China market update for Defi Degens:
China is an emerging narrative on Crypto Twitter right now. The Chinese economy is booming after opening up from lockdowns, and the government is injecting liquidity into the economy to boost consumption. China’s broad money (M2) increased 12.6% YoY in January, and this liquidity is making its way to crypto. As Justin Sun sees it, the next bull run in crypto will be led by China: https://twitter.com/justinsuntron/status/1619746238005649409?s=20&t=JSwhzF7uLNWIJLlH0vIIUA
The best resource for Chinese monetary policy updates is direct from the Central Bank’s reports, but these are in Mandarin and inaccessible to most Westerners. Also, much of the alpha is hidden in WeChat or Chinese Crypto Twitter, which is also all in Mandarin. In these medium articles, I will share the key updates for Defi Degens who want to stay up to date on the narrative.
Mandarin is one of my favourite languages, and I have been looking for an excuse to practice my business Chinese, so I will be translating and summarising the key info from Chinese Central Bank reports and WeChat alpha and sharing it here.
Key info on emerging narrative:
China Policy:
China’s economy is booming after opening up from Covid lockdowns. The government wants to boost consumption to achieve its goal of 5.5% GDP growth in 2023, following a sluggish 3% growth in 2022. To do this, it is pumping the economy with liquidity. This is primarily achieved through reverse repos, injecting liquidity throughout last week, peaking at a 487bn RMB injection on Feb 16th, keeping the 7 day reverse repo rate at 2%. They also added 499bn RMB medium term loans to banks on Feb 15th, with 1 year maturity and an interest rate of 2.75%.
This trend has continued throughout this week, with 500bn RMB being injected through reverse repos as of Tuesday 21st, keeping the 7 day rate at 2%.
Source is direct from Chinese Central Bank reports found here:
Hong Kong:
Hong Kong recently announced they will be bringing regulatory clarity to crypto trading in June 2023, with the goal of embracing financial innovation. Individual investors will be able to trade large cryptocurrencies on regulated exchanges, including BTC, ETH and other large cap coins.
The government speech announcing this is here: https://www.info.gov.hk/gia/general/202301/09/P2023010900250.htm
SFC added further details on Feb 20th here:
https://apps.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=23PR5
Who am I?
I am a fellow Defi Degen from the UK, but love languages and Chinese is one of my favourites. I’m taking my Masters of Data Science at Tsinghua University, the top university in China, so I have a strong understanding of the language and culture.
I have been looking for an excuse to practice by business Chinese, so I will be translating and summarising the key info from Chinese Central Bank reports and WeChat alpha and sharing it here.
