Published: Tuesday 26th January 2016 14:00 HKT
Updated: Wednesday 27th January 2016 19:30
Maybe it’s the run up to Chinese New Year, when everyone’s fraught from scrambling for cash to keep up appearances at the family reunion, but according to the Chinese government, the Chinese people are a bit fragile at the moment.
We’ve all been there. It starts with a few innocent jibes, “Your mama ate too many dumplings”, “Your mama’s from Dongguan” etc., until it escalates to accusations of “short selling, and colluding with foreign forces”.
The Chinese government seems particularly upset with comments by George Soros at the 2016 Davos World Economic Forum, in which he said China “can’t avoid a hard landing”.
Criticising human rights is one thing, but hey, don’t question the economy.
Cue a slew of articles warning speculators shorting China, some taking aim at Soros. This Xinhua commentary on January 23rd warns “reckless speculations and vicious shorting will face higher trading costs and possibly severe legal consequences.”
Yesterday another Xinhua headline reads “Soros will pay a painful price for shorting China”.
Then in today’s People’s Daily Overseas Edition, widely circulated in Chinese media, “Declaring war on China’s currency? Ha ha”.
Here’s the opening salvo from the party mouthpiece:
“Over the last two years, George Soros, known as the “financial crocodile”, has attracted most attention at the Davos World Economic Forum. At last year’s Davos he announced his “retirement for good”, no longer investing in financial markets, instead focusing on “political charity”. Yet at the same forum this year, he openly “declares war” on China, claiming that he’s already shorted Asian currencies. Given his influence, this increases volatility in already unstable financial markets.
But, Soros will fail in his war on the RMB and HKD, of this there can be no doubt.”
The commentary then seeks to place China’s situation in a global context. After all, 6.9% GDP growth for the world’s second largest economy is still a strong performance.
“Despite China’s economic growth slowing last year, stockmarket volatility, and renminbi depreciation against the dollar, China still compares favourably with other large economies. Last year, China’s economy grew twice as fast as the United States. Although Chinese exports fell 1.8% last year, global trade over the same period fell 10%.”
Like previous articles, the author draws parallels with the Asian currency crisis in the 1990s, except saying this time it’s different. This time China has “forged deep financial links in East Asia”, as well as the “one belt one road” initiative.
Maybe it’s just too troublesome to abduct an 85 year old billionaire and force a confession on state television, so instead it’s trial by media. Even down to the choice of pictures…
Listed in FT Alphavilles’s further reading section: http://ftalphaville.ft.com/2016/01/27/2151255/further-reading-1934/
& in FT Alphavilles post “The Plaza Accord, then and *cough* now?”: http://ftalphaville.ft.com/2016/01/27/2151269/the-plaza-accord-then-and-cough-now/
Translation used 8 hours later in this Zerohedge post: http://www.zerohedge.com/news/2016-01-26/china-warns-soros-against-starting-fx-war-ha-ha-you-cannot-possibly-succeed
In The Sinocism China Newsletter 01.26.16: https://sinocism.com/?p=11603
Covered later by the FT: http://app.ft.com/cms/s/ebabbebe-c40d-11e5-993a-d18bf6826744.html
Day after Xinhua publishes full translation: http://en.people.cn/n3/2016/0127/c98649-9010063.html