Since last year, the two giants of the global economy – China and the United States – have performed in stark contrast in financial markets. China's property market has experienced a decline, while the United States has bucked the trend against the backdrop of the Federal Reserve's continuous interest rate hikes.
This phenomenon is not only puzzling, but also has sparked widespread discussion and controversy. Many interpret this discrepancy as China's defeat in the financial war, leading to weakness. However, is it really that simple? How should the outcome of the financial war be judged?
First, we need to understand that financial warfare is not a simple competition.
In fact, it involves a complex game of economic power of a country as a whole and an international financial market. Historical examples of financial warfare show that the first stage of a war is usually a war of attrition against a country's foreign exchange reserves, followed by a shock to the exchange rate.
Only when these two lines of defense are broken will all assets, including **, be affected. From this point of view, China's foreign exchange reserves have remained at 3More than 1 trillion US dollars, although the exchange rate fluctuates, but generally remains stable. This shows that China has not yet been fundamentally threatened in the battle to defend the financial fire line.
2. On the issue of foreign ownership of domestic listed companies, China's regulators have strict control measures.
The shareholding ratio of a single foreign shareholder shall not exceed 10%, and the shareholding ratio of all foreign investors shall not exceed 30%. This means that foreign investors who want to control high-quality Chinese enterprises through the secondary market face huge operational difficulties and regulatory challenges.
In addition, China has recently relaxed the restrictions on foreign ownership of manufacturing enterprises and banks and insurance institutions, allowing 100% of the shares. This is seen by some as a loss in the financial war. In practice, however, the introduction of this policy should be understood in the context of the broader international context.
With the changes in the global political and economic situation, China-US relations are facing new challenges, and international capital is also reevaluating its global strategic layout. Against this backdrop, the open-door policy can be seen as a signal from China's external retention: it welcomes long-term, stable investment by international capital, rather than short-term speculation.
At present, as the Fed's interest rate hike cycle continues, global capital flows are in a sensitive period. China's financial defense is focused on maintaining restrictions on the free movement of capital under the renminbi, and as long as this policy is not relaxed, China will be able to remain invincible in the financial war, supported by foreign exchange reserves.
To sum up, the real battlefield of financial warfare is far more than the rise and fall of the country, it is related to a country's foreign exchange security, exchange rate stability and long-term economic development potential.
And in this invisible war, China is consolidating its position and preparing for the future of global economic development through a series of carefully planned strategies and actions.