Why Financial Markets Restrict Free Convertibility?

In fact, the government's idea is to protect its trade, industry and commerce, and assets, and to guard against international financial risks, which is a protective practice.

In the capital market, if free convertibility of capital and financial items is liberalized, it will have a significant impact on investment and securities and finance.

If RMB can be used more freely and move more freely, there are two kinds of results. One is that more offshore funds will flow into the country, and the other is that more funds will flow out, and the two will have an accelerated process compared with the current regulation.

In this way, domestic bubbles will be impacted, and the capital will flow out due to the weakening of capital controls, while the undervalued ones will attract capital to enter.

For example, stocks, maybe domestic investors will see that foreign markets have more investment attraction, such as foreign stock market, P / E is far less than A shares.

This is so high that a lot of foreign listed companies can make money and have high dividend returns. The current domestic investors see that they will be "jealous", which is just for the domestic abundant capital.

Therefore, the opening of the RMB convertibility valve will destroy many domestic bubbles.

So in the stock market, blindly catch up with those.

How risky is the low return investment variety, which requires investors to have enough vigilance.

Free convertibility is the direction of China's enterprises.

This is also the inevitable course for China to let the RMB go international.

However, this process will not be opened directly and immediately. Zhou Xiaochuan also said that it would be managed freely convertible.

So there may be an excessive time, but there is no doubt that the trend is still obvious.

Another question will be placed in front of investors. Which is faster than the time when the stock is allowed to be freely convertible? In the view of Jiaxing Reed financial manager, I am afraid the latter will come sooner.

When you get paid, the renminbi you get is the same -- from design to purchasing power.

But when we want the money to "lay eggs" and make different investment choices, "the renminbi" has its own destinies.

Don't follow the wind blindly. It's very unwise to hear where to make money when you say where to make more money.

Therefore, Jiefong Reed financial planner suggests that investors should pay attention to the risk of local investment, especially the stock investment risk of a stock market with certain bubbles.

If you seek to be safe, you can configure some financial products with fixed income for about 1 years, such as Yisheng fortune, Yisheng Bao, or some bank financial products with a yield of nine point six percent. The yield is about 4.5%, the yield is stable, and there is no need to worry about the bubble burst. These are all operational options.