I helped my father Fan Heng build momentum and contacted people in Beijing. Fan Wubing, and held several high-end cocktail party seminars in Beijing, mainly focusing on the current financial crisis as the topic and holding some charity activities.

Because of Fan Wubing's actions, although the central government also expressed its support for the SAR government during the financial crisis, the pressure it underwent was much smaller. It did not even provide foreign exchange reserve assistance to the SAR, and maintained the stability of the Hong Kong dollar exchange rate, which was unexpected at the beginning.

Even so, interest groups led by Soros are still creating public opinion, saying that the manipulation of exchange rates by mainland China and Hong Kong authorities violates the principle of free economic market is really shameless.

Affected by the financial crisis, the U.S. and Hong Kong stock indexes fell below historical records, and the crisis also affected South Korea and Japan. Due to China's foreign exchange control and fixed exchange rate system, the RMB is not freely convertible, and there is no selling pressure from the international financial market. There is no objective condition for the direct attack on the RMB by international speculative capital.

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

Although depreciation can enable more than one-third of the export industry in the national economy to gain new competitiveness, it means that economic growth of 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. Furthermore, the depreciation of the RMB will be more harmful to China, because depreciation will slow down the inflow of foreign capital and intensify foreign exchange outflows, which will restrict the growth rate of China's economy and will directly affect the balance of payments, which may cause further depreciation of the RMB and re-establish the vicious cycle of inflation.

Therefore, Zhu Ban, who has been promoted to Prime Minister, publicly promised on behalf of the Chinese government that the RMB is very strong and will not depreciate, which is also in line with China's long-term interests. The Chinese government's insistence on not depreciating the RMB has largely stopped international funds from radiating the crisis of the financial crisis to the domestic market and stabilizing the confidence of Asian countries.

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

Before the meeting, Wuyan met with Boss Zhu, who was appointed as Prime Minister.

For example, when Boss Zhu and other senior executives were having conversations with Fan Wubing, they still had a casual conversation between elders and younger generations. After Fan Wubing helped the Hong Kong Special Administrative Region overcome this financial crisis, it seemed much more serious.

After all, there is no other person who can use hundreds of billions of dollars like Fan Wubing to help stabilize the Hong Kong dollar exchange rate. Even the entire Hong Kong local consortium does not have the financial power and courage.

"I heard you have gained a lot in this financial storm?" Boss Zhu sat next to Fan Wubing's place and asked casually.

Fan Wubing nodded and said, "I'm still worried that the Hong Kong Monetary Authority will lose all my money. I can't afford to pay back the money at that time, so I must get some profit from the market."

Boss Zhu smiled and said, "It's not that simple, right? I heard that you are fighting for the squad with the clams. You took advantage of Soros's retreat, which made him go in a dilemma on the Hang Seng Index and returned in a defeat."

Fan Wubing smiled and did not deny it. In fact, he was very good at this time. While Soros and others were entangled with the Monetary Authority about the issue of Hong Kong dollar exchange rate, shorted the Hang Seng Index, which not only released short energy, but also caught Soros and others off guard. Not only did he not have much profit space in the Hang Seng Index, but he also struggled with the Hong Kong dollar. He was also worried that he could not get enough in the Hong Kong market. He was forced to accept this failure.

"At the seminar later, you can also send us a message.

” Boss Zhu suggested.

"It's OK to speak, but in fact I'm a little bit trying to say something, and I can't speak quickly. But can this grassroots seminar be kept confidential?" Fan Wubing asked.

"No meeting minutes are made, purely for seminars, and the participants are all senior executives or our economic experts." Boss Zhu replied.

Fan Wubing nodded and agreed.

When they went to the venue, Fan Wubing saw three circles of people around the round table, with more than 100 people in total. Most of the Standing Committee and members of the Politburo attended, and some were well-known domestic economic experts. There seemed to be an old professor who was burdened. Fan Wubing thought, this lineup was really big enough.

It seems that the top leaders are paying more and more attention to economic issues, which is a good thing.

