The Chinese Intelligence Service has announced its intention to actively participate in protecting the financial stability of the country and carefully monitor the risks in this area. The Ministry of State Security of China expressed concern on the official WeChat channel about attempts by some countries to disrupt the financial system of China.
This statement comes after China’s President Xi Jinping stated at a financial conference that the prevention and resolution of financial risks is an ongoing priority for the government. He promised to strengthen supervision in all directions, highlighting Beijing’s concern over the fragility of the financial system amidst geopolitical upheavals, real estate problems, and growing debts of local authorities.
The Ministry also accused “some countries” of using the global financial market to undermine China, indirectly referencing the United States. The report stated that these countries view the financial market as a tool for geopolitical games, manipulating monetary power and using financial sanctions as a means to exert influence.
In response, the agency believes that Chinese state security bodies should actively participate in the creation of national security systems in economic, financial, and other areas. They should also carefully monitor and effectively prevent the risks to national security in the financial sector and address any violations that occur.
There is increasing anxiety about financial stability and growth prospects in the world’s second-largest economy due to a prolonged decline in the real estate market, capital outflows, and a slowdown in exports. Foreign investors, faced with high interest rates in the United States, are withdrawing capital from Chinese stock exchanges, leading to a drop in share prices and a devaluation of the yuan against the US dollar.
In September, capital outflows from the country reached $75 billion, the largest outflow since 2016, according to a report by Goldman Sachs.
President Xi Jinping emphasized that the prevention and resolution of financial risks is a continuous priority for the government.
KSI Maosun, a senior researcher at the Institute of National Strategy at Qinghua University, noted that Beijing suspects some cases of capital outflows and short sales may be politically motivated. This suspicion is based on conclusions drawn from an investigation into the stock market crash in 2015.
KSI added that the Ministry of State Security only intervenes in cases where a foreign conspiracy is detected, as its main role is to counter foreign intelligence and subversive activities.