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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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NEWS

Pope Francis, Who Chided Trump’s Border Wall, Gives $500,000 To Migrants In Mexico

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Pope Francis, who has rebuked President Donald Trump for his hardline immigration stance, revealed this weekend that he’s donated $500,000 in aid to migrants in Mexico who have sought a “better future in the United States” but have found the U.S. border “closed to them.”

The Vatican said on Saturday that the Catholic leader’s donation — taken from the coffers of Peter’s Pence, the pope’s charitable fund — would be distributed to 27 projects across Mexico and would be used to provide housing, food and other necessities to Central American migrants fleeing poverty and violence.

Many of these migrants, often accompanied by young children, have traveled thousands of miles “on foot and with makeshift vehicles from Honduras, El Salvador and Guatemala,” the Vatican said in a press release.

“In 2018, six migrant caravans entered Mexico, for a total of 75,000 people … All these people were stranded, unable to enter the United States, without a home or livelihood,” the release said.

Media coverage of the migrant crisis has been on the decline, the Vatican said, resulting in a concomitant decrease in aid for those who left their strife-torn countries for the U.S. but have been stranded in Mexico. This decline prompted the pope to act. 

Francis’ donation comes less than a month after he criticized Trump and other “builders of walls” who want to keep migrants out of their countries.

“Builders of walls, be they made of razor wire or bricks, will end up becoming prisoners of the walls they build,” the pope told reporters on March 31 when asked to comment on a threat Trump had issued about closing the U.S.-Mexico border. 

“I realize that with this problem of migration, a government has a hot potato in its hands, but it must be resolved differently, humanely, not with razor wire,” Francis said. 

In 2016, the pope suggested that Trump’s desire to keep migrants out of America was un-Christian.

“A person who thinks only about building walls, wherever they may be, and not building bridges, is not Christian,” he said, referring to Trump’s planned immigration policies.

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Health

When I was fat, socialising was a struggle – but it was going out that helped me lose weight

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used to be fat. (You still are, say the wags.) But I mean really fat. Shopping-at-specialist-internet-clothes-stores fat. Heckled-in-the-street fat. It wasn’t fun, but it took years before I had the willpower, the courage or some combination of the two to do anything about it.

By the time I was 24, in 2008, the feeling that I had to lose weight had been growing for some time. It is impossible to identify one event that prompted me to take action. Was it preparing to change jobs for the first time? Was it the last photo taken of me and my grandpa, which I couldn’t bear to look at? It was everything and nothing. All I knew was that my life didn’t feel worth living if I didn’t make a change.

Of course, not all fat people are unhappy or want to change, and the science around weight is very much contested. But, for me, it suddenly felt very urgent.

What I did wasn’t complicated or revolutionary. It involved years of helpful amateur “advice”, diet shows on TV and useful tips from gym-bunny friends. The idea was to eat less and exercise more – with a clear emphasis on the former.

I was incredibly disciplined about what I ate, buying healthy options and cooking in advance, and I went to the gym at least twice a week. It is not easy walking into a mirror-strewn room full of pumped-up people when you weigh more than 160kg (25 stone). But it was liberating to realise that those six-packed Adonises were far more interested in their own reflections than me huffing and puffing behind them. No matter how close you get to “the ideal body”, insecurity lurks.
l of this will be familiar to anyone who has thought about losing weight. But that is not the change that mattered the most. It was my willingness to embrace a social life that had hitherto felt onerous, but which empowered me. I knew that being home alone was when my worst habits became irresistible. So, I decided to make sure it happened as rarely as possible. I booked out every night when I wasn’t going to the gym with some social event or other. Being around people was meant to provide an insurance policy against my failure of willpower. But it was helpful in other ways that I had never imagined.

It wasn’t easy, though. All my adult life, leaving the house had been fraught with anxiety. If you have never been fat, the idea that people in passing cars might shout at you in the street simply for being chubby may seem unlikely. It isn’t. It happened to me a lot. And the excruciating embarrassment when it occurred in front of a friend was hard to bear. The forced: “Did you hear that?”, “What did he say?” brought the elephant in the room crashing into view.

