The first question: 1997 The Asian financial turmoil began in Thailand. Foreign hot money (US dollars) poured into Thailand, and the Thai baht was madly exchanged, which led to a sharp appreciation of the Thai baht. Once the Thai baht appreciates to a certain high level, foreign hot money will begin to earn the exchange difference between the Thai baht and the US dollar. At the same time, Thailand is also a pilot country for foreign hot money selection. After seeing the successful operation in Thailand, I began to use the same method in other Asian countries, including China. At that time, Asian countries were entering the crazy development period before 1997 and needed a lot of money, which created the soil for foreign hot money. When the exchange rates of currencies of various countries reach a higher level, they begin to withdraw funds at the fastest speed, convert their own currencies into dollars, and a large number of foreign capitals withdraw, which directly leads to the depreciation of currencies of various countries. The way to prevent devaluation is to use foreign exchange reserves. When the foreign exchange reserves are insufficient, they just devalue their currencies directly to reduce the losses of the country, but it is too late, which directly leads to soaring domestic prices, inflation, government bankruptcy, national chaos, and extremely slow or even stagnation of economic development. China did not have major problems in the Asian financial turmoil, mainly because China had sufficient foreign exchange reserves, which was the most important reason, because China was in a period of high development at that time. If the currency depreciates, prices will soar and social unrest will be dozens of times more serious than Thailand. At that time, China had already taken over the return of Hong Kong, and such a thing was not allowed. Once the currency depreciates, China's economy will go backwards for more than 20 years, and return to the level in the early days of reform and opening up.

Secondly, China's abundant foreign exchange reserves are mainly used to help stabilize the Hong Kong dollar, in addition to ensuring that its currency will not depreciate. During the financial crisis, the central government used at least nearly $30 billion to help the Hong Kong government stabilize the Hang Seng Index. Its main function is to let the Hong Kong government have enough funds to absorb the Hong Kong dollars sold by international speculators, so as to avoid the collapse of the Hang Seng Index and let the Hong Kong government stabilize the Hang Seng Index. In the whole Asian financial crisis, the only thing that resisted the attack of foreign hot money (Soros) without economic collapse was Hong Kong after the reunification, which retained the achievements of Hong Kong's development for decades. At that time, Soros mobilized world public opinion (including Hong Kong public opinion) and lashed out at the Hong Kong government for "administrative intervention in the market", which violated the rules of the market economy. If the then Hong Kong SAR government and the central government gave in to the pressure of world public opinion and did not use macro-control to intervene in the market, it would be a catastrophe. (This move is commonly known as the Hong Kong dollar defense war)

In fact, another important reason why China was able to stabilize during the Asian financial turmoil was that China's capital market was not open to foreign investment at that time. Until today, there is a strict foreign investment access system. In other words, if you come in and come in at will, the central authorities will take it in, but if you want to take it away suddenly, it won't work. You must take it part by part within a certain period of time according to my system, so as not to have a huge impact on the capital market of China.