SGH reports are highly valued for keeping clients and policymakers informed and well-ahead of consensus and the news cycle on the macro policy events driving global markets.

September 14, 2021
SGH Insight
To that, reports that US officials are pressing China to remove subsidies on certain industries as a prerequisite to the removal of sanctions can be discounted out of hand as a non-starter. Barring an intense escalation of pressure, that simply is not going to happen, certainly not in exchange for the removal of tariffs – even the Trump administration’s pressure could not get Beijing to move on subsidies.
Market Validation
Policy Validation

Bloomberg 9/15/21

We will implement the important agreements reached by the leaders of the two countries, Chinese Ministry of Commerce Spokeswoman Shu Jueting says in Beijing at regular press conference.

The economic and trade teams from the two sides have been in normal contact, Shu says, when asked if Presidents Xi and Biden will meet in person
When asked about reports that the U.S. is looking into Chinese subsidies, Shu says that unilateral trade protectionism isn’t in the interests of China, the U.S., or the world.
Read full report
September 08, 2021
SGH Insight
We have also heard rumors that former Defense Minister Shigeru Ishiba, who polls just behind front runner Taro Kono, another former Foreign Minister, Defense Minister, and current vaccine czar, may choose not to run.

Ishiba is relatively popular among the rank-and-file LDP members who are not members of parliament, but his group has only 17 lawmakers, which is less than the 20 supporters needed to run the race. Ishiba may announce that he will give up and throw his support to Kono.

That further boosts the likelihood that Kono, who is popular among the general electorate because of his image as a reformer, will win.

Market Validation
Policy Validation

Bloomberg 9/14/21

Kono Gains Momentum in Japan PM Race; Report Says Rival Out

Japan’s vaccine czar Taro Kono looked to be gaining momentum in the race to be the next prime minister after reports said several ministers were planning to back him and one of his expected rivals would stay out of the contest.
Former Defense Minister Shigeru Ishiba, who had been considering a run to take the top job in the Liberal Democratic Party and replace outgoing Prime Minister Yoshihide Suga, has dropped the idea and is thinking of supporting Kono, the Yomiuri newspaper reported Tuesday, citing sources close to Ishiba.
Read full report
September 03, 2021
SGH Insight
Our understanding is that John Kerry, after he arrived in Tianjin on August 31, then set up a virtual meeting with Wang. But the topic of Kerry’s conversation with Wang was not climate, but bilateral relations.

According to Chinese sources, Kerry also asked Wang to convey to Xi that Biden hopes and looks forward to holding bilateral talks with Xi in Rome.
But before the two leaders can meet, the two sides need to show some consensus on major issues.

Market Validation
Policy Validation

Bloomberg 9/10/21

The U.S. official criticized China’s linking of
transnational and bilateral matters, essentially holding hostage
any progress on areas like climate change while demanding
unrelated concessions in return.
That was clear when Biden’s climate envoy John Kerry held
talks with Chinese Foreign Minister Wang Yi last week. “China-
U.S. climate change cooperation cannot be separated from the
general environment of relations,” Wang said, according to the
ministry. “The United States should meet China halfway and take
positive actions to push relations back on track.”
Read full report
August 31, 2021
SGH Insight
Separately, President Xi Jinping discussed the US-China tech rivalry, negative list, and opening of China’s markets at a meeting in Zhongnanhai on Friday. Excerpts are included below:
“The most powerful weapon against the US all-round containment of China is to focus our efforts on our own affairs and to strive to develop our economy, high technology, and the military…. Opening up is one of the best weapons against the US to contain China…We must continue to welcome and support the development of foreign enterprises in China including US enterprises as long as do they do not become pawns of Washington against China. Relevant departments should speed up formulating and introducing the 2021 version of the national negative list for foreign investment ASAP.”
Xi added, “The competition between China and the US is fundamentally about talent and high technology…We must always adhere to the development of the industry-oriented real economy, must not learn from the US or must not be capital-oriented. A capital-oriented economy is fragile, built on bubbles and vulnerable to a single blow…
“We must ensure the stability of the financial system and eliminate any potential systemic financial risks firmly, forcefully and in a timely manner. While ensuring an average annual economic growth of five percent in the next 10 years, we must ensure high-quality and steady economic development, and we must never neglect medium – and long-term development goals for the sake of short-term economic growth.

