Why did Soros short China and Zhihu?

Soros is once again at loggerheads with the China administration. When he recently made a high-profile statement at the Swiss Davos Forum that he was shorting Asian currencies, Xinhua News Agency and People's Daily Overseas Edition issued a series of warnings, saying that the consequences of shorting were very serious.

It is obviously an eventful autumn at present. First, the central bank and bears fought fiercely in the offshore RMB market, and then Hong Kong stocks and Hong Kong dollars continued to plummet, causing panic. At this sensitive node full of uncertainties, Soros and the China government once again confronted each other after a lapse of 19 years, which makes people daydream.

In this debate, the following points are worth noting:

1. Xinhua News Agency warned that "malicious short selling will face higher transaction costs and possible serious legal consequences" was written in English, and its intention to shout to international short selling forces represented by Soros was obvious.

2. Many people will think of the financial war of 1998. However, it is not what it used to be. At present, the China and Hong Kong governments have more financial resources at hand, and it is even more difficult for Soros to short RMB or HKD as he wishes.

3. Some analysts believe that the cunning Soros's public announcement of shorting Asian currencies may be a "diversion", and the China mainland and Hong Kong governments tightened liquidity to rescue the market, which led to a sharp drop in the stock market. His real short target is A shares and Hong Kong stocks.

4. In the first month of the new year, Soros once again fought with the China government. This may imply that RMB internationalization is a journey with no turning back, and the eventful autumn has just begun.

Recently, there have been many international voices "singing empty" about China's economy, and some even say that the economic slowdown in China has affected the global economy. In particular, Soros, the founder of American Quantum Fund, recently made a high-profile short bet on RMB and China stock market, which reminds people of the Asian financial turmoil of 1997. Soros said that China's economy may face the risk of "hard landing". This is not the result he expected, but the conclusion drawn through observation. Soros also said that although China has sufficient resources to cope with the current situation, the economic slowdown will still have spillover effects on the global market. Soros said that the economic slowdown in China caused by excessive debt will also worsen the problems in other parts of the world. As China's economic slowdown leads to the decline in the prices of crude oil and raw materials, China will become the most fundamental cause of global deflation.

In addition to bearish, Soros also shot. He said that he bought US Treasury bonds at the end of last year, shorting the stock markets of raw material producing countries and betting that Asian currencies would fall against the US dollar.

Xinhua News Agency has also begun to publish articles criticizing such remarks about China's economy, and may issue a series of "measures to stop international guerrilla funds from shorting China". In recent days, Xinhua News Agency has repeatedly voiced "propaganda" to empty China speculators. After warning Soros that shorting China was a "dead end", Xinhua published an editorial overnight. The article bluntly said, "Soros's' observation conclusion' that' China's economy will inevitably make a hard landing and China will aggravate global deflation' obviously belongs to' selective blindness'." Short sellers live in the past, but China is grasping the present and planning for tomorrow. "Once the state introduces measures to crack down on short-selling speculators, it will cause a sharp rebound in the stock market. Wait and see in the market.