HK spree appalled Peking
`IoS' probe reveals that government raid on shares was unsanctioned
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.ZHU RONGJI, China's premier and economic tsar, was appalled by the Hong Kong government's unprecedented plunge into its stock market last August, according to sources in the former colony close to the Peking government.
The plunge left the Hong Kong authorities owning around 10 per cent of all blue-chip shares. Until now it has been generally assumed that Peking gave full backing to the market intervention. However, the Chinese leadership was not only very uneasy about the actions taken but fearful that Peking would have to foot the bill if the share-buying spree caused a collapse of confidence in the former colony.
On being told of the Hong Kong government's decision to intervene in the stock and futures markets, as part of a ploy to prevent speculation in the local currency, a furious Mr Zhu said: "If I did that, I would have lost my job."
China's real views about the biggest single government stock market intervention in history came to light during a two-month investigation by The Independent on Sunday, which reveals that the Hong Kong government was driven by panic when it plunged into the equity markets, spending more than pounds 9.6bn in two weeks.
After the spree was over, it started a disinformation campaign to cover its tracks and muster support for its actions.
Two of the three senior officials responsible for going into the markets - Joseph Yam, head of the Hong Kong Monetary Authority, and Sir Donald Tsang, the financial secretary - have repeatedly alleged that Hong Kong was facing an organised conspiracy by foreign speculators determined to profit by forcing a currency devaluation.
Mr Yam, in particular, put pressure on the watchdog Securities and Futures Commission to come up with evidence of a conspiracy and market manipulation. The SFC identified considerable speculative activity in the market but came up with no evidence of wrong-doing or manipulative practices that broke the rules.
Moreover, the SFC found that just under half the speculative activity was coming from local sources as opposed to big-league foreign players. The SFC's report on this matter never saw the light of day.
On 28 August, the day the government pushed stock market turnover to a record HK$79bn (pounds 6.3bn), its share buying was so intense that it had no limit and greatly exceeded the amount the government thought it would have to spend.
It has now established a com- pany to manage its share portfolio and is holding a merchant bank "beauty contest" as it seeks advisers to help dispose of its holdings.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments