China’s financial battle with US may lead to capital crisis.

TLDR:

• Former Chinese official warns of potential risks to China from US interest rate changes
• US-China financial competition may lead to capital conundrum for China

A former Chinese official, Chen Wenling, has issued a warning about the potential impact of US interest rate cuts on China’s financial markets. Chen, who previously worked for the State Council, highlighted the risks of large-scale capital injections from the US causing turmoil in China’s stock market. She described the current situation as a “finance war” where China is at a disadvantage and vulnerable to manipulation by foreign investors. While she expects a boost in China’s capital market this year, she emphasized the need for vigilance and caution in the face of increasing competition with the US.

The warning comes as tensions between the two economic superpowers continue to escalate, with concerns about potential decoupling and financial sanctions. Despite differing opinions on the severity of the situation, it is clear that both the US and China are preparing for potential disruptions in their financial systems. The article also touches on the implications of the US presidential election on Chinese firms listed in US markets and underscores the importance of safeguarding assets amid the ongoing financial wrangling.