Focus of Today: Can no one escape the fate of being harvested? Insider reveals the truth about Chinese stocks; Making nearly 8 billion without research? Chinese chip company accused of being an empty shell; Audience in Shanghai’s performance of “Les Misérables” sings protest songs in unison.
Everyone knows that China’s stock market is not normal. Currently, Chinese stocks have been fluctuating around 3,000 points for a long time. This is because under the manipulation of certain individuals, the wealth of the majority of Chinese stockholders is being harvested. So, how did China’s A-shares head towards collapse? Let’s see what insiders have to say.
Bu Qingsong, a former stock analyst in Shanghai who has been in the securities industry for many years, shared his story as a stock analyst in Shanghai during an interview with Epoch Times, analyzing in-depth the process of the mainland’s A-shares heading towards collapse.
Bu Qingsong, 38 years old this year, graduated from a university in Anhui with a bachelor’s degree. After graduating from university in 2009, he started working at Shanghai Guoxin Securities. Over the next decade or so, he worked as an investment analyst, mainly analyzing the trends of A-shares.
In 2015, the Chinese stock market briefly broke through 6,000 points before plummeting, an event known as the “2015 stock market crash.” Since then, the Chinese stock market has been stagnant, hovering around 3,000 points.
Bu Qingsong mentioned that before 2015, despite the stock market seeing ups and downs, he remained hopeful. After all, the Chinese stock market started late, and although not healthy, there was still hope for the future. However, after 2015, he felt especially disappointed. By then, China had become the world’s second-largest economy, but the stock market was still hovering around 3,000 points. This indicated that it was not an issue with the stock market itself but had deeper underlying reasons. Since then, he has often pondered why A-shares are constantly hovering around 3,000 points. Why are 99% of retail investors and institutions incurring losses in A-shares?
Bu Qingsong explained that only now has he found a clear answer. He said there are four reasons:
1. Corruption: Almost all the money has been siphoned off by regulatory authorities, with the primary market harvesting the secondary market. The primary market is controlled by the Party and the government. For a company to list, they have to allocate some original shares to these individuals, which are worth only a yuan or even cheaper. Once listed, they can increase ten or twenty times, even good companies get overleveraged. Additionally, Chinese companies going public follow an approval system, with the qualifications examined by the Securities Regulatory Commission’s review committee, an entity with excessive power, leading to systemic corruption.
2. Imperfections in the Chinese stock market mechanism, with rampant shady dealings. People in power can short sell, but retail investors cannot, and they are harvested particularly severely. From this, it is evident that this is an unequal market.
3. Over-issuance of stocks. In the past, there were only 1,000 to 2,000 A-share listed companies, which was relatively normal. However, in recent years, the number of A-share listed companies has reached 6,000, with no other country in the world having as many listed companies, continually going public and raising money.
4. The top echelons of the CCP view the stock market merely as a place to make money, never considering doing things seriously. Policies change frequently. The middle levels, like institutions and capital from industries, also do not want to do things properly, preferring to go public to raise money and then transfer it out. Hence, the A-shares market has become a default speculation market. Regardless of the upper, middle, or lower levels, the situation is the same.
In this situation, a large amount of stockholders’ wealth is being harvested, so suicide cases are particularly prevalent when the bull market falls.
Regarding Hong Kong stocks, Bu Qingsong is also not optimistic. He said that after Hong Kong was taken back, governance deteriorated. Currently, Hong Kong has been completely assimilated into A-shares, becoming a vassal of A-shares, and the future trends will be very similar to A-shares, where legal and transparent funds will definitely be withdrawn.
Bu Qingsong bluntly stated that his over a decade of experience in the Shanghai financial industry has exposed the chaos behind China’s financial markets. He said that when the illusion of the financial bubble bursts, it becomes apparent that whether it is speculators who become rich momentarily, corrupt officials, ordinary retail investors, or investors, they are all ultimately victims of the CCP regime.
Following the 2015 stock market crash, the mainland Chinese stock market has been in decline. Eighteen years later, P2P lending, gold and silver investments, trusts, telecommunications fraud, and other activities began to rise. However, after only a few years of popularity, these activities began to explode. Many practitioners initially earned substantial amounts, but ended up being pursued for repayments, and even sentenced to prison.
Bu Qingsong introduced that many of his friends in the financial industry were arrested. He cited an example of a friend born in the 1990s who made a lot of money from gold and silver investments, earning over one billion in just one year. However, the government soon started cracking down on the chaos in gold and silver investments, and his friend was arrested and sentenced. Another friend forecasted the stock market on Douyin, with around a million followers, earning twenty to thirty million within a year by selling followers. As a result, he was arrested by the police, and all his funds were frozen. It is said that he had to pay over ten million before being released.
Bu Qingsong lamented that the issue was that these gold and silver investments were set up by local governments. They did this because the local governments lacked money. He mentioned that at that time, various local governments in Hunan established financial offices to issue permits, and with these permits, they could establish exchanges to attract clients who would inevitably lose money. They would give them some advice to earn a little money initially, then get them to make a sizeable investment. Since retail investors do not understand, once they invest a large amount, they lose everything in one day. Some especially dubious characters would run off with all the money, resembling a Ponzi scheme. He said, “During that time, provinces and cities throughout the country were all issuing permits, selling for a few million for fewer permits, and several tens of million for higher permits.”
Bu Qingsong mentioned that once massive losses were witnessed, the government would turn the table on these people, arrest them, and confiscate all their money. He said that P2P lending, trusts, it’s all a trick, all played out like this.
According to Bu Qingsong’s observation, after 2020, the whole environment in China began to deteriorate; by 2022, local governments were facing severe financial difficulties, leading to the rise of events such as “deep-sea fishing” and across-province arrests.
Currently, mainland China’s real estate market has a significant downturn, the stock market is also falling, jobs are scarce, industries are closing down, wages are decreasing, and unemployment rates are continuously rising. In the face of such a situation, the authorities seem helpless, resulting in widespread public discontent. Although people are not daring to riot, there is a heavy sense of social hostility, which is also why there have been frequent indiscriminate attacks in the past two years.
Different from other analysts, Bu Qingsong has an accurate judgment on the Chinese stock market and is willing to speak out. However, his actions contradict the CCP’s so-called “economic enlightenment theory”, bringing upon him imprisonment.
In 2016, as the stock market worsened and everyone was cursing the Securities Regulatory Commission, Bu Qingsong posted on Weibo saying the Commission was not doing well and should be replaced with someone capable.
Although Bu Qingsong’s post had low readership, it was captured and spread widely. Consequently, the Beijing police went to Bu Qingsong’s company and scolded him for an afternoon, forcing him to delete the post. At the time, Bu Qingsong retorted, “Isn’t this my freedom?” and was slapped by the police, with his mouth bleeding. He said, “This incident had a significant impact on me, overturning my values instantly.”
In 2019, Bu Qingsong left the company to become a self-media journalist, focusing on stock commentary and providing professional advice to clients, some of whom had been following him for years. He explained that he made this decision because in the institution, he was under the CCP’s surveillance, with constant reminders from the company’s senior management not to say anything that differed from the top. After 2022, all the passports from higher-ups in the financial industry were confiscated by the company and required to return their year-end bonuses and various incentives