The Chinese stock market and the Hong Kong stock market are the only two markets in the world that have declined for three consecutive years. The picture shows the Shanghai Stock Exchange data picture. (China Pictures/Getty Images)
[The Epoch Times, Chwefror 17, 2024](Reported by Epoch Times reporters Huang Yun and Luo Ya) The Chinese stock market and the Hong Kong stock market are the only two markets in the world that have declined for three consecutive years. The Chinese New Year holiday is coming to an end, and the international financial community is paying close attention to the rise and fall of the Chinese stock market after the resumption of trading.
Experts analyze that with the “disconnection” of Western countries, the connection between China’s stock market and global stock markets has been significantly reduced. China’s stock market crash has had very little impact on the world, and some countries have even benefited.
Trading experts analyze A-share trends on the first day of the Year of the Dragon
On the first day of trading in the Year of the Dragon, Taiwanese stocks opened red. Early on February 15, the index increased by more than 600 points, breaking through 18,700 points and reaching a record high of 18,725 points.
On February 13, the Japanese stock market opened its first trading session in the Year of the Dragon, jumping 350 points to close up at 1,066.55 points. It reached an intraday high of 38,010.69, the first time it broke 38,000 points in 34 years.
On February 19, the mainland stock market will open for the first time in the Year of the Dragon, whether the Chinese stock market rises or falls has attracted a lot of attention.
Since entering 2024, China’s stock market has been falling, with the Shanghai Stock Exchange Index falling to 2,655.09 points, a five-year low. Before the stock market closed for the Chinese New Year, with Xi Jinping personally taking action, Central Huijin taking steps to protect the market, and the China Securities Regulatory Commission continuously voicing support, A shares rose slightly last .
As for whether A shares will fall again after the market opens in the Year of the Dragon, Sun Guoxiang, director of the Asia-Pacific Institute at Nanhua University in Taiwan, told The Epoch Times, “We now predict that the Chinese ( The Chinese Communist Party government will definitely take some preventive measures. For example, it may have internally requested the stocks of some state-owned enterprises to prevent them from being freely sold. “
He believes that after the market opens, the selling and fleeing of some retail investors or small investors may not have a big impact on the entire Chinese stock market. What we really need to pay attention to is the trends of foreign capital, including whether foreign capital has sold and re-entered the Chinese stock market It may be a more important factor that really affects the future direction of the Chinese. the stock market.
He said that if the trust or confidence of foreign currency in the Chinese stock market cannot be maintained, the Chinese stock market may enter a collapse situation. If the Chinese Communist Party authorities save the market, they can only make more and more holes do them, because the real answer may be the functioning of the market economy. .
During the Chinese New Year, bad news for the Chinese stock market came out again. On February 13, the fourth day of the first lunar month, Morgan Stanley Capital International (MSCI Inc.) removed 66 Chinese companies from the MSCI China Index in its latest quarterly assessment. This will apply to the MSCI World Index and will be effective at the close of trading on February 29.
Zhang Tianliang, an expert on China affairs, analyzed that this means that Morgan Stanley will start selling these Chinese stocks on a large scale on February 29. In this way, the Chinese stock market will plunge after the Chinese New Year.
The latest survey shows that Wall Street is trying to avoid Chinese stocks and move investment portfolios overseas.
Today is not what it used to be. China’s stock market has very little impact on the world
According to the latest statistics from Marketplace, when calculated from the highest point in 2021, the market value of China’s stock market has evaporated by about US$ 7 trillion. an average loss of nearly US$35,000 per shareholder over the past three years.
Since the beginning of this year, the rise in China’s stock market has had little impact on the world. Global stock markets are surging, with stock markets in the US, Japan, Germany, France, Italy and India all hitting record highs.
Wu Jialong, Taiwan’s economist general, told The Epoch Times, “I was very worried that China’s stock market and economy were not doing well, which would drag others (other countries). This was a reasonable guess, but in the past year, I found that was not the case. Now. China has almost no influence on other countries, has not dragged others down, and has not caused the global economy to decline.”
