Why Does QFII Relax Frequently?

According to the central bank's disclosure, the quota of qualified foreign institutional investor (RQFII) in Singapore has been extended to 100 billion yuan by the State Council's approval.

Since then, 13 countries and regions have obtained RQFII pilot qualification, with a total quota of 10600 billion yuan.

According to statistics, the total amount of QFII and RQFII approved by the foreign exchange bureau reached 78 billion 971 million US dollars and 419 billion 525 million yuan respectively.

In May 2010, the Sino US strategic and economic dialogue reached a series of consensus, one of which was to allow qualified foreign institutional investors (QFII) to invest in stock index futures.

Over the past few years, China's QFII and RQFII quota has been expanding. Since the fourth quarter of this year, the floating profit of QFII has reached 12 billion yuan.

Relaxing QFII and RQFII will bring orderly trading to the stock market, which is impossible.

If the supervision of our relevant institutions is not in place and the manipulation of overseas institutional investors is not controlled, the final result will be pessimistic.

December 1986, Taiwan

After 25 years, it rose to 1000.

In February 1990, it reached 12495 points.

In that crazy era, Cathay Pacific Life Insurance Company in Taiwan, which is a small life-insurance company, has a market value of 23 billion dollars. What is the concept? It means that its market value is almost the same as that of the 14 life-insurance company in the United States plus Antai insurance group and Campbell insurance group.

Taiwan Province, which is almost the same size as Hainan Island, has been able to create Cathay Pacific Life with such a high market value.

There is also a bank called China International Commercial Bank. In such a small province of Taiwan, the total market capitalization at the end of 1989 was as high as 21 billion dollars, equivalent to the sum of the market value of the five major quality banks of America, Morgan chase, Bank of America, first bank company, Wells Fargo Bank and Wachovia bank.

Can you believe it? What a serious bubble it is!

Of course, many of us have to ask how this bubble came.

According to the media reports in Taiwan, all the reasons are strikingly similar to the financial market environment we have had in recent years.

It includes excess liquidity and deteriorating investment environment.

What is called excess liquidity? Taiwan's economy is standard export oriented, earning a large amount of US dollar foreign exchange through exports. Just like mainland China, Taiwan enterprises have to pay the "central bank" after earning US dollars, and the central bank issues equal or equal NT dollars to Taiwan enterprises.

So you see, creating so many dollars in foreign exchange eventually leads to excess liquidity.

It is also the two time the United States has listed Taiwan, China as a "currency manipulator", threatening to use the "super 301 clause" to impose high tariffs on all products exported to Taiwan by the United States.

The Taiwan authorities succumbed and feared, so slowly raising the exchange rate.

The result of the rapid appreciation of the Taiwan dollar resulted in the influx of hot money. What happened after the hot money poured into it? Speculation and speculation.

Let us recall that in April 2010, 15 of the United States intended to include China in the "currency manipulator". After that, it said that the market was postponed for three months.

The result of appreciation is like Taiwan.

The chaotic influx aggravated the economy.

And where did this excess liquidity go? Like Taiwan, it was speculation and speculation.

In February 1990, the stock market in Taiwan was as high as 12495 points, but in October 6th of that year, it suddenly fell to the bottom, that is, 2560 points. Taiwan's real economy suffered a serious blow.

At this point, you can guess how the Taiwan authorities handled the crisis, allowing foreign capital to enter China's Taiwan through QFII and manipulate stock index futures.

Taiwan opened its QFII when its share price dropped to its lowest point. The result of the opening was that the stock value immediately rose and then fell.

How did it go down? In January 16, 1993, it continued to relax the QFII. After the quota was relaxed, the stock value rose again, rising and falling, and the result continued to relax.

By April 1994, the amount of investment was raised to $7 billion, and the total amount of restrictions was lifted in 1995. But after the high point, the two relaxation did not keep the share price rising, but fell again.

In the March 1999, Taiwan authorities adjusted the proportion of QFII and total shareholding to 50%, and foreign capital could control listed companies absolutely.

Then, the stock value went up, and then fell back again. At that time, the people of Taiwan could not afford to carry it.

The authorities decided to intervene in the market, hoping to raise the value of the stock, which was backed by the national security fund, which was the reverse operation at that time.

As a result, the national security fund was strongly suppressed by Wall Street investors during the delivery period. Less than a day later, the national security fund lost nearly NT $900 million.

The whole market to this stage has been completely manipulated by foreign capital. If you want to serve the market, then you can earn it again.

When you put the shareholding ratio, including a single percentage of shares, to 50%, there is no hope.

The entire Taiwan stock market has been manipulated by foreign capital, and even after the Taiwan authorities pushed the stock market through the so-called national security fund, it was also invested by Wall Street, a foreign investment organization, and the stock value went down again.

Through the historical experience of Taiwan, we find that once the stock market is controlled by foreign capital, there is no hope at all.

What is the biggest problem now? Many people do not know the truth of China's Taiwan. Instead, they think that QFII represents the best international operation and the most advanced technology. It is also considered that opening up QFII can fundamentally improve the level of China's financial institutions.

In other words, we hope to "market for technology".

Do you know who is actively promoting QFII? Gao Xi Qing, it seems that many people like it.

In May 2000, he said he would actively study QFII. He suggested allowing foreign investment to enter.

In October 2001, Hu Ruyin of the SSE Research Center said that the QFII system like Taiwan could be gradually liberalized.

Also, Hu said that the so-called mature investment philosophy like foreign investment institutions will change the short-term operation of our A shares, because the institutional investors in Wall Street are long-term holdings and long-term investments.

I really disagree with him.

As we all know, investors in Wall Street will hold long term because the SFC is very strict.

For example, the SFC believes that as long as the company has good news announcing that the stock price is going up, all the pactions that drive the stock price to rise will be called insider trading.

Let's take a look at the Chinese stock market. In November 2005, there were 28 trading accounts in QFII, 8 of which averaged 1 million to 5 million of pactions, 9 from 5 million to 10 million, 6 from 10 million to 50 million, and the proportion of active accounts in Shanghai accounts for 82%.

This data is the highest among all investment groups in that month.

What does this prove? It proves that QFII accounts are short pactions frequently, and our CSRC has not caught these pactions.