Hackers strike again; China funds to flow

<p>Kia ora,</p><p>Welcome to Monday's Economy Watch where we follow the economic events and trends that affect New Zealand.</p><p>I'm David Chaston and this is the International edition from Interest.co.nz.</p><p>Today we lead with news the Russians and Chinese are coming.</p><p>But first, it is a public holiday in the US, Independence Day, with everything there essentially closed until Wednesday (NZT).</p><p>China is also essentially 'closed' as they take time out to <a href="http://www.ce.cn/xwzx/gnsz/gdxw/202107/04/t20210704_36688242.shtml" target="_blank"><strong>celebrate</strong></a> the anniversary of the CCP, and fawning over Chairman Xi.</p><p>Taking advantage of the holidays have been <a href="https://en.wikipedia.org/wiki/REvil" target="_blank"><strong>a ransomware group</strong></a>, who launched <a href="https://www.wsj.com/articles/ransomware-group-behind-meat-supply-attack-threatens-hundreds-of-new-targets-11625285071?mod=hp_lead_pos5" target="_blank"><strong>a massive strike</strong></a> over the weekend, affecting thousands of organisations worldwide, <a href="https://www.cert.govt.nz/it-specialists/advisories/kaseya-management-software-being-used-to-deploy-ransomware/" target="_blank"><strong>including in New Zealand</strong></a>. <a href="https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/07/03/remarks-by-president-biden-after-visiting-king-orchards/" target="_blank"><strong>No-one actually knows</strong></a> where this threat originates from, but they are thought to be based in Russia because the group does not target Russian organisations, nor those in former Soviet-bloc countries. Nor China.</p><p>We can use this break to note that our investment portfolios are likely to have a growing portion of Chinese debt investments in them as China gets more comfortable about its financial market opening-up. Benchmark Chinese debt still has relatively high yields (their Govt 10 yr yields 3.11% today), giving it an attraction to many fund managers, with the added prospect of large capital ga