Market Validation
Policy Validation

Bloomberg 9/8/21

The mouthpiece of China’s ruling Communist
Party has run a front-page editorial seeking to ease concern
that President Xi Jinping’s regulatory crackdown will hurt
foreign investors.
“Opening to the outside world is China’s basic national
policy, and it will not waver at any time,” the People’s Daily
said in the editorial, which was published on Wednesday under
the headline “Sticking to Regulatory Supervision While Promoting
“Unswervingly, the principles and policies of encouraging,
supporting and guiding the development of the non-public sector
of the economy have not changed!” the newspaper said, adding
that the government of the world’s second largest economy would
protect the rights of foreign investors.
The goal of the regulatory moves has been “to promote the
formation of a market environment of fair competition and better
protect consumer rights,” the editorial added, and to open an
avenue for “promoting high-quality development.”
Read full report
August 26, 2021
SGH Insight
Furthermore, our understanding is that if the Eurozone data stays roughly on expectations over the next two weeks, the ECB will most likely decide to tweak its PEPP purchases modestly downwards for the fourth quarter when the Governing Council meets next on Thursday, September 9.
Market Validation
Policy Validation

The ECB Policy Statement 9/9/21

Pandemic emergency purchase programme (PEPP)

The Governing Council will continue to conduct net asset purchases under the PEPP with a total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over.

Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council judges that favourable financing conditions can be maintained with a moderately lower pace of net asset purchases under the PEPP than in the previous two quarters.

The Governing Council will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact of the pandemic on the projected path of inflation. In addition, the flexibility of purchases over time, across asset classes and among jurisdictions will continue to support the smooth transmission of monetary policy. If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full. Equally, the envelope can be recalibrated if required to maintain favourable financing conditions to help counter the negative pandemic shock to the path of inflation.
Read full report
August 23, 2021
SGH Insight
Federal Reserve Chair Jerome Powell’s remarks will be viewed as the consensus view of the Board. Powell is slated to discuss the economic outlook and it is hard to imagine he could do so without shedding some light on the tapering discussion. Powell can firm up the view that tapering will occur in 2021 simply by reiterating the main themes of the most recent minutes and position the Board as more hawkish than the position elaborated by the most dovish members of the Board. This is my expectation.
Bottom Line: There will be a lot of tapering talk on the “virtual” sidelines at Jackson Hole. The weight of that talk will be on the hawkish side and lean toward tapering this year. Watch for that side, however, to follow Kaplan’s lead and offer additional caveats about the current Covid surge. What we are really looking for, however, is how closely Powell follows the positioning of the minutes and Clarida for evidence that the consensus on the Board is falling in line with a taper this year if Covid allows.
Market Validation
Policy Validation

Treasuries Rise as Powell Signals Taper on Course for This Year

Treasuries gained even in the wake of comments from Federal Reserve Chair Jerome Powell signaling that the central bank could begin paring its monthly bond purchases this year.
The remarks Friday at the Kansas Fed’s virtual Jackson Hole symposium kept intact the message traders already garnered from past comments by Powell and from the minutes of the central bank’s last policy meeting, in July -- that most officials judged that it probably would be appropriate to begin paring the buying in 2021.

Ten-year yields fell 2 basis points to about 1.33% and the yield curve reversed an early-session move that sent it to the flattest level in a year. The Fed is currently buying $120 billion a month in bonds, part of emergency measures introduced last year to support the economy and help markets function smoothly.

Powell said in his remarks that the economy has now met the test of “substantial further progress” toward the Fed’s inflation objective that he and his colleagues said would be a precondition for tapering the bond purchases, while the labor market has also made “clear progress.”
The yield curve, as measured by the gap between 5- to 30-year yields, was about 2 basis points steeper than Thursday’s closing levels, at about 111 basis points. The curve earlier in the session Friday touched around 107 basis points amid comments from other Fed officials that were deemed on the hawkish side in terms of pushing for a quicker start to tapering.

Read full report
August 10, 2021
SGH Insight
Second, the latest Covid wave is likely to hit Asia hard (low rates of vaccination will likely combine with the more transmittable Delta variant) and create a fresh series of supply shocks. See this, for example:

Nissan says its huge factory in Smyrna, Tennessee, will close for two weeks starting Monday due to computer chip shortages brought on by a coronavirus outbreak in Malaysia.

