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All signs point to more money pouring into Chinese markets this year

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A record amount of money poured into China’s financial markets in 2018 — and analysts say that figure will likely increase as closely followed indexes raise their weightings for Chinese assets.

China’s bond and stock markets experienced inflows of $120 billion last year and that amount could reach $200 billion this year, boosted by the inclusion of Chinese assets in benchmark indexes, according to a report by Citi.

“Inflows from bonds and equities are likely to continue supporting China’s (balance of payments),” the U.S. bank said in its Jan. 31 report.

While financial markets in China remain highly regulated compared to those of advanced economies, the door has been gradually opening and investors are keen to get in as opportunities increase.

Chinese A-shares — or yuan-denominated stocks traded on the mainland — were included in the MSCI Emerging Markets Index for the first time last year, allowing investors to access the Chinese equity market more easily. Now, MSCI is considering whether to further increase the weighting of A-shares in its indexes, and could announce its decision by the end of this month.

Meanwhile, financial information firm Bloomberg announced in January that yuan-denominated Chinese government and policy bank securities will soon be included in its bond benchmark — the Bloomberg Barclays Global Aggregate Index.

Impact of trade talks

While Chinese authorities have kept a lid on what they consider potentially destabilizing capital outflows, they largely welcome inflows, which have increased following various arrangements that allow foreign investors to buy domestic stocks and bonds through Hong Kong.

The possibility of reduced trade tensions between the United Statesand China could also improve investor sentiment as uncertainties surrounding Chinese investments ease, Ronald Wan, non-executive chairman at Partners Financial Holdings in Hong Kong, told CNBC on Thursday.

People will recognize that the trade war will be an “ongoing problem,” Wan said, but he added that he did not expect anything “drastic” to happen.

All that could be good news for a country growing more reliant on foreign money as its economy slows.

‘Aggressive’ inflows

Many index funds, mutual funds and exchange-traded funds (ETFs) are directly benchmarked against MSCI indexes such as the Emerging Markets ETF and the iShares MSCI All World ETF.

Many fund managers and investors may have to buy shares that are included in major indexes that include A-shares as their funds and portfolios often track the benchmark, Wan said.

“My expectation is that the capital inflow into (the) Chinese market will be increasing,” he said.

The potential for increased A-share weighting has “sparked aggressive equity inflow” into Chinese markets through Hong Kong ahead of MSCI’s decision later this month, Ken Cheung, senior Asian foreign exchange strategist at Japanese bank Mizuho in Hong Kong, said in a Wednesday note.

The inclusion of Chinese bonds in the Bloomberg Barclays Global Aggregate Index is also significant, said Ken Peng, head of Asia Investment Strategy at Citi Private Bank in Hong Kong.

Chinese bonds will now make up 6 percent of that index, from 0 percent before.

“That is massive,” Peng told CNBC on Thursday. “It’s going to go from zero to the No. 4 bond market in the index.”

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Social Justice

Consumer Group Wins First Round in Lawsuit Against Ben & Jerry’s

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A federal judge has ruled against Ben & Jerry’s and allowed a lawsuit alleging that the company doesn’t live up to its environmentally friendly messaging to move forward.

The Organic Consumers Association (OCA) filed suit in Washington in July arguing that the Vermont-based ice cream maker misled consumers to think its product is more environmental friendly than it really is, in violation of consumer protection laws. On Monday, Judge Neal Kravitz foiled Ben & Jerry’s efforts to get the case dismissed.

The OCA argued that while Ben & Jerry’s frames itself as an environmental leader, in reality, the company’s products include ingredients sourced from inhumane dairy farms and include traces of glyphosate, a herbicide.

Ben & Jerry’s, which is owned by Unilever, had argued that no reasonable customer would conclude that the company’s advertising about “happy cows” meant that none of the cows lived on ordinary farms.

Kravitz found that the allegations raised by the association were “sufficient to advance a plausible claim that consumers would be misled by Ben & Jerry’s labeling and marketing regarding the sourcing of its ingredients.”

“A reasonable consumer could plausibly interpret Ben & Jerry’s labeling and marketing as affirmatively (and inaccurately) communicating that the company’s ice cream products are sourced exclusively from Caring Dairies and/or other humane source,” he wrote.

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Social Justice

‘Everyday People Like It When We Fight for Everyday People’

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“I inherently reject the paternalistic idea that some subjects are too complex for everyday people to engage. If we present compelling, solid info plus commonsense arguments, we can win,” the New York congresswoman wrote on Twitter

“I inherently reject the paternalistic idea that some subjects are too complex for everyday people to engage. If we present compelling, solid info plus commonsense arguments, we can win,” the New York congresswoman wrote on Twitter

Bolstering Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) recent remark that “everyday people like it when we fight for everyday people,” a new analysis of social media data published on Sunday found that the freshman congresswoman received more Twitter engagement over the past month than any other Democrat in Congress—and it wasn’t even close.

According to numbers from CrowdTangle compiled by Axios, Ocasio-Cortez, who was sworn in less than two weeks ago, had 11.8 million total interactions on Twitter—retweets plus likes—between Dec. 11 and Jan. 11. The congressional Democrat with the second most Twitter interactions was Sen. Kamala Harris (D-Calif.), with 4.6 million.

