If you could invent something to fulfill an economist’s dream, it would look an awful lot like a prediction market. A world where every uncertain future can be priced, hedged and insured against? Kenneth Arrow and Gérard Debreu would approve. A market mechanism to co-ordinate the decentralised wisdom of crowds, ensuring the accuracy of such prices? Adam Smith and Friedrich Hayek sought just that. More
Chinese Premier Li Qiang was speaking at the World Economic Forum’s annual conference in China.
Engaging in the international economy is a way of “reshaping the rules and order,” Li said.
Li also maintained an upbeat view on the Chinese economy during the conference.
Chinese Premier Li Qiang delivers a speech during the opening ceremony of the World Economic Forum Annual Meeting of the New Champions (AMNC25) in Tianjin on June 25, 2025.
Jade Gao | Afp | Getty Images
TIANJIN, China — Chinese Premier Li Qiang on Wednesday called on other countries to collaborate on trade, despite rising tariffs and other barriers.
“Globalization will not be reversed,” he said through an official English translation, as he called on all sides not to turn trade into a political or security issue.
Engaging in the international economy is a way of “reshaping the rules and order,” Li added, calling on countries to keep to the “right” path.
Li did not comment specifically on U.S. trade tensions or the Israel-Iran conflict. He was speaking at the opening plenary of the World Economic Forum’s annual conference in China, often dubbed “Summer Davos.”
Describing Li’s comment on “reshaping the rules and order” as “very interesting,” Adam Tooze, professor of history at Columbia University, said: “I think what we’re going to see is a pluralization.”
What’s needed is more about processes rather than focusing on who is setting the “order,” he told CNBC.
In the speech, Li referred to how more than 30 countries signed a “Convention on the Establishment of the International Organization for Mediation” in Hong Kong last month. He called it a way of using “the wisdom of the East in resolving international disputes.”
Li also maintained an upbeat view on the Chinese economy during the conference, and said authorities would implement measures to “make China a mega-sized consumption powerhouse” in addition to being one in manufacturing.
Louise Loo, lead economist for China at Oxford Economics, noted that Li was “quite confident in the organic growth momentum within China.”
“We still think that there are challenges [for China] this year, but I think it’s not as far-fetched as we thought before,” Loo told CNBC’s Emily Tan on The China Connection show.
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“However punitive tariffs are, I think in the near term, it’s quite hard to decouple China from global supply chains, and that means we will continue to see China exports, at least, remain quite competitive, and that should support economic growth for the Chinese,” she added.
Singapore’s Prime Minister Lawrence Wong, Vietnam’s Prime Minister Pham Minh Chinh and Ecuadorian President Daniel Noboa Azín were among the top political leaders attending this year, according to a forum press release.
JD.com Founder and Chairman Liu Qiangdong and TCL Founder and Chairman Li Dongsheng were among the listed conference attendees.
In the last week, Li has met with the leaders of Singapore, Vietnam, New Zealand, Ecuador and Kyrgyzstan, according to Chinese state media.
— CNBC’s Victoria Yeo contributed to this report. More
China is introducing ways to bolster yuan’s usage as confidence in the U.S. dollar falters.
Three major Chinese exchanges have allowed certain foreign institutional investors to trade more futures and options contracts listed in mainland China.
From expanding investment channels to building digital infrastructure, Beijing has been laying the groundwork to accelerate international use of its currency.
A bank employee count China’s renminbi (RMB) or yuan notes next to U.S. dollar notes at a Kasikornbank in Bangkok, Thailand, January 26, 2023.
Athit Perawongmetha | Reuters
China is devising more ways for foreign institutions to use the yuan, as international confidence in the U.S. dollar falters.
The moves aim at challenging the greenback, experts said, even as the U.S. dollar remains by far the world’s predominant currency. The timing is favorable as the U.S. dollar index has tumbled more than 9% this year — while the offshore yuan has strengthened more than 2% against the dollar.
In a sign of growing resolve in Beijing to lure the world away from the dollar, People’s Bank of China Governor Pan Gongsheng in a speech last week at the high-profile Lujiazui Forum discussed “how to weaken excessive reliance on a single sovereign currency.”
He also announced plans to set up a center for digital yuan internationalization in Shanghai and promote trading of yuan foreign exchange futures. Beijing has already rolled out a digital version of its currency to replace some cash and coins in circulation.
Much of Beijing’s recent moves focus on the futures market.
Three major Chinese exchanges announced that starting last week, qualified foreign institutional investors would be able to trade 16 more futures and options contracts listed in mainland China.