We are probably going to see more of these stories in the weeks ahead.
Market Validation
Policy Validation


China partly shut the world’s third-busiest
container port after a worker became infected with Covid,
threatening more damage to already fragile supply chains and
global trade as a key shopping season nears.
All inbound and outbound container services at Meishan
terminal in Ningbo-Zhoushan port were halted Wednesday until
further notice due to a “system disruption,” according to a
statement from the port. An employee tested positive for
coronavirus, the eastern Chinese city’s government said.
The closed terminal accounts for about 25% of container
cargo through the port, calculates security consultant
GardaWorld, which said “the suspension could severely impact
cargo handling and shipping.”
Read full report
August 03, 2021
SGH Insight
The Politburo’s over-arching directive for monetary policy is to ensure a balance of general money supply and social financing, to ensure the supply and price stability of bulk commodities, and to keep the country’s macro leverage ratio “basically stable.”
The meeting stressed the by now familiar, and slightly more dovish imperative that prudent monetary policy should maintain “reasonably ample” liquidity and support the continued recovery of small and medium-sized enterprises as well as stressed industries.
As to targets, sources indicate that new loans in H2 of 2021 will be guided to remain at or slightly above year-ago levels, and the People’s Bank of China will opt to use “low-profile tools” to quietly inject long-term liquidity.
The PBoC is also expected to cut the Reserve Requirement Ratio (RRR) for some financial institutions in a targeted way, but not to adjust (cut) the policy interest rate.
Market Validation
Bloomberg 8/10/21

China’s central bank fanned expectations of
further monetary policy easing, saying in its latest quarterly
report that inflation pressures are “controllable,” while
highlighting risks to the economic growth outlook.
The People’s Bank of China largely reiterated its stance of
stable policy, pledging to make it more forward-looking and
effective, while maintaining ample liquidity. The surge in
producer inflation in the first half was likely temporary, and
the domestic recovery is not yet solid, it said.
Read full report
July 16, 2021
SGH Insight
The ECB had agreed to commit to a symmetric inflation “aim” of around 2% already in 2019 under then-President Mario Draghi, even while its formal target has remained a slightly lower, and more unwieldy, “close to, but below 2%.” But the codification of this symmetric 2% goal into a formal inflation target is still significant, and indeed, ECB President Christine Lagarde proudly flagged the upcoming July 22 Governing Council as one worth watching in that it will be now incorporating the new ECB target into its forward guidance on interest rates.

In the process, Lagarde may have been perhaps raising expectations for changes to policy as well.

** On forward guidance, the Governing Council will need to change its current commitment to keeping interest rates “at their present or lower levels until we have seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 percent within our projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics” to reflect the new 2% symmetric target, and the desire to hit that target on a “sustainable” basis.

** But on a pragmatic level, rate hike expectations are already more or less flat until 2024, and so an argument can be made that the ECB commitment to keeping rates at the current -0.5% is already more than baked into markets.
Market Validation
Policy Validation

FT 7/22/21

The new guidance came two weeks after the ECB agreed a new strategy that lifted its inflation target to 2 per cent, dropped a promise to keep price rises below that level and accepted that they can even exceed it temporarily. It was the first change in strategy for almost two decades.

After the monetary policy meeting in Frankfurt, the central bank said in a statement that its revised guidance would “underline its commitment to maintain a persistently accommodative monetary policy stance to meet its inflation target”.

It said its deposit rate would not rise from minus 0.5 per cent until inflation hits 2 per cent “well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realised progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilising at 2 per cent over the medium term”.

It added: “This may also imply a transitory period in which inflation is moderately above target.”

Some ECB rate-setters have called for a reduction in the pace of bond purchases through the €1.85tn pandemic emergency purchase programme (PEPP) it launched in response to the Covid-19 crisis last year.

But in its statement on Thursday the ECB stuck to its guidance that the PEPP will last until at least March 2022 and only end once its policymakers decide that “the coronavirus crisis phase is over”.

Read full report
July 12, 2021
SGH Insight
Fedspeak picks back up a bit this week. The highlight will be Chair Jerome Powell’s Monetary Policy Report testimony at the House (Wednesday) and Senate (Thursday). I expect Powell will lean on a generally dovish story that commits to sustained policy accommodation even as he opens the door for tapering later this year.
Market Validation
Policy Validation 7/14/21

Semiannual Monetary Policy Report to the Congress
Chair Jerome H. Powell

At our June meeting, the Committee discussed the economy's progress toward our goals since we adopted our asset purchase guidance last December. While reaching the standard of "substantial further progress" is still a ways off, participants expect that progress will continue. We will continue these discussions in coming meetings. As we have said, we will provide advance notice before announcing any decision to make changes to our purchases.

