Home Business Renminbi depreciation and foreign capital flight intensified

Renminbi depreciation and foreign capital flight intensified

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Renminbi depreciation and foreign capital flight intensified

[The Epoch Times, November 1, 2022](The Epoch Times reporters Xia Dunhou and Lin Cenxin interviewed and reported) Under the pressure of RMB depreciation, the international appeal of RMB-denominated assets has been weakened, and foreign investors have sold Chinese bonds for eight consecutive months , marking the longest streak in history. Experts believe that the 20th National Congress of the Communist Party of China has released five policy signals, and the reduction of Chinese bond holdings may further intensify in the future.

On November 1, the onshore price of the RMB fell below the 7.32 yuan mark in early trading, reaching a low of 7.3247 yuan; the FOB price once fell below 7.35 yuan and a low of 7.3567 yuan; the central parity rate of the yuan was reported at 7.2081 yuan, a new low in 15 years.

The “Wall Street Journal” recently quoted data from the China Central Depository & Clearing Corporation and the Shanghai Clearing House showing that the total amount of Chinese bonds and other yuan-denominated debt held by international investors in the mainland fell to 3.4 trillion yuan in September, a record high in 2020. Lows since December.

Foreign investors continue to sell Chinese assets

Zheng Zhengbing, a professor at the Department of Finance of Yunlin University of Science and Technology in Taiwan, told The Epoch Times on October 31 that the sovereign fund Chinese government bonds and policy bank bonds, which were originally considered to be able to resist risks, continued to have large outflows in September, “(this) shows that investment People have a negative view of China‘s overall environment and economic prospects, and even before the 20th National Congress, they are already negative in a comprehensive way, from the stock market, real estate, financial assets, foreign exchange market, to the treasury bond market.”

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Zheng Zhengbing believes that this is the so-called “Big 20 effect”, “After the 20th National Congress, the negative effect is far worse than before October. More double than in September.”

Xie Jinhe, chairman of Caixin Media, told The Epoch Times on October 31 that on the first trading day after the closing of the 20th National Congress of the Communist Party of China, Hong Kong stocks fell sharply as soon as the market opened, dropping 1,030.43 or 6.36% in a single day, “This is a public opinion vote. , a very direct action”.

Xie Jinhe said that not only the Hong Kong stock market, but also after the opening of the US stock market on the evening of the 24th, Pinduoduo’s share price fell by 24.6%, and most of the Chinese-funded companies listed in the United States fell by more than 10%. are selling Chinese assets.”

Xie Jinhe: The 20th National Congress of the Communist Party of China released five policy signals

Xie Jinhe analyzed that the 20th National Congress of the Communist Party of China has released a series of signals about the direction of policies: first, the reform and opening up established in the Deng Xiaoping era seems to have come to an end; second, the authorities have full control over the new economic network and control over Alibaba or Tencent The strength is even heavier; third, “common prosperity” seems to show no signs of stopping; fourth, the behavior of profit-making through the capital market is no longer encouraged; fifth, under the US chip war against China and the adjustment of the supply chain structure, many foreign After leaving, China‘s real estate bubble appears to be about to burst.

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Xie Jinhe believes that after the 20th National Congress of the Communist Party of China, foreign investors will further evaluate China‘s future economic positioning and direction. The continuous selling of RMB bonds by foreign investors is an extension of the effect of the falling stock market, and it is also a serious issue faced by foreign investors.

“Actually, in 2017, I have emphasized that China‘s economy may face a very severe adjustment. I also called on Taiwanese businessmen to remove the supply chain. At that time, many Taiwanese businessmen thought it was a joke.” Xie Jinhe said, “Now everyone will find out , if your eggs are placed in the blue seed of China, you may face the greatest threat.”

Xie Jinhe cited Lin Shiting who founded Lugang Town Restaurant, TutorABC founder Yang Zhengda, Hong Kong businessman Li Ka-shing, etc. “They all sold their assets in the mainland when China‘s economy was optimistic. The winner is when others don’t know it. That’s why I say that when I see the situation at the 20th National Congress of the Communist Party of China is not good, I have to take action, which is equivalent to taking cover when I hear the sound of gunfire, which may have been hit by bullets.”

Zheng Zhengbing: Geopolitical risks intensify, foreign businessmen withdraw from China

Zheng Zhengbing mentioned that during Xi Jinping’s second term, China focused on ideology or national security and Sino-US confrontation, which made these entrepreneurs feel uneasy a few years ago or a year ago, so their assets Just doing processing.

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“If you could have foreseen this trend a few years ago or a year ago, you can basically sell at a high point, and the loss is relatively small. If you have only moved this year, it is already a bit slow.”

Zheng Zhengbing said that after the 20th National Congress of the Communist Party of China, the situation has become clearer. In his speech, US Secretary of State Blinken warned four times that the CCP will speed up its military attack on Taiwan, and foreign-funded enterprises with physical investment are also under pressure to withdraw from China. , foreign businessmen have realized that the risk of war has greatly increased.”

Velong Enterprises, a U.S. kitchen appliance maker, and South Korea’s SK Hynix have all expressed their consideration of withdrawing from China. A survey by the Center for Strategic and International Studies, a Washington-based think tank, shows that Taiwanese companies seem to be withdrawing their business from China at a “record-breaking” level.

Responsible editor: Li Qiong#

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