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February 03, 2020 It was expected and it happened. At the reopening of the markets, after the very long pause of the lunar new year, the Chinese stock exchanges collapsed: the Shanghai composite index suffered in the first few hours a thud of 8.73%, burning 259.83 points, sliding down to 2,716 , 70 and at lows since February 2019, while Shenzhen lost 9%, leaving 158.02 points on the stock exchange floor, at 1,598.80.The uncertainty about the duration of the coronavirus epidemic and the impact it will have on the Chinese economy has settled on the diffidence towards the Chinese political authorities for how they have not been able to manage the initial stages of the epidemic.
The announcement yesterday by the Chinese central bank of a maxi injection of liquidity on the markets for 1,200 billion yuan (154 billion euros) did not have the expected effects. The yuan weakens against the dollar and breaks through 7, to 7.0049 (+ 0.99%) on onshore markets, while on offshore markets it stands at 7.0054 (+ 0.07%). The Chinese central bank set the bilateral parity at 6.9249 this morning, weakening the renminbi by 373 basis points.