The commodities covered include natural rubber, lead and tin, according to releases on the Shanghai, Dalian and Zhengzhou exchanges.
That follows the addition of dozens of other tradable futures contracts for foreign institutional investors earlier this year, according to Zhou Ji, macro foreign exchange innovation analyst of Nanhua Futures, a Hangzhou-based brokerage focused on futures products and research.
Zhou pointed out that besides expanding the range of hedging products for international institutions, those contracts increase the influence of the yuan in the global commodity pricing system.
In another step toward encouraging global investors to use the yuan, the Shanghai Futures Exchange announced in late May it was gathering feedback for a proposal to allow foreign currencies to be used as collateral for trades settled in yuan.
Other recent moves, though incremental, include China allowing qualified foreign investors to participate in on-exchange exchange-traded fund options trading from Oct. 9 for hedging purposes. Earlier this year, authorities also reportedly announced a 500-yuan fee waiver for international financial institutions to open a local account for accessing the bond market.
Morgan Stanley in January announced its local subsidiary could officially begin offering brokerage services for mainland China commodity futures, and planned to expand to equity and fixed-income futures and options once it received necessary qualifications.
Such access has been years in the making, as the U.S. financial giant said it received China’s approval back in May 2023 to set up a wholly owned brokerage in the country.
While global finance institutions and investors have long been interested in diversifying to China, Beijing’s strict controls on capital outflows and relatively opaque system have discouraged large-scale buying of mainland China assets.
While some worry about the unpredictability of U.S. policies in recent months, China has yet to present itself as a dependable alternative, said Matt Gertken, chief geopolitical strategist at BCA Research.
“China’s rule of law is inferior to the U.S., it does not offer a large and deep pool of liquid assets that is open to foreign investors like the U.S.,” he said, adding that Beijing has not been sufficiently addressing the geopolitical risks tied to its markets.
Global payments
It’s not just investment products. Over the years, China has developed a sprawling network of offshore yuan clearing banks and promoted the cross-border interbank payment system.
Increasingly, Chinese banks lending to emerging market economies have switched to the yuan instead of the U.S. dollar, partly due to lower lending costs, according to analysis published last month by the U.S. Federal Reserve.
The world’s second-largest economy has also been promoting bilateral trade settlement in yuan, and in February announced $100 billion for businesses in Hong Kong to access yuan-denominated financing.
“China appears to be accelerating its de-dollarization efforts, though progress remains uneven,” said Dan Wang, director of Eurasia Group’s China team, though she noted an increase in yuan-denominated settlements of cross-border payments between energy and commodities companies in China and abroad.
Another trend supporting yuan’s internationalization is Chinese companies’ expansion overseas, especially smaller businesses selling goods online.
Startup FundPark said since its financial partners Goldman Sachs and HSBC hold offshore yuan, China-based customers can easily use it for both operations in China and overseas.
Chinese authorities also subsidize some of the interest costs for loans denominated in offshore yuan, said Bear Huo, FundPark’s China general manager. He said overall use of the currency remains low but growing, although he declined to share specific numbers.
At a global level, the Chinese yuan lost some ground in international use in May, according to Swift’s RMB Tracker. The data showed that the yuan accounted for 2.89% of global payments by value in May, the sixth most-active currency – down from 5th place in the prior month.
The U.S. dollar accounted for 48.46% of global payments, followed by the euro at 23.56%, according to Swift.
De-dollarization
Beijing’s latest efforts to promote the yuan coincide with a wider and more concerted shift away from the dollar in Asia recently. The region is gradually reducing its reliance on the U.S. dollar, driven by geopolitical tensions, shifting monetary dynamics, and increased use of currency hedging.
Policy uncertainty by U.S. President Donald Trump has fueled a notable selloff in the greenback, which saw its steepest losses of the year in April.
Overseas investors looking to diversify away from America and hedge against U.S. assets are also boosting the yuan, said Ning Sun, senior EM strategist at State Street Global.
“Our proprietary data indicates strong inflows to CNY, not a surprise given the good performance of CNY financial assets. Our data tracks only institutional investors, who are still very much underweight in CNY,” said Ning Sun, senior EM strategist at State Street Global. More
Federal Reserve Chair Jerome Powell on Tuesday said he expects policymakers to stay on hold until they have a better handle on the impact tariffs will have on prices.
The cautious tones could further antagonize President Donald Trump, who has ramped up his long-standing criticism of Powell.
Powell will present his speech, along with the Fed’s monetary policy report, first to the House Financial Services Committee on Tuesday morning, then the Senate Banking Committee a day later.