“I inherently reject the paternalistic idea that some subjects are too complex for everyday people to engage,” Ocasio-Cortez tweeted on Monday, explaining her messaging approach that has, in just a few months, driven previously obscure or marginalized solutions like the Green New Deal and a 70 percent top marginal tax rate into mainstream political discourse.

“When I meet everyday people, they are eager to learn more, ask great questions, and embrace nuance,” Ocasio-Cortez wrote. “If we present compelling, solid info plus commonsense arguments, we can win.”

Based on CrowdTangle’s figures, below is a Twitter engagement ranking among the congressional Democrats included in the new analysis, as well as Sen. Bernie Sanders (I-Vt.), former President Barack Obama, and former Rep. Beto O’Rourke (D-Texas). For Harris, Sanders, and Warren, the figure is the combined number of interactions on their personal and official accounts.

  • Rep. Alexandria Ocasio-Cortez (D-N.Y.): 11.8 million
  • Sen. Kamala Harris (D-Calif.): 4.6 million
  • House Speaker Nancy Pelosi (D-Calif.): 2.6 million
  • Sen. Bernie Sanders (I-Vt.): 2.6 million
  • Senate Minority Leader Chuck Schumer (D-N.Y.): 2.4 million
  • Beto O’Rourke: 1.8 million
  • Sen. Elizabeth Warren (D-Mass.): 1.4 million 

In addition to far surpassing her Democratic colleagues in Twitter engagement, Ocasio-Cortez is also receiving dramatically more social media interaction than America’s largest corporate media outlets.

As Neal Rothschild of Axios put it, “Alexandria Ocasio-Cortez is absolutely dominating the national conversation on Twitter, generating more interactions than the five biggest news organizations combined over the last 30 days.”

Bolstering Rep. Alexandria Ocasio-Cortez’s (D-N.Y.) recent remark that “everyday people like it when we fight for everyday people,” a new analysis of social media data published on Sunday found that the freshman congresswoman received more Twitter engagement over the past month than any other Democrat in Congress—and it wasn’t even close.

According to numbers from CrowdTangle compiled by Axios, Ocasio-Cortez, who was sworn in less than two weeks ago, had 11.8 million total interactions on Twitter—retweets plus likes—between Dec. 11 and Jan. 11. The congressional Democrat with the second most Twitter interactions was Sen. Kamala Harris (D-Calif.), with 4.6 million.

“I inherently reject the paternalistic idea that some subjects are too complex for everyday people to engage,” Ocasio-Cortez tweeted on Monday, explaining her messaging approach that has, in just a few months, driven previously obscure or marginalized solutions like the Green New Deal and a 70 percent top marginal tax rate into mainstream political discourse.

“When I meet everyday people, they are eager to learn more, ask great questions, and embrace nuance,” Ocasio-Cortez wrote. “If we present compelling, solid info plus commonsense arguments, we can win.

Since Ocasio-Cortez burst onto the political scene last year with her astonishing primary upset of powerful Wall Street-friendly Rep. Joe Crowley (D-N.Y.) last June, much analysis has been devoted to discovering why she has garnered such widespread appeal in such a short period of time.

While corporate Democrats have expressed confusion—and, in some cases, alarm—about the freshman congresswoman’s popularity, Nathan Robinson of Current Affairs argued on Monday that Ocasio-Cortez’s appeal lies in her straightforward and unabashed presentation of bold solutions that the public craves.

“She bluntly sticks up for progressive values, rather than timidly using conservative premises. She’s not always perfectly polished, but I feel as if she’s on my side and won’t back down, which is something millennial leftists really need right now,” Robinson wrote.

Lamenting the frequency with which politicians campaign on bold promises only to quickly backpedal once they take office, Robinson noted that Ocasio-Cortez “has been an inspiring exception to this. She made it clear that her loyalties weren’t with the Democratic leadership but with the protesters occupying the offices of the Democratic leadership.”

“My desperate, pleading hope is that instead of succumbing to the inevitable pressure from Congressional peers—moderate your rhetoric, ‘get serious,’ don’t criticize the party—she doubles down and keeps kicking ass,” Robinson concluded. “She’s already showing how we can successfully change the conversation: The Green New Deal, like Medicare for All, has gone from marginal to mainstream within a matter of months.”


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Social Justice

We Can’t Tackle the Migrant Crisis Without Fighting Climate Change

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Many Americans have rightfully been outraged at the inhumane conditions of migrant families detained at the border. Refugees have been packed tight into cages that don’t leave them room to lie down, denied basic amenities like showers and toothbrushes, and separated from their children.

Meanwhile, there was a record heatwave that gripped most of the United States. At face value, these issues may seem entirely unrelated. The reality is the crisis at the border is deeply connected to the climate crisis.

What the world’s scientists warned us about 30 years ago is emerging before our eyes. In Central America, prolonged and escalating droughts have choked the water supply and turned crops to dust. Famine, thirst, poverty and crime is creating a generation of climate refugees who uproot from their homes and loved ones. These refugees come to the United States, seeking refuge, stability and dignity.

Instead, they face guns, dogs and jails at our border. Make no mistake, this is what American climate policy looks like in the age of President Trump.

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