Then there was the worry about where we would go. Would I fit into the seat? Would it involve a tiring walk? What if a stranger decided to take the piss? I was by no means a hermit, but I would often stay in when I couldn’t face the outside world.

But rather than terrorising me, going out became part of the solution. Nobody knew. The thought of sharing what I was doing was too scary. That soon became impossible. As the pounds fell off, people started to notice. But that was suddenly OK, because my confidence had increased, the comments occurred less often, and walking became a pleasure – it was exercise.

Relying on a social life to get through forced me to lean on friends in a way that I never had. Talking about myself gradually became easier. I was able to let people in, I was less spiky and my relationships improved. It wasn’t easy, but I don’t remember the difficulties of disciplined eating and social anxiety so much: it is the happy memories I made that have stuck.

Eighteen months later, half the weight I was before, it wasn’t just physical weight that had been lifted from my shoulders. Going out for the night was no longer scary. I didn’t need to plan any excursion to the nth degree to feel OK. Not all my worries disappeared, but a big chunk of them did – and it was a blessed relief.

“Adopt a strict diet and exercise more” is the usual advice for anyone who wants to lose weight. That can feel impossible – it did to me for a long time. But sometimes it is changing the smaller things that can help you get where you want to go. Positive change need not involve sacrifice or pain – sometimes it just means a trip to the pub with some mates.

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Environment

Fracking tsar quits after six months and blames eco activists

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The government’s fracking tsar has quit the post after just six months, claiming policy relating to the controversial process means there is “no purpose” to her job.

Natascha Engel told the business secretary, Greg Clark, that developing the industry would be “an impossible task” despite its “enormous potential”. In her resignation letter, she said environmental activists had been “highly successful” in encouraging the government to curb fracking.

Engel, a former Labour MP, wrote the letter following two weeks of protests by the Extinction Rebellion group, which brought parts of London to a standstill with demands to cut emissions to zero by 2025.

She wrote: “A perfectly viable and exciting new industry that could help meet our carbon reduction targets, make us energy secure and provide jobs in parts of the country that really need them is in danger of withering on the vine – not for any technical or safety reasons, but because of a political decision.”

Engel complained that a traffic light system that halts fracking when a tremor with a magnitude of 0.5 is recorded “amounts to a de facto ban”.

“The UK could be on the cusp of an energy revolution the like of which we have not seen since the discovery of North Sea oil and gas,” she wrote.

Protesters stand outside Cuadrilla’s Preston Road fracking site near Blackpool.

Protesters stand outside Cuadrilla’s Preston Road fracking site near Blackpool. Photograph: Hannah Mckay/Reuters

, she said, had the potential to create jobs, economic security and provide a cleaner alternative to coal and biomass.

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Critics say the amount of water needed for fracking is damaging to the environment and claim it releases dangerous chemicals. They also say governments should focus on renewable energy.

Engel’s resignation letter said: “The UK is currently spending £7bn a year on importing gas – money that is not being used to build schools, hospitals or fix the potholes in our roads. Developing our own shale gas industry would mean money going into the Treasury rather than out.”

She added: “We know shale gas can be extracted safely. We have the best regulations and regulators in the world. We know the positive impact it has on local communities, but we are choosing to listen to a powerful environmental lobby campaigning against fracking rather than allowing science and evidence to guide our policy making.”

She said “apart from its uniquely awful name” the process is “materially no different” from other methods of hydrocarbon extraction.

“We are listening to a small but loud environmental movement that opposes in principle all extraction of fossil fuels,” Engel wrote. “The campaign against fracking has been highly successful in raising the profile and filling the coffers of some NGOs, but they do not represent local residents nor the wider population.”

In a statement following her resignation, Engel said: “I hope there will be a rethink sooner rather than later which will see policy guided by science, rather than fear-mongering.

“There is much to be optimistic about how developing technologies – including fracking – can help us accelerate the reduction in CO2 and grow our economy. Sadly today only those who shout get heard.”

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