Chair of the US Federal Reserve Jerome Powell speaks during a press conference following the Federal Open Market Committee meeting in Washington, DC, on June 18, 2025.
Saul Loeb | Afp | Getty Images
Federal Reserve Chair Jerome Powell on Tuesday emphasized the central bank’s commitment to keeping inflation in check, saying he expects policymakers to stay on hold until they have a better handle on the impact tariffs will have on prices.
In remarks to be delivered to two congressional committees this week, Powell characterized economic growth as strong and the labor market to be around full employment.
However, he noted that inflation is still above the Fed’s 2% target, with the impact that President Donald Trump’s tariffs will have still unclear.
“Policy changes continue to evolve, and their effects on the economy remain uncertain,” Powell said. “The effects of tariffs will depend, among other things, on their ultimate level.”
Repeating what has become familiar language from the Fed chief, Powell said policymakers are “well positioned to wait to learn more about the likely course of the economy before considering any adjustments to our policy stance.”
The cautious tones could further antagonize Trump, who has ramped up his long-standing criticism of Powell. In his latest broadside, posted early Tuesday on the president’s Truth Social platform, Trump said he hopes “Congress really works this very dumb, hardheaded person, over.”
Powell will present his comments, along with the Fed’s monetary policy report, first to the House Financial Services Committee on Tuesday morning, then the Senate Banking Committee a day later.
Inflation seen drifting up
Most of the speech was boiler-plate language that Powell has used to describe the economy, which he said “remains solid,” a word he also used to characterize the labor market.
However, on inflation he said the Fed’s preferred measure is likely to move up to 2.3% in May, with the core measure excluding food and energy to edge up to 2.6%. The respective readings for April were 2.1% and 2.5%.
Tariffs historically have resulted in one-time price increases and only occasionally have been responsible for longer-term inflation pressures. Powell said he and his Federal Open Market Committee colleagues will be weighing that balance and feel in no hurry to adjust policy until they have more data to view on how tariffs are working this time around. The FOMC is the central bank’s rate-setting arm.
“The FOMC’s obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said. He added that the Fed will seek to balance its dual goals of full employment and low inflation “keeping in mind that, without price stability, we cannot achieve the long periods of strong labor market conditions that benefit all Americans.”
The FOMC voted unanimously last week to hold rates steady.
However, an update to individual members’ future expectations — the “dot plot” grid — showed a split among members. Nine of the 19 officials favored either zero or one cut this year, while eight saw two cuts and two others expected three. The plot is done anonymously, so there is no way of knowing the outlook of individual members.
Over the past several days, however, two key FOMC voters, governors Michelle Bowman and Christopher Waller, said they would favor a reduction in July so long as the inflation data remains in check. The consumer price index rose just 0.1% in May, echoing other indicators showing muted prices pressures so far from tariffs.
Futures market pricing indicates only a 23% probability of a cut at the July 29-30 meeting, with a much higher probability of the next cut coming in September, according to the CME Group’s FedWatch gauge. More
Crypto firm Digital Asset raised $135 million in a funding round backed by Goldman Sachs, BNP Paribas and Ken Griffin’s Citadel Securities.
The company said it will use the funding to advance adoption of the Canton Network, a blockchain for financial institutions.
The investment highlights how large financial institutions are embedding themselves in the once murky world of cryptocurrencies.
Nurphoto | Getty Images
Crypto company Digital Asset said Tuesday that it’s netted $135 million in funding from a raft of major names in banking and finance.
The firm, which touts itself as a regulated crypto player, said it raised the fresh cash in a funding round co-led by DRW and Tradeweb, with Goldman Sachs, BNP Paribas and Ken Griffin’s Citadel Securities also investing.
The investment highlights how large financial institutions are embedding themselves in the once murky world of cryptocurrencies.
Previously associated with fraud, money laundering and other illicit activities, digital assets have become a more mainstream asset class over the years as big names like JPMorgan Chase, Goldman Sachs and Morgan Stanley warmed to the space.
Just last week, JPMorgan launched its own version of a stablecoin, a deposit token called “JPMD.”
“With growing participation from global financial institutions and market participants, we expect this funding round to help us solidify our role as the backbone of digital finance,” Yuval Rooz, Digital Asset’s CEO and co-founder, told CNBC.
Digital Asset sells a number of digital asset services to its clients, which include major Wall Street players like Goldman Sachs, Citadel and Virtu. Co-founded in 2014 by Rooz, a trader turned entrepreneur, the firm competes with the likes of Ripple, R3 and Consensys.
