Former Chinese official Chen Wenling has raised concerns about China’s position in a “finance war” with the United States. She warns that potential interest rate cuts by the US Federal Reserve could lead to a significant influx of money back into China, potentially causing turbulence in the domestic financial market. Chen emphasizes the need to prevent large-scale malicious speculation and protect China’s high-quality assets from being harvested by foreign investors. She also highlights the importance of Hong Kong strengthening its status as a global financial center.
Chen acknowledges that China remains at a financial disadvantage compared to the US and is constantly being contained, suppressed, and harvested. Any changes in interest rates by the Federal Reserve can have an impact on China due to the strength of the US dollar and the US’s overall economic power. Chen describes the retreat of foreign investors from China as evidence of a “finance war” and suggests that Beijing should prioritize the safety of US-listed Chinese company assets in its financial negotiations with the US.
While some US-based researchers argue that labeling the situation a “finance war” is an overstatement, there are concerns about the possibility of financial decoupling between the two economic superpowers. Measures such as restricting stock market listings of each other’s companies could contribute to this decoupling. Experts also note that Beijing is already adjusting its financial system in anticipation of potential sanctions by Washington resulting from a cross-strait conflict between mainland China and Taiwan.
Overall, the article highlights the ongoing financial tensions between China and the US, with Chen Wenling’s warning serving as a reminder of the challenges China faces in maintaining stability and protecting its assets in the face of potential US capital injections.