Read full report
July 09, 2021
SGH Insight
The People’s Bank of China announced on Friday a cut in its Reserve Requirement Ratio (RRR) of 50 basis points for eligible financial institutions starting on July 15 to support the real economy.
As had been picked up in the press, Premier Li Keqiang at a State Council executive meeting on Wednesday called for a timely cut to the RRR for banks to support the real economy, but he also warned officials to avoid “flood-like stimulus” and to keep monetary policy stable.
After the meeting, China’s top financial officials met and decided to announce an RRR cut of 50 basis points on Friday. The message Beijing is now seeking to convey is that the move does not mean that China’s economic growth has lost momentum, and indeed one of these officials states that he is sure that China’s GDP will keep above 8% year on year in Q2.
Market Validation
Bloomberg 7/15/21

Chinese Stocks Rally, Bonds Decline as Data Allay Growth Fears

Chinese stocks advanced while bonds declined as fears of a deep economic slowdown were allayed by the latest data. The nation’s benchmark stock index rose, with materials and financial shares leading gains, while the 10-year government bond futures fell for the first time in four days. The onshore yuan advanced.
China’s markets are breathing a sigh of relief after data showed economic growth -- while slowing after a sharp V-shaped rebound -- was tracking estimates, while expectations that the People’s Bank of China would signal further easing to counter a sharp slowdown also proved unfounded.
Read full report
July 07, 2021
SGH Insight
Didi’s decision to go public in the US was made without consulting the Cyberspace Administration of China and the Ministry of Public Security and does not conform to the position of the Central government. Even if Didi continues to list in the US, its domestic business will suffer a huge contraction. As far as I know, about 20 central ministries and commissions, including the PBoC and CBIRC, have decided in the last two days to ban their staff from using Didi during official duties. If Ant group’s plans to list in Hong Kong and Shanghai were just a mistake, Didi’s IPO is [an] extremely black deed.
Market Validation
Policy Validation

Bloomberg 7/9/12

China Asks Websites, Platforms to Ban Downloads of 25 Didi Apps

China’s cyberspace regulator ordered websites and online platforms to ban downloads of 25 more Didi-related apps that have already been removed from app stores, days after asking app stores to remove the company’s Didi Chuxing app, according to a statement on the Cyberspace Administration website late Friday.

The regulator cites “serious illegal collection and use of personal information” by the apps

Read full report
June 14, 2021
SGH Insight
Altogether this argues for the dots to edge higher in 2022 and 2023 such that the median FOMC participant anticipates a rate hike in 2023. I think any reasonable forecast likely has the economy meeting the Fed’s employment and inflation objectives as early as the end of 2022 and as such it doesn’t seem particularly credible within the context of the new framework to not expect a rate hike in 2023.
Market Validation
Bloomberg 6/16/21

Treasuries Tumble, Curve Flatter as Fed Dots Show Two 2023 Hikes

Treasuries drop sharply to session lows with 10-year yields jumping back above 1.50% after Fed’s latest economic projections show two rate increases by the end of 2023. In front-end the IOER was hiked 5bp to 0.15%.

Treasury 10-year yields rose to 1.523% session highs, cheaper by 2.7bp on the day, while belly-led losses flattened 5s30s curve as low as 135.1bp, tightest levels since January.

Futures volumes over the release saw 130k 10-year note contracts trade on move down to 132-04 session lows.

Revised Fed dots show 13 officials seeing a hike by the end of 2023, while 7 officials see a hike by the end of 2022 vs 4 in March.
Read full report
June 10, 2021
SGH Insight
*** Our understanding is that at a State Council Executive Meeting held in Zhongnanhai on Wednesday morning, Beijing time, Premier Li Keqiang said that while China now imposes a 25 percent general corporate tax rate (with exemptions for a few industries such as semiconductors), which is higher than the proposed minimum global corporate tax rate, we (China) are inclined to endorse the G7’s minimum global corporate tax deal at the G20 Finance Ministers and Central Bank Governors Meeting that will be held in Venice on July 9-10th. ***

Market Validation
Policy Validation

Bloomberg 7/1/21

The U.S. has won international backing for a global minimum rate of tax as part of a wider overhaul of the rules for taxing international companies, Dow Jones reported, citing people familiar.