“In the eyes of the United States, China has reached an insignificant point. China (the stock market) is going down, but the United States is going up, reaching an all-time high. The United States, Japan, and Taiwan are all going up near historic highs, and China is going down. Walk.”
Balding, an American economist, told VOA that China’s economy is huge and once had a great influence on the world economy. In the past, the rise and fall of China’s stock market often affected the global stock market, but since the acceleration of Western countries led by the United States, Disconnecting from China and reducing dependence on supply chains and Chinese products, and switching to goods manufactured in Mexico, Vietnam, Cambodia and the Philippines, is tantamount to building a firewall between the world and China The connection between Chinese stock markets and global stock markets It has also been greatly reduced.
He said, in other words, the description of “China’s economy is sneezing and the whole world is catching a cold” no longer makes sense.
Wu Jialong analyzed, “(In the past 10 or 20 years), no matter what industry Chinese companies enter, from memory, semiconductors, memory panels, solar energy, and electric vehicles, overcapacity, and then it becomes price-cutting competition Other countries Competitors are squeezed out, and it’s been this way all along.”
He said that with the economic “decoupling” of Western countries, China’s supply chain has been hit, and the pressure of vicious competition on Chinese companies has receded, and manufacturing companies in other countries have breathed a sigh of relief.
Mainland netizens also said that the 2015 A-share plunge could bring the world down, but this time there was not even a splash, which shows that foreign capital has indeed achieved “decoupling” in the past few years, and the threat to the global economy due to the financial nuclear bomb of the CCP has been significantly reduced. Without its threatening power, China’s financial sector is an easy target to leave.
The “disengagement” of Western countries is still accelerating. According to the latest statistics from the Central Bank of China, the total amount of Chinese stocks and bonds held by foreign investors has fallen from 8 trillion yuan at the end of 2021 to 6.6 trillion yuan in June 2023, with a net outflow of 18%. . Foreign capital shares reached RMB 80.1 billion and RMB 59.5 billion in the third and fourth quarters of 2023, and have reached RMB 31.4 billion in less than 20 days this year.
The outflow of Western capital from China will also affect China’s own capital outflow.
Conversely, the stock markets of other countries can benefit
As China’s stock market falls, experts believe that Chinese investors may move to other foreign markets, and stock markets in other countries may benefit.
Wu Jialong said, “(China’s stock market plunge) not only did not drag others down, but actually helped others move up. China’s red supply chain and price-cutting competition for others has now completely subsided, so now other people’s lives are much better . , that’s how it happens. So not only does it not drag others down, it actually helps others move up.”
Currently, a large number of Chinese investors have started to turn to the Japanese stock markets for safety. On January 11, the trading volume of China Nomura Nikkei 225 ETF Japan in Shanghai was more than 10 times the average daily trading volume in 2023.
Tetsuhiro Nishi, executive director of Nomura Securities in Japan, believes this trend could continue as uncertainty still exists in the Chinese market, causing capital to flow into the Japanese stock market.
Meanwhile, US emerging market investors are snapping up China-excepting Exchange Traded Funds (ETFs) while dumping China-focused funds.
ETF.com data shows that net capital inflows to eight emerging market ETFs (excluding China) listed in the United States last year more than tripled from the previous year, reaching $5.3 billion. Meanwhile, 55 China-focused ETFs had a combined net outflow of $802 million in 2023. China-focused ETFs have suffered outflows for three consecutive quarters since April of last year.
Wu Jialong said, “In the past, we were worried that if China went down, other countries (other countries) would follow suit and be dragged down, right? That’s not true now. Now, China going down makes others feel comfortable.”
Editor in charge: Sun Yun#
#Today #plunge #Chinas #stock #market #affect #world #Disconnect #Shares #Taiwan #Stocks
