Recently, the China Securities Regulatory Commission (CSRC) claimed that it “focuses on strengthening the capital market investment infrastructure, enhancing wealth management functions, promoting the transformation of residents’ savings into investments, and vigorously developing equity-type public funds to help expand domestic demand.”
As we all know, China households are keen savers. Statistics shows that as of the end of the first quarter of 2020, the balance of the Communist China household savings amounted to 87.8 trillion yuan, which is a per capita saving of 627,000 yuan, one of the highest in the world. Is this figure really that high? It may be due to a weak social security system, high education costs of children, in adequate healthcare and pension system. There figure is a lot higher when compared to other developed countries.
The CSRC hopes that more savings will be converted to the capital market. The China Banking Regulatory Commission (CBRC) expect residents to convert more of their savings into various bank wealth management products, in addition to buying a house. Whether or not household savings translate into investment is a market-oriented act, but it is clearly encouraged by the CSRC. What does that mean?
What is an equity public fund? It refers to a public fund that enjoys shareholders’ equity and returns from stocks. Investors buy into such funds, investing their assets in a company’s stock, so that investors can get the return as owners. In short, the returns that ordinary people receive from investing in equity public funds depend mainly on the returns of stocks or bond markets. The difference between this and your own direct investment in the stock market is that you give the money to an intermediary fund company, which reinvests it in the stock market, in other word you enter the market indirectly.
At first glance, it seems less risky for ordinary people to invest their money indirectly rather than directly in capital markets as fund companies are more professional and have a higher ability to control risk. However, we know too well China’s retail stock market under the China Communist Party (CCP) has never veered away from losing money, whether in bull or bear market. Who profits in the end? Is it the fund companies?
Through the whistleblower movement, we come to know the capital market under the CCP is manipulated entirely by thieving political elite families. In the 2015 stock market disaster, the family of a former premier profited as much as 700 billion yuan, how much of which is the hard-earned money of common folks? How many of them get rich from the capital market? The common people are akin to lawn which are being trimmed (off the fruit of their labout) repeatedly. The people’s wealth are stolen and transferred to hidden pockets of greedy political elite families and their puppet fronts.
It is no exception this time. The CCP’s propped up economy cannot continue forever. It is attempting a final wealth theft at common folks’ money from the banks into the capital market, to be transferred (stolen) elsewhere.
Lude Media has pointed out over the past two days that U.S. sanctions against Chinese banks are about to begin, running the risk of withdrawal shutdown. For those followers of the Whistle blower movement, we knew early on “to cash out and remit away (overseas)”, time is running out for the rest of common people. We pray and hope for the best outcome for those folks.
Disclaimer: The views expressed here are those of the authors and do not necessarily reflect the views of GNEWS.org.