Wealth

In order to help Dad Fan Heng build momentum, and contact people in Beijing, Fan Wuyi~Jingcheng, held several high-end cocktail seminars, mainly focusing on the current financial crisis as the topic, and organized some charity activities by the way.

Because of Fan Wuyi’s move, although the central government also expressed support for the SAR government during the financial turmoil, the pressure on the SAR government was much less, and it did not even provide assistance to the SAR for foreign exchange reserves, so it maintained the Hong Kong dollar. The stability of the exchange rate, which was not thought of at the beginning.

If so, interest groups led by Soros are still creating public opinion, saying that the Chinese mainland and Hong Kong authorities manipulate exchange rates and violate the principles of a free economic market. This is really shameless.

Affected by the financial crisis, the U.S. and Hong Kong stock indexes have fallen below historical records, and the crisis has also spread to South Korea and Japan. As China implements foreign exchange control and a fixed exchange rate system, the renminbi is not a freely convertible currency, and there is no selling pressure from the international financial market. There are no objective conditions for direct attacks on the renminbi by international speculative capital.

It is worth mentioning that during the financial turmoil, the United States and Japan both hope that the renminbi will depreciate.

Although devaluation can enable more than one-third of the export industries of the people’s economy to gain new competitiveness, it means that economic growth in other Asian countries that compete with China is more difficult, and the Asian consumer market is also an important part of China’s foreign trade. Moreover, the devaluation of the renminbi is more harmful to China, because devaluation will slow down the inflow of foreign capital and increase the outflow of foreign exchange, which will restrict the growth of China’s economy and directly affect the balance of international payments, which may cause further devaluation of the renminbi. Again the vicious circle of inflation.

Therefore, Zhu Ban, who has been promoted to prime minister, publicly promised on behalf of the Chinese government that the renminbi is very strong and will not depreciate. This is also in China's long-term interests. The Chinese government's insistence on not devaluing the renminbi has largely prevented international funds from radiating the crisis of the financial turmoil to the country and stabilized the confidence of Asian countries.

At the end of October, Fan Wuyi went to Beijing again to attend an economic seminar hosted by senior officials to discuss the impact of the current Southeast Asian financial turmoil in order to assist senior officials in formulating corresponding economic policies.

Before the meeting, I had a meeting with Boss Zhu, who became prime minister, without any illness.

For example, when Boss Zhu and other high-level officials had conversations with Fan Wuyin, the conversations between the elders and the younger generations were still very casual. After Fan Wuyin helped the Hong Kong Special Administrative Region tide over the financial turmoil, it seemed much more solemn.

after all. People who can help stabilize the exchange rate of the Hong Kong dollar with tens of billions of dollars like Fan Wuyao. There is no second person anymore. It is the entire local consortium of Hong Kong. Nor does it have this financial power to have this courage.

"Listen to you gaining a lot in this financial turmoil?" Boss Zhu sat next to Fan Wuyi's place. Asked casually.

Fan Wuyao nodded and said, "I'm not worried that the Hong Kong Monetary Authority will lose all of my money. I can't get the money back then, so I must get back a little profit from the market."

Boss Zhu smiled. "It's not that simple, right? I heard that you are fighting with clam and Weng Deli. He copied Soros's back path. It made him in a dilemma on the Hang Seng Index.

Fan Wubing smiled happily. There is no denial. In fact, he was very beautiful this time. Taking advantage of Soros and others entangled with the Monetary Authority on the issue of the exchange rate of the Hong Kong dollar. Short the Hang Seng Index. It not only releases short energy. Also hit Soros and others by surprise. Not only does it have little room for profit on the HSI. The Hong Kong dollar is also struggling. I am also worried that I am stuck in the Hong Kong market. Forced to accept this failure.

"At the seminar later. You can tell us something too." Boss Zhu suggested.

"It's okay, in fact, I also have something to say, and I don't want to say anything, but can this grassroots seminar be kept secret?" Fan Wubing asked.

"We don't keep meeting minutes. They are pure seminars. The participants are all high-level people or our economic experts." Boss Zhu replied.

Fan Wubing nodded and agreed.

When they went to the venue, Fan Wubing saw three circles around the round table. There were more than one hundred people. Most of the Politburo Standing Committee members and committee members were present, and some of them were well-known in China. An economic expert, it seems that there is also an old professor who is a burden, Fan Wubing thought to himself, this lineup is really big enough.

It seems that high-level officials are paying more attention to economic issues, which is a good thing.

After the people arrived, the meeting began, and an expert from the Academy of Social Sciences was analyzing the causes of the Southeast Asian financial turmoil.

