According to information from the Hong Kong Stock Exchange, Hong Kong’s richest man, Li Ka-shing, sold 83 million shares in the Postal Savings Bank of China. His shares fell below 11%. If calculated according to the closing price on October 3 of 52 cents a share the total amount withdrawn by Li will amount to $43.31 million, which has attracted the attention of investors.
Mike Sun, an expert on investment strategy in North America, believes that Li sold his stake in Postal Savings Bank of China for two reasons: First, instability of the real estate market and increasing banking risks. Second, the asset value of Postal Savings Bank is relatively low compared to other commercial banks.
He said to Sound of Hope that Li is selling shares at this time because: First, after the 20th National Congress, China’s economic development prospects will not be optimistic; Second, the Fed raised interest rates sharply and the yuan depreciated.
Forbes magazine pointed out that China’s financial crisis is getting worse and worse, and this is the follow-up to the crisis of real estate mogul Evergrande Group from over a year ago.
The report mentioned that, a year ago Evergrande declared it could not pay an additional $300 billion in liabilities, then declared bankruptcy. This led to the loss at lending financial institutions and a domino effect.
In the wake of the Evergrande crisis, the Chinese Communist Party did not seem to understand what was to come. It refused to take urgent or far-reaching action to stem the widespread failure of China’s financial sector.
According to the report, after Evergrande Group declared bankruptcy, if the CCP had taken immediate action, much of the economic loss could have been avoided.
For example, if the regime lent money to others in the financial system to mitigate the damage they faced from property developers failing, they would have helped restore confidence and ensure that loans would continue to drive business growth. Or the People’s Bank of China (PBOC) could have increase the loanable cash flow into the system. However, the CCP failed to act, so financial failure and the fear of that failure spread throughout China’s financial system.
The report warned that China’s unfinished construction storm is still spreading. China’s steel industry has been hit hard, because once property developers halt construction because of a lack of credit, it will lead to about 29% of steel enterprises nearing the verge of bankruptcy.
The Forbes report also pointed out that many people blame the weakness of the Chinese economy on the CCP’s draconian lockdown and control of the pandemic. However, the financial crisis, which has been underestimated by the regime and the Western media, has had a huge impact.
Sadly, there is no indication that the CCP is fully aware of this need. So far, the Politburo of China’s Central Committee has maintained that local and provincial governments take the lead in dealing with fiscal pressures, and such denial of responsibility and lack of action is not good for the Chinese economy.