It will soon be the 25th anniversary of Hong Kong's return to the motherland. Over the past 25 years, the mainland has spared no effort in maintaining Hong Kong's prosperity and stability. With the strong support of the central government, Hong Kong has successfully resisted the Asian financial crisis, SARS, and the new crown epidemic, and the international Impacts such as the financial crisis have maintained and consolidated Hong Kong's status as an international financial and shipping trade center, but the most unforgettable one was the financial battle to stop Soros from shorting Hong Kong.
Who is Soros? It is still necessary to introduce here that Soros was born in a Jewish family in Hungary. He showed extremely keen investment talent when he was young. In 1973, he founded Quantum Fund Company with Rogers in 1973, and subsequently made many large investments. Accurate predictions quickly accumulated a large amount of financial capital. In 1992, 12 EU member states signed the " Maastricht Treaty". However, the differences in economic strength and conflicts of economic interests between various countries make it difficult to maintain the stability of the exchange rate system. Ross took advantage of this loophole to sell a large number of pounds in the market, which eventually led to the sharp depreciation of the pound against the mark and made huge profits. In one fell swoop, Ross became the top income earner on Wall Street.
In 1997, Soros set his sights on Southeast Asia. After successfully plundering billions of dollars in wealth from Southeast Asian countries, he reached out to the Oriental Pearl of his motherland, Hong Kong. Hong Kong has always implemented a linked exchange rate system to the U.S. dollar. This system means that the amount of currency issued requires corresponding U.S. dollar foreign exchange reserves to support it, which requires high stability for economic growth. In the first few years after Hong Kong returned to , Hong Kong's real estate market had accumulated a large number of bubbles, and price levels and the stock market had also risen sharply. The overheating of the economy had caused a depreciation trend in the Hong Kong dollar, which allowed Soros to see an opportunity.
Starting from mid-July, hedge fund launched a continuous attack on the Hong Kong dollar for more than ten months, launching a comprehensive three-dimensional attack on the Hong Kong dollar from three directions: the stock market, the futures market and the foreign exchange market. During this period, Soros failed to succeed due to the strong obstruction of Hong Kong SAR government . However, by August 1998, the situation changed. As the U.S. stock market plummeted and the Japanese yen exchange rate plummeted, the sentiment of short selling Hong Kong dollars in the foreign exchange market became increasingly high. Various rumors spread, and market confidence was in jeopardy. Soros led the way. Hedge funds once again launched a fierce attack on the Hong Kong dollar. In just a few days, the Hong Kong stock market and the Hang Seng Index began to plummet. By August 14, it fell to around 6,500 points, setting a new low in five years. The Hong Kong economy is facing Danger of total collapse. At this critical juncture, the central government promptly voiced its support for Hong Kong, prompting the management of the Hong Kong government to make up its mind to fight against the odds and decisively use the 96 billion exchange fund and land fund to launch a strong counterattack. Finally, it won in one fell swoop and the Hong Kong dollar exchange rate returned to stability.
After this battle, all of us should firmly believe that no matter what risks and challenges Hong Kong may encounter in the future, with the backing of the motherland, no difficulties will be enough to fear, and Hong Kong’s future will surely get better and better. .