Key excerpts from original article:
Officials from 130 countries that met virtually agreed Thursday to the broad outlines of the overhaul, including all of the Group of 20 nations, according to one of the people familiar with the matter.

They include China and India, the large developing countries that had previously had reservations about the proposed overhaul.
Read full report
June 09, 2021
SGH Insight
...The EU and US will also commit to putting an end before July 11 to the long -standing conflict over aircraft subsidies in the Boeing-Airbus wars, and in doing so will prevent an escalation of the retaliatory measures that the EU has warned it could impose under WTO rulings should there be no deal by that date...

...The Russia Nord Stream Angle

Biden seems to have won Berlin over into a more robust stance against China in large part through bribery — by giving up on his initial promise to block the completion of the Nord Stream 2 gas pipeline that is set to provide cheap Russian gas to Germany.

Controversial in both the US and EU, the government of Chancellor Angela Merkel had been fighting tooth and nail to complete that project, over objections that the pipeline will increase Europe’s dependence on fossil fuels, on Russia for energy supplies, with all the security implications involved, and in the process weaken Ukraine as a transit country for the existing Russian gas pipeline.

China’s retaliatory measures against EU officials over criticism of its human rights, which led to the suspension of the EU-China Comprehensive Agreement on Investment in the European Parliament, did help to play into US hands – indeed, even before swearing in on January 20, 2021, the incoming Biden administration had sent informal signals to the EU in late 2020 to refrain from signing the CAI before consulting with the US.

There is some speculation now that Biden will also use the dropping of White House opposition to the Nord Stream 2 pipeline when he meets on Wednesday in Geneva with Russia’s President Vladimir Putin as a reminder of America’s clout and of potential rewards that could come to Russia through better relations with the US.

While the Nord Stream compromise might serve on the margins to soften an otherwise ice-cold bilateral relationship between Moscow and Washington, whether it does much more than that will remain to be seen.
Market Validation
Bloomberg 6/15/21

The U.S. and the European Union agreed to a five-year truce in their 17-year dispute over aircraft subsidies to Airbus SE and Boeing Co. that saw the allies impose tariffs
on $11.5 billion of each other’s exports. The European Commission spent Monday night discussing the accord with member states to get the deal over the line before
an EU-U.S. summit in Brussels with President Joe Biden, according to EU officials familiar with the deliberations. A formal announcement is expected later Tuesday.

Policy Validation

Bloomberg 6/23/21

The U.S. and Germany are discussing a range
of possibilities aimed at resolving a dispute over the Nord
Stream 2 gas pipeline and could settle their differences over
the summer, according to Foreign Minister Heiko Maas.
The U.S. considers the almost-completed link between Russia
and Germany a threat to Europe’s energy security, while Berlin
argues it’s a commercial project and won’t bolster the Kremlin’s
influence. Washington had imposed sanctions on entities and
individuals connected to the project, but most of those have
recently been waived by U.S. President Joe Biden.
Speaking after discussions with U.S. Secretary of State
Antony Blinken in Berlin, Maas suggested that talks between
Chancellor Angela Merkel and Biden in Washington on July 15
could pave the way for an agreement, which Germany is seeking by

Bloomberg 7/19/21
U.S., Germany Expected to Announce Nord Stream 2 Deal

The U.S. and Germany are expected to announce an agreement to end a dispute over Russia’s $11 billion Nord Stream 2 natural gas pipeline in the coming days, Reuters reports, citing people familiar.

A deal is near that would avert U.S. sanctions against Nord Stream 2, according to a person familiar with the negotiations

Read full report
June 07, 2021
SGH Insight
** In addition to a global minimum tax, and indeed as a condition of that agreement with the United States, the G7 also struck a deal on the even thornier issue of a cross-border digital tax, agreeing in its communique that the largest and most profitable multinational digital firms [read Google, Amazon, Facebook, Apple, Microsoft, etc.] will have to pay [some] tax in the countries where they operate, not just in their tax-based domiciles.
Market Validation
Bloomberg 6/7/21

Read full report
June 02, 2021
SGH Insight
The G7 will commit to “properly embed” climate change and biodiversity loss in economic policymaking and will use carbon pricing as a policy lever. Central banks, and supervisory agencies, are to treat risks posed by climate change as financial risks.

