A Discussion on Stock Market Changes

Published in Wen Wei Po
(Hong Kong) on 31 August 2015
by Dr. Zeng Yuan Cang (link to originallink to original)
Translated from by Kartoa Chow. Edited by Helaine Schweitzer.
Currently, the entire world is facing a stock market crash that originated from China. In other words, the economic power of today’s China is already large enough to impact the entire world.

Initially, after witnessing the extreme behavior of the stock market and the overly high interest rate at which people were borrowing, the Chinese government intervened by investigating borrowing activities at high leverage and high interest rates. Once the investigation began, the stock market went from its peak to a plummet, in which, within a short period a time, the SSE Composite Index dropped by more than 3 percent, with speculators beginning to short sell the stock market index futures in large quantities. Consequently, the government suppressed its investigation of malicious behavior, resulting again in the stock market rising. With the resurfacing of high-leverage and high-interest rate borrowing, investigation ensued, the stock market then dropped, leading to a bailout from the government to purchase stocks with cash. However, after experiencing multiple ups and downs, many investors lost confidence. During the most recent period in which the SSE Composite Index fell to 3,500, the point at which the bailout had previously occurred, the government finally refused to intervene, leading to the index plunging to below 3,000.

Meanwhile, the U.S. stock market also began to crash. In the past eight months, the U.S. stock market has had low volatility, with the Dow Jones industrial average hovering between 17,300 and 18,300, most recently falling below 17,300 with no sign of rebound, and even plummeting to below 16,000. The reasons for the U.S. stock market crash are complicated. The crash of China’s stock market and the devaluation of the Chinese Yuan, together with American investors’ worries over whether the Federal Reserve would raise interest rates in September, were factors that led to the U.S. stock market crash. The crash reflected the investors’ expectation of an interest rate hike.

Why did the Chinese government not provide a direct bailout? The most probable explanation is that the Chinese government wished to reduce its intervention and allow the stock market to find its equilibrium and determine its own stock prices. However, at the same time, the Chinese government decided to continue to improve the business environment by cutting the reserve requirement ratio (RRR). In fact, the reason China’s stock market could begin to rise in November of last year was mainly the effect of the Chinese government’s continual improvement of the business environment, not only continually cutting the RRR, but also increasing the capital construction budget, proposing a “one belt, one road” strategy.

With the A-share crash in China and the U.S. stock market crash, Hong Kong and the rest of the world inevitably followed.

We should focus more on whether the stock market crash will lead to a deterioration of the economic environment, which was why the Chinese government announced cutting the RRR after the SSE Composite Index fell to below 3,000. With the Hong Kong dollar pegged to the U.S. dollar, an increase in the interest rate in the U.S. would inevitably cause Hong Kong to follow, surely adding a burden to the already troubled Hong Kong economy. This is an issue that the Hong Kong government and its residents will have to tackle. Faced with an uncertain future, how many remaining resources do the people in Hong Kong have to continue their internal strife?


目前,全世界正面對一場股災,這場股災是從中國開始的,換言之,今日的中國經濟力量已經龐大到足以影響全世界。

開始的時候,是中國政府眼看股市太過狂熱,而且民間借錢炒股的借貸比率太高,因此出手查處被稱為場外配資的行為。所謂場外配資就是高槓桿高利率的借貸炒股,政府一查處,股市就由高峰處直跌而下,在很短的時間內,滬綜指下跌三成以上,投機者開始大手沽空股指期貨。於是,政府又出手打壓查處惡意沽空行為,股市又漲了,快速地回升,場外配資再出現,於是再次查處,股市再跌,一跌,又再出手救市,政府動用現金買股票。不過,經過數次的升升跌跌之後,不少股民失去信心了,終於最近一次滬綜指跌至上幾回政府出手救市的3,500點時,政府沒有再出手救市,於是股市一瀉如注,滬綜指跌破3,000點。

與此同時,美國股市也出現崩盤式的下跌。過去8個月,美國股市於高位浮沉波幅不大,道瓊斯指數於17,300至18,300之間徘徊,最近的一次,終於跌破17,300而沒有反彈,更直瀉至16,000之下。美股的下跌,原因相當複雜,中國股市大跌,人民幣貶值都是導致美股下跌的原因,再加上美國投資者本身也很擔心美國聯邦儲備局會不會在9月份加息,股市的暴跌是投資者對加息的預期。

為什麼中國政府不再直接出手救市?相信最大的可能性是中國政府希望減少干預,讓股市自己尋找支持點,讓市場來決定股價的高低。不過,與此同時,中國政府決定不斷地改善營商環境,繼續減息降準。實際上,中國股市之所以能從去年11月開始上升,主要的影響力就是中國政府不斷地改善營商環境,除了不斷地減息降準外,也增加基建的預算,提出「一帶一路」戰略規劃。

中國A股股災,美國股災,香港及世界各地都不可避免地一起出現股災。

股災會不會導致經濟環境變差才是我們更應該關心的事,這也是為什麼中國政府在滬綜指跌破3,000點後宣佈減息降準。港元與美元掛鈎,如果美元加息,港元不可避免地也得加息,那肯定會對已經問題重重的香港經濟再踩多一腳,這是香港政府、市民都必須面對的。面對不明朗的將來,香港人還有多少本錢可以繼續內鬥?
This post appeared on the front page as a direct link to the original article with the above link .

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