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Before the government rescued the market, foreign investors used the Shanghai Stock Connect to continuously increase its weight. The usage of Shanghai Stock Connect reached 23 billion on the 70.66rd, the third highest in history. However, after a few days of changes in the situation, the foreign capital, which has always been responsive, immediately changed its face and set off a wave of fleeing. Why do foreign investors change so quickly in the short term? Why did the foreign media compare this Chinese rescue with the American banking rescue 3 years ago? What does this analogy imply? The sudden change of foreign capital to escape from China's stock market, the problems behind it are worth pondering.

Although on July 7, Goldman Sachs still sang the Chinese stock market, believing that after a few weeks of plunge and adjustment, the Chinese stock market will still rise to more than 3 points within a year, an increase of 5000%. It is estimated that this is the general view of foreign investors before the government's comprehensive rescue on July 29.


However, foreign investors, which have always been responsive, after a few days of changes in the situation, especially after the stock market plummeted to nearly 30% after three weeks, immediately changed their faces and set off a wave of fleeing for their lives. The two-way Shanghai-Hong Kong Stock Connect on July 7 Net sell.

Shanghai Stock Connect will sell 133.85 billion yuan, and Southbound Trading will sell a net 14.57 billion yuan. Foreign funds have fled the Chinese stock market.

This is because, from the perspective of the international market, the current Chinese stock market will not only be affected by the Greek crisis, but after the Chinese government rescues the market, the market has increased its worries and worries about the Chinese stock market.

Because, judging from the situation of the Chinese stock market on July 7, although the Shanghai Composite Index is guaranteed to rise, the GEM is unable to recover and continues to fall sharply.

According to Bloomberg News,The current Chinese government's plan to rescue the stock market seems to be a replay of the Great Depression script of the US stock market in 1929.Although there is a gap of 86 years between China and the United States in the past, the distance is 7300 miles.

But the Chinese government is using the same tactics used by the U.S. banking industry on the eve of the Great Depression in 1929 to counter the unprecedented collapse of the Chinese stock market. As for the result, although the article did not say it, it has already hinted that the result will be the same.

Not to mention whether foreign capital is fleeing the Chinese stock market, foreign capital is shorting the Chinese market. However, there are several issues that the Chinese government and investors should address.

The first is why foreign investors change the market so quickly in the short term, from being bullish on the Chinese stock market and immediately bearish. And this conversion was after the Chinese government entered the market to rescue the market. There may be a recent sudden change in the international market.

Especially after the Greek referendum, the international financial market has added a lot of uncertainty.

For example, the miserable situation in the entire international market on July 7 may be related to the Greek crisis. In this case, coupled with the Chinese government's rescue of the market, it is normal for foreign investors to escape from the Chinese stock market in order to protect themselves.

Also, why the Chinese government bailout has become a reason for foreign capital to escape from the Chinese stock market. Does foreign investment think that the government's rescue of the market can play a very limited role? On the contrary, excessive intervention in the market will increase the uncertainty of China's stock market. Foreign capital had to withdraw first. If this is the case, the government's rescue plan should first formulate more good aftermath measures.

The second reason is why foreign media compare the rescue of China this time with the rescue of the US banking industry 86 years ago. What does this analogy imply?

Judging from the Great Depression in 1929, although the initial rescue of the US banking industry caused a technical rebound in the stock market, the stock market fell further and it was impossible to save it, and finally triggered the global economic depression. Has the Chinese government thought about this?

It can be said that in terms of the current Chinese stock market and economic situation, it is of course fundamentally different from that of the United States. The Chinese government has repeatedly reiterated that the government has the ability to control the risks of the Chinese stock market and has the ability to ensure that China does not have systemic risks.

Of course this confidence is good, but the government has not thought about it.Any systemic financial risk is uncontrollable, otherwise it is not a systemic financial risk.

Systemic financial risks are only known after they have occurred. When systemic financial risks occur, is it possible for the government to control such risks?

Therefore, foreign investors suddenly fled from the Chinese stock market. Some foreign media compared what happened in the Chinese stock market with the Great Depression of 1929. Although this is not a good thing, can the Chinese government and domestic investors see their own from it? What about the meaning? Because there are indeed many questions worth pondering.

文章转载自商业见地网(bwchinesenews) 作者:易宪容

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