The G7 will agree that the global financing system needs to be “greened” to better price climate risks and will call for mandatory climate related financial disclosures from companies to help markets value shares accordingly.

To avoid many different standards around the world for what constitutes a “green” or “sustainable” investment, the G7 will pledge to work among themselves and with other international partners towards one common line.
Market Validation
Reuters 6/6/21

Group of Seven (G7) rich countries backed moves to force banks and companies to disclose their exposure to climate-related risks on Saturday, a measure seen as vital to efforts to safeguard the financial system from climate change shocks.

G7 finance ministers meeting in London also called for more coordination to measure what impact companies are having on the climate and environment, warning of the risk of fragmentation as local jurisdictions adopt different approaches.

"We support moving towards mandatory climate-related financial disclosures that provide consistent and decision-useful information for market participants...," said a final communique released after the two days of talks.

"This will help mobilise the trillions of dollars of private sector finance needed, and reinforce government policy to meet our net zero commitments," it said of a growing number of pledges by major economies to attain net-zero carbon emissions.

Read full report
May 25, 2021
SGH Insight
The meeting warned of shocks overseas, and sought to deal with imported inflation, and to enhance expectations management with well-prepared policies. We noted that much more aggressive fiscal stimulus and strong economic recovery expectations in the US have resulted in rising inflation and have boosted global asset prices, triggered more capital flows to the US from emerging markets, and increased debt risks in emerging economies. We should pay attention to the changes in monetary policy in emerging economies, which may result in a short-term impact on our financial system.
Market Validation
Bloomberg 5/29/21

Recent interest rate hikes by emerging
economies could lead to a bursting of global financial asset
bubbles, according to a senior official with China’s banking

Unprecedented pandemic easing measures by developed
countries have enlarged such bubbles, Liang Tao, vice chairman
of China Banking and Insurance Regulatory Commission, said at
the International Finance Forum in Beijing on Saturday.
Developed countries are sticking with ultra-low rates even as
emerging economies raised their borrowing costs, potentially
resulting in the re-pricing of global assets, he said.
Read full report
May 25, 2021
SGH Insight
Liu He’s Opening Comments:
The extraordinary quantitative easing and huge stimulus package of the US are creating a new round of global inflation and asset bubbles, which are likely to cause sharp turmoil in global financial markets over the rest of the year. If that is so, it will have a negative impact on China’s economic growth, as well as on the RMB (renminbi), domestic stock, and bond markets.
I therefore decided to hold the FSDC meeting [to deliver] a strong warning. The most important topic of the meeting is to strengthen risk management and prevent financial risks. We have made risk management a priority for the financial services industry and the country. It will help reduce or avoid negative outcomes while building a solid foundation for rapid and continued growth.

Market Validation
Policy validation

Bloomberg 6/11/21

China’s banking regulator and central bank issued rules Friday to strengthen supervision of cash management products of commercial banks and wealth-management companies, according to a statement on CBIRC website.
Rules cap leverage of each cash management product at 120%
Limit investment areas for cash management products to bank deposits, bond repurchase agreements, central bank bills, CDs, some money market instruments
The rules are aimed at preventing unregulated increase in the products and mounting risks, and stabilizing market expectations.
Read full report
May 24, 2021
SGH Insight
Lest there be any questions as to the seriousness of Beijing’s efforts and its intentions, a very senior official source had this to say after the ban:
There is no doubt that this time we have cracked down on encrypted virtual currency more severely than in September 2019, and the price of virtual currency will be hit even harder than last time. We must provide an absolutely safe financial environment for the pilot and promotion of the digital RMB in China [our emphasis added].
Market Validation
Bloomberg 6/5/21

Bitcoin continued its decline on Saturday
after potentially positive catalysts from El Salvador and Square
Inc. were unable to assuage investor concerns over Chinese
regulatory risks.

The world’s largest digital coin slipped to trade around
$35,220 as of 6:31 p.m. in New York, down 5.3% in the past 24
hours. The move extends its downtrend for a second day after a
cryptic tweet from Elon Musk that hinted at a potential split
with the cryptocurrency.

Weibo, a Chinese social-media service, appears to have
blocked some crypto influencer accounts on Saturday, citing
violation of unspecified laws and Weibo community rules.
Read full report