Soros once again clashed with the Chinese government. When he recently made a high-profile statement at the Davos Forum in Switzerland that he was shorting Asian currencies, Xinhua News Agency and the overseas edition of the People's Daily issued articles one after another warning that the consequences of shorting would be serious.
These are obviously troubled times. First, there was a fierce battle between the central bank and short sellers in the offshore RMB market, and then Hong Kong stocks and the Hong Kong dollar continued to plummet, causing panic. At this sensitive node full of uncertainty, Soros and the Chinese government are once again confronting each other after a lapse of 19 years, which makes people imagine.
In this debate, the following points are worth noting:
1. Xinhua News Agency warned that "malicious short selling will face higher transaction costs and possible serious legal consequences." "The comment was written in English, and its intention to speak out against the international short-selling forces represented by Soros is obvious.
2. Many people will think of the financial war in 1998. But things are not what they used to be. Now that the Chinese and Hong Kong governments have more financial and resource resources, it is more difficult for Soros to short the RMB or the Hong Kong dollar as he wishes.
3. Some analysts believe that the cunning Soros’s public announcement of shorting Asian currencies may be an attempt to “attack the east and attack the west.” The Chinese and Hong Kong governments tightened liquidity in order to save the currencies, causing the stock market to plummet. The short-selling targets are A-shares and Hong Kong stocks.
4. In the first month of the new year, Soros was once again gearing up with the Chinese government. This may imply that the road to RMB internationalization is a journey with no turning back, and the troubled times have just begun.
In recent times, there have been repeated voices in the international community that "speak empty words" about China's economy. Some even say that China's economic slowdown has affected the global economy. In particular, Soros, the founder of Quantum Fund in the United States, has recently made a high-profile statement about shorting the RMB and China's securities market. This is reminiscent of the Asian financial crisis in 1997. Soros said that China's economy may face the risk of a "hard landing". This was not a result he expected, but a conclusion drawn from observation. Soros also said that although China has sufficient resources to deal with the current situation, the economic slowdown will still have spillover effects on global markets. Soros said the slowdown in China's economy due to excessive debt will also worsen problems in other parts of the world. As China's economic slowdown causes crude oil and raw material prices to fall, China will become the most fundamental cause of global deflation.
In addition to being bearish, Soros also took action. He said he bought U.S. Treasury bonds at the end of last year, shorted the stock markets of raw material-producing countries, and bet that Asian currencies would fall against the U.S. dollar.
Xinhua News Agency has also begun to publish articles to criticize such remarks that bear down on China's economy, and may introduce a series of "measures to block international guerrilla funds that short China." In recent days, Xinhua News Agency has issued a series of "screams" to belittle China's speculators. After previously warning "Soros" that shorting China would be a "dead end", Xinhua News Agency published another editorial overnight. The article bluntly stated that "Soros's so-called observation that 'China's economy will inevitably have a hard landing and China will exacerbate global deflation'" The conclusion is obviously 'selective blindness'. "Short-sellers live in the past, but China is grasping the present and planning for tomorrow." Once the country introduces measures to crack down on short-selling speculators, the stock market will rebound sharply. Let’s wait and see what the market outlook will be.