All of the information stated in this article is based on reliable sources of information and is detailed at the end of the article
Text/Editor: Look at Mr. Zhang
On April 16, Fitch, a world-renowned rating agency, downgraded the credit of six major banks in mainland China, which attracted the attention of mainland financial markets.
The reason for this situation is largely due to the Federal Reserve, which directly affects the continuous decline of the RMB exchange rate against the US dollar.
This also makes people wonder whether this adjustment is the beginning of a new round of financial war between China and the United States.
Fitch downgraded six Chinese banks
On April 16, Fitch, the world's rating agency, re-rated a large number of banks in mainland China, downgrading their creditworthiness from "stable" to "negative".
Not only banks, but even some central enterprises in the mainland are also in danger, such as the mainland's State Grid, PetroChina, Three Gorges Corporation and other large central enterprises are also among them, all given "negative" ratings.
It is indeed surprising to see such news, such an operation is simply rare in a century, after all, these enterprises have an inseparable connection with the country, and these central enterprises have always had very good credit, but this time they were downgraded.
In addition to downgrading important companies in the mainland, even private companies such as Tencent and Alibaba have not escaped and have also been downgraded.
This is increasingly puzzling, as Tencent and Alibaba are both key private enterprises in the mainland and also have a lot of influence abroad.
But this time, Fitch's rating did cause a lot of damage to the mainland, so that many investors at home and abroad did not dare to try, credit is becoming more and more important for a company, not only for the enterprise but also for the country, credit depends on whether a country has the ability to repay debts.
Of course, the higher the rating given, the better the country's economy, the more investors will be willing to invest there, on the contrary, if the country's overall credit is not good, it will also make these investors worry and the country's economy will not be able to develop.
The decline in credit rating will also lead to the withdrawal of funds from many domestic investors, or capital outflows, which are obviously not good news for a country.
However, this wave of Fitch's operations has once again attracted everyone's attention, and many people can't help but speculate that Fitch's operations must be related to the United States, could it be that a new round of financial industry between China and the United States has begun?
A new round of Sino-US financial war has begun?
With Fitch's "operation", the yuan fell below 7.28.
However, this is not a simple matter, and it has a bearing on the mainland's international status and economic development, and if it does not have sufficient credit, it will be difficult to develop the national economy, and it will not attract more investors.
So we will remain somewhat skeptical of Fitch's actions.
You must know that the mainland's economic strength has been on an upward trend in recent years, especially in the past two years, which has not only played an important role in the global economy, but also the mainland's gross domestic product has been rising, far higher than expected.
However, the mainland's contribution to the global economy is obviously not as serious as that of Fitch, so many people think that Fitch's operation is that the United States is just that.
Although there is not enough evidence, the mainland will certainly not accept such an outcome, and it is possible that this will also be the beginning of a new round of financial war between China and the United States.
Since China has gradually gained a firm foothold in the world, the United States has regarded China as a "thorn in the side", especially in recent years, the mainland has made huge breakthroughs in various fields, and even some science and technology have become the leading bosses.
This also makes the United States even more disgusted with China, of course, using credit to exert pressure on China, such an operation is not a day or two, and the mainland has long been accustomed to it.
Fitch's operation is too obvious this time, and it will indeed have a certain impact on China, and it will also be a good test of China's resilience, and I believe that China will find a solution in a short time.
The renminbi fell below 7.28 against the dollar
Fitch, a world-renowned rating agency, downgraded the credit ratings of the mainland's six major banks, causing the recent RMB exchange rate to fall below the 7.28 mark against the US dollar in an instant.
According to the data, the current exchange rate of the RMB against the US dollar is about 7.1028, a decrease of 49 basis points from the previous trading day, which shows that the current situation is very serious.
In the first quarter of 2024, the mainland's GDP continued to grow, and the outlook was bright, until the mainland's growth rate reached 0.7% in March, which was far more than expected.
However, the mainland's excellent performance has caused the US financial market to collapse, and the three major stock indexes in the United States have continued to fall and soon fell to the bottom, which shows that this financial phenomenon is very difficult for the United States.
At present, US stocks have been in a downward state, but this situation is not a good result for the financial market of the mainland, which is also facing very large risks.
If the Fed continues to adhere to the strategy of not cutting interest rates, then the US dollar will remain quite stable internationally, thereby consolidating the country's position, but for the mainland, this will have an impact on the exchange rate of many domestic banks.
Judging from the mainland's statistics alone, the mainland's GDP has continued to rise, and its performance is even better than we expected, which also shows that the mainland's economic development is very stable and has not been interfered too much by the United States.
Based on the current gross domestic product, the mainland will grow by 5.3 percent in March over the same period and 1.6 percent more than before, which also lays a solid foundation for the whole year.
end
As the saying goes, the best way is to attack, and in this financial battle, since the United States has taken the offensive, then the mainland will inevitably counterattack.
In recent years, the development of the United States has not been particularly smooth, but the United States still has the leading power in the world, and its economic strength is not lost to any other country.
However, the United States does not have a great advantage in this financial battle, the attractiveness of American debt is not as good as before, and many countries are reluctant to buy American Treasury bonds, which also makes the United States feel tremendous pressure.
If the Treasury bonds cannot be sold, the US economy will be affected, so the only way to suppress China is to use rating agencies to make Chinese companies lose credit.
However, in the face of this kind of "financial war", we must remain vigilant, so as to better maintain the stability of China's financial market and even the world's financial market.
References
China Economic Net - "The central parity of the RMB exchange rate against the US dollar was adjusted and depreciated below the 7.1 mark yesterday"
Opinion.com - Fitch downgrades six Chinese state-owned banks to negative outlook
Sputnik News Agency - "Fitch downgrades outlook of 6 Chinese state-owned banks to 'negative'"