The firm will use the new funding to advance adoption of the Canton Network. Initially developed by Digital Asset but now open-source, Canton is a public blockchain designed for financial institutions to move assets and data around while meeting regulatory and privacy requirements.
Banks and trading firms are using Canton to tokenize real-world assets such as bonds, commodities and money market funds.
“This raise will allow us to build upon the continuing momentum around the Canton Network and accelerate the onboarding of more high-quality assets, finally making blockchain’s transformative promise an institutional-scale reality,” Rooz told CNBC.
The network now supports trillions of dollars in tokenized assets, according to Digital Asset’s CEO. More
President Donald Trump proposed a tax break on car loan interest while on the campaign trail last year.
House and Senate Republicans have pitched a $10,000 tax deduction on auto loan interest as part of the so-called “one big beautiful bill” being debated in Washington.
Households would likely need to buy luxury cars that cost $130,000 or more to get the maximum benefit, one economist said.
Models with such price tags include “exotic” brands like Rolls-Royce, Ferrari, Bentley, Aston Martin, Lamborghini, McLaren, Porsche, Land Rover, Cadillac, Maserati, Lotus or Mercedes-Benz, the economist said.
A Rolls-Royce Spectre all electric luxury coupe is displayed at Rolls-Royce Motor Cars dealership showroom in London.
John Keeble | Getty Images News | Getty Images
Republicans are trying to make good on President Donald Trump’s campaign promise to give Americans a tax break on their car loan interest. However, as structured, most households wouldn’t get a substantial financial benefit, economists said.
House and Senate Republicans proposed giving drivers a tax deduction of up to $10,000 on annual interest for new auto loans in their so-called “One Big Beautiful Bill Act.” The tax break would be temporary, ending after 2028.
But few drivers pay that much annual interest, said Jonathan Smoke, chief economist at Cox Automotive, an auto market research firm.
It’s “pretty rare,” he said.
Auto loans don’t have annual interest charges of $10,000 or more outside of large loans on “exotic” vehicles, Smoke said.
A ‘laundry list of exotic names’
How large would the loan have to be?
It would take a loan of roughly $112,000 to use up the full $10,000 deduction in the first year of car ownership, Smoke said.
Only about 1% of new auto loans are this big, according to Cox Automotive data.
Cars most likely to see loans of that magnitude include a “laundry list of exotic names” like Rolls-Royce, Ferrari, Bentley, Aston Martin, Lamborghini, McLaren, Porsche, Land Rover, Cadillac, Maserati, Lotus and Mercedes-Benz, Smoke said.
Smoke’s analysis assumes drivers use the most popular loan length, 72 months at the current new loan average of around 9.5%. It includes a 10% down payment and various fees like taxes and registration.
The example implies a vehicle purchase price of about $130,000, he said.
Vehicles with an average purchase price near this level include a Porsche Panamera or Cadillac Escalade, he said. Monthly car payments under those loan terms would likely be more than $2,000, Smoke said.
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House Republicans included the tax break on auto loan interest in a massive domestic policy bill, the “One Big Beautiful Bill Act,” which lawmakers narrowly passed along party lines in May. The Senate may vote on a similar measure as soon as this week.
In practice, few if any households would likely claim the full benefit due to an income limitation, experts said.
Both versions of the legislation reduce the value of the car loan interest tax deduction once an individual’s annual income exceeds $100,000, or $200,000 for married couples filing a joint tax return. Households below those thresholds may qualify for the full tax benefit, but are unlikely to buy an expensive enough car to do so, economists said.
Those drivers who might qualify to take on a six-figure car loan are unlikely to maximize the tax break, either. Taxpayers don’t get a financial benefit once income exceeds $150,000 (or $250,000 for married couples), according to the Institute on Taxation and Economic Policy, a left-leaning think tank.
Qualifying cars must also receive final assembly in the U.S., according to current legislative text, potentially further limiting the potential roster of vehicles.
The average car loan and interest charges
People walk by a Ferrari dealership in New York City.
Spencer Platt | Getty Images News | Getty Images
The average car loan so far in 2025 is about $43,000, according to Cox Automotive data.
Under Republicans’ tax plan, the average buyer would get a tax deduction of about $3,000 in the first year of a six-year loan (and a roughly $2,000 average annual deduction over the loan’s life), Smoke said.
However, based on the way tax deductions work, this wouldn’t mean car buyers get $3,000 in their pocket the first year.
That $3,000 would be deducted from the buyer’s taxable income.
“The math basically says you’re talking about [financial] benefit of $500 or less in year one,” and a declining value in subsequent years, Smoke said. That’s less than the average monthly payment on a new loan, he said. More