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

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

The capital markets of six-degree economies, including Malaysia, the Philippines, South Korea, China, Taiwan and Thailand, have absorbed the vast majority of the financial instruments issued by major institutional investors from different countries in six Southeast Asian economies. Institutional investors in the United States and Europe account for more than 50% of the foreign capital in Southeast Asia." The economist in his sixties said, "There is an important internal cause of the occurrence of the Asian financial crisis, which is the economic vulnerability formed by the dependence on the US dollar, which makes Asian currencies a ghost. In order to attract foreign capital, especially the direct investment of the US dollar, Asian countries dominated by the outward-oriented, that is, the export-led economic development model, have adopted a fixed exchange rate system to peer at the US dollar, so that foreign direct investment will not bear exchange rate losses due to exchange rate fluctuations after the investment expires."

Seeing that everyone was a little confused, he continued to explain, "For example, US dollar investors lend at a very high interest rate. When the loan expires, they can also exchange local currency for the US dollar at a fixed exchange rate, and obtain stable interest income. If the exchange rate falls, the local currency depreciates, then they will lose, and the size of the loss depends on the depreciation. In short, these investment institutions are betting that the local government has the ability to maintain a fixed exchange rate. Therefore, a fixed exchange rate is a necessary condition for attracting foreign investment."

Fan Wubing also had a deep understanding of this. At that time, in order to obtain more trade surpluses, Asian countries took lower exchange rates than their competitors to peg the US dollar, which was to gain competitive advantage in export products by depreciating currency. China also joined this ranks in the early 1990s, and the RMB depreciated from one dollar against two yuan before the exchange rate reform to one dollar against eight three yuan.

Under the exchange rate system of pegging to the US dollar, economies can take the ride-shaking of the depreciation of the US dollar.

However, this also hides a huge risk, that is, when the US dollar appreciates, the currency that pegs at the US dollar will also appreciate accordingly. If its economy cannot support the appreciation of the exchange rate, or is strong, then it is artificially overestimating its currency.

In fact, in the international and foreign markets, the exchange rate of the US dollar against major currencies depreciated from depreciation in 1994. As the US dollar continued to appreciate significantly, the actual effective exchange rates of major Southeast Asian currencies such as the Thai baht continued to strengthen with the US dollar, weakening their export competitiveness, and the decline in exports led to a rapid expansion of the current account deficit.

The current account is an important item for national income and expenditure. If the current account deficit is incurred, you have to borrow money to live. There are generally two ways to borrow. One is to depreciate the local currency and reduce the export cost of domestic goods, thereby increasing the export surplus, and use trade surplus to make up for the current account deficit and achieve balance of payments. Of course, the government can also implement export subsidies, such as export tax rebates, etc. to increase the surplus, but this will be restricted.

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

There is another more direct law, which is that the government uses various preferential policies and high interest rate policies to attract more foreign capital inflows, use capital account surplus to make up for the current account deficit, and achieve balance of payments. The prerequisite for policy adjustment is the opening of the capital market, that is, capital can flow in and out freely, and inflow must be greater than outflows before there will be capital account surplus.

Under the housing system, as the Thai baht exchange rate is artificially fixed, it loses the function of regulating trade differences and balance of payments. Faced with the ever-expanding current account deficit, the Thai government can actually have one choice, namely, to accelerate the pace of opening up the capital market and attract more foreign capital inflows through various preferential policies and high interest rate policies.

Focusing on the system and high interest rate policies allows speculative capital to achieve risk-free arbitrage. At this time, foreign capital, especially hot money, pours into Thailand in large quantities.

Of course, a large inflow of capital is not a bad thing, but if there is no way to lock in these capitals and serve the economic growth of this region for a longer period of time, the problem will be serious. Short-term capital is obviously more speculative capital.

"When capital begins to flow out in the short term, Thailand's economic growth rate has slowed down significantly. At this time, an expansionary monetary policy needs to be implemented to stimulate economic growth. However, in order to maintain a fixed exchange rate of the US dollar, to prevent foreign capital outflows and to curb asset price bubbles, the central bank of Thailand was forced to continue to implement a tight monetary policy, constantly tighten monetary funds, and continue to increase interest rates. Last year, Thailand's interest rate reached 13.25 percentage points, becoming the highest level in Asian countries and regions at that time." Economic experts analyzed, "Faced with such high interest rates, the pressure from the Thai government is obviously very high, and the national economy has reached the brink of collapse."

Today's first update is to be continued,)
Chapter completed!