that PBOC noticed the freeze of some Chinese exchanges during the fast price movements, locking out traders, thus decided to intervene, opening an investigation. That, however, might be just an excuse as the Chinese government is not very fond of bitcoin as far as we can judge by their actions.

Their intervention coincided with the bitcoin price surpassing gold parity in Chinese exchanges and mimics their actions in late 2013 when they banned acceptance of bitcoin payments, forcing Baidu to stop providing the service. Recently, they have prevented exchanges from offering margins, have intervened with the operations of private companies by ordering them to enact trading fees, and seemingly appear to require a lower price for bitcoin.

Is PBOC Asking for a Lower Bitcoin Price?

Lee has publicly suggested  that Chinese exchanges should start trading in mBTC to “[s]how lower prices [and] appease regulators.” Furthermore, there are suggestions that OKCoin.cn, the Chinese version of the exchange, no longer allows non-Chinese citizens  to trade on their platform. A clearly protectionist action if it came from PBOC’s orders.

PBOC has made no public statements to explain, nor have they engaged in any public consultation before interfering in the business operations of private companies. Although licensing, regulations, requirements are reasonable, if the exchanges can be profitable while offering zero fee trading then under what basis does PBOC demand fees?

That is not to say they may not have reasons or that they are profitable while offering zero-fee trading as we cannot confirm either, but these secretive unilateral actions taken without any consultation nor any explanation only act to remind us that China remains an unfree country ruled by authorities that may arbitrarily order whatever they please without any public accountability whatever. A country whose authorities remain hostile to foreign companies and is apparently now trying what they can to lower bitcoin’s price, fully interfering with the global free market.

The TV show, while welcomed publicity, might only act as a further attack on bitcoin by China’s “most famous economist,” with its timing both in 2014 and now coinciding with draconian intervention by PBOC, whose actions clearly show to us all that instead of a free market economy China continues to have a tightly controlled market with authorities that arbitrarily intervene in the business affairs of private companies to the point where they order them how to run their business.

Trump Negotiations

The new Trump administration, today having its first business day, has not yet publicly opened any moves towards China with whom they wish to re-negotiate a new trading relationship. Although there have been previous geopolitical moves suggesting the potential stakes, more concrete moves that refer to trade are now to be expected.

China has taken tight control over its media regarding their coverage of Trump, softening their tone and asking for talks. One expected request by the Trump administration that affects our space is to ask China to allow free and fair competition by foreign businesses and not arbitrarily intervene in global free markets. That is, to open their market, play by fair rules, and stop behaving in a protectionist manner. If they refuse, then the USA will probably respond by leveling the playing field through likewise refusing open access to Chinese companies with tariffs of as high as 45% suggested which would send the Chinese economy down tanking.

As there has already been debate within China for more market reforms and for allowing freer competition together with suggestions that the ghost towns and ghost factories are a product of China’s failure to publicly consult and discuss their actions, thus gain input and information on what is most needed and is best for the economy, the Chinese authorities may be sympathetic to some of USA’s requests, but whether that will indeed be the case, we can only wait and see.

Hat tip to cnLedger .

Featured image from Shutterstock.