"In recent years, Western investment banks, especially those in the United States and Europe, have begun to establish a monopoly in financial services in Southeast Asia. Some analysts have pointed out that since 1991, India’s

The capital markets of the six higher economies such as Malaysia, the Philippines, South Korea, Taiwan, and Thailand have absorbed most of the financial instruments used by major institutions from different countries to invest in the six Southeast Asian economies. Institutional investment in the United States and Europe accounted for more than 50% of foreign capital in Southeast Asia. "The 60-year-old economist talked eloquently, "The Asian financial turmoil has its important internal causes. This is the economic fragility caused by dependence on the US dollar, which makes Asian currencies the slasher of the US dollar. . In order to attract foreign investment, especially direct investment in the U.S. dollar, Asian countries dominated by an export-oriented or export-oriented economic development model have adopted a fixed exchange rate system to peg the U.S. dollar so that foreign direct investment will not fluctuate due to exchange rate fluctuations after the investment expires. Bear exchange rate losses. "

Seeing that everyone didn’t understand, he went on to explain, “For example, investors in U.S. dollars lend at very high interest rates. When the loan expires, they can also exchange local currency for U.S. dollars at a fixed exchange rate and receive stable interest. Income. If the exchange rate falls, the local currency depreciates, then they will lose. The magnitude of the loss depends on the magnitude of the depreciation. In short, these investment institutions are betting on the ability of the local government to maintain a fixed exchange rate. Therefore, a fixed exchange rate is attractive. Necessary conditions for foreign investment."

Fan Wuyao also knows this point. In order to obtain more trade surplus, Asian countries have adopted lower exchange rates than their competitors to peg to the US dollar, which is to obtain a competitive advantage in export products by devaluing their currencies. China also joined the ranks in the early 1990s. The yuan depreciated from one U.S. dollar to two yuan before the exchange rate reform to one U.S. dollar to 8.3 yuan.

Under the exchange rate system that pegs to the US dollar, the economy can take a ride on the depreciation of the US dollar.

However, there is a huge risk in doing so, that is, when the dollar appreciates, the currency that is pegged to the dollar will also appreciate. Then if its economy cannot support the appreciation of the exchange rate, or it is strong, then it is artificially overestimating its currency. .

In fact, in the international and foreign markets, the exchange rate of the U.S. dollar against major currencies changed from depreciation to rise in 1994. Due to the continuous substantial appreciation of the US dollar, the real effective exchange rates of major Southeast Asian currencies such as the Thai baht have continued to strengthen with the US dollar, weakening their export competitiveness, and the decline in exports has led to a rapid expansion of the current account deficit.

The current account is an important item of national revenue and expenditure, and the current account is in deficit, so you have to borrow money to live your life. There are generally two ways of borrowing. One is to depreciate the domestic currency to reduce the export cost of domestic goods, thereby increasing the export surplus, using the trade surplus to make up the current account deficit and achieving a balance of international payments. Of course, the government can also implement export subsidies, such as export tax rebates. Wait to increase the surplus, but this will be limited.

However, a fixed exchange rate is a necessary condition for attracting foreign funds. To lower the exchange rate, the exchange rate must be freely floated. This is a contradiction.

There is also a more straightforward method, that is, the government will attract more foreign capital inflows through various preferential policies and high interest rate policies, and use capital account surpluses to make up for the current account deficit to achieve a balance of international payments. The prerequisite for policy adjustment is the opening of the capital market, that is, capital can flow in and out freely, and the inflow must be greater than the outflow in order to have a capital account surplus.

Under the housing system, because the Thai baht exchange rate is artificially fixed, it has lost the function of adjusting trade balance and balance of payments ~www.wuxiamtl.com~ In the face of expanding current account deficits, the Thai government actually has only one choice, which is to speed up The pace of opening up the capital market has attracted more foreign capital inflows through various preferential policies and high interest rate policies.

The **** to the system and high interest rate policy enables speculative capital to achieve risk-free arbitrage. At this time, foreign capital, especially hot money, flooded into Thailand.

The massive inflow of capital is certainly not a bad thing, but if there is no way to lock in these capitals to serve the region’s economic growth for a longer period of time, then the problem is serious. Short-term capital is obviously more speculative capital.

“In the case of short-term capital outflows, Thailand’s economic growth has slowed significantly. At this time, an expansionary monetary policy is needed to stimulate economic growth. However, in order to maintain a fixed exchange rate pegged to the U.S. dollar, to prevent foreign capital outflows and to curb With the asset price bubble, the Central Bank of Thailand was forced to continue to implement a tightening monetary policy, continuously tighten monetary policy, and continue to raise interest rates. Last year, Thailand's interest rate reached 13.25%, which was the highest level in Asian countries and regions at that time." Economic experts analyzed, “In the face of such high interest rates, the Thai government is obviously under great pressure, and the national economy is on the verge of collapse.”

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