1. The decline of the U.S. dollar, the U.S. subprime mortgage crisis caused massive bank losses, the global economic outlook deteriorated, and the global stock market plummeted; 2. Ping An of China’s huge financing plan completely collapsed the insufficient market confidence; 3. Funds exchanged large amounts of profits

, after a huge loss of more than 70 billion yuan in the fourth quarter, the fund exchanged a large amount of book profits, accumulatively reduced its holdings of large-cap stocks such as Ping An of China and CITIC Securities, and realized a cumulative profit of 240 billion yuan; 4. In December 2007, foreign exchange holdings experienced negative growth for the first time in 7 years.

, a decrease of 230.3 billion yuan from the previous month.

Based on the monthly average of 288.1 billion yuan in new foreign exchange outstandings in the first 11 months of 2007, the actual decrease in foreign exchange outstandings in December 2007 was 510.4 billion yuan. This was China’s first decline in 84 months and the first decline in China’s history.

The largest single-month decline in foreign exchange balances since.

Some analysts said that this may affect excess currency liquidity, thereby inhibiting the market's rebound space, which is another inducement for the market to fall.

The stock market always reflects the situation of the real economy first.

"Currency liquidity" refers to the amount of currency placed in the market.

When interest rates are low to a certain level, everyone in the entire economy expects interest rates to rise, so everyone wants to hold currency rather than bonds. Speculative money demand will tend to infinity. If the central bank continues to increase

The money supply will be completely absorbed by people's infinite speculative demand for money, so that interest rates will no longer fall. This extreme situation is called a "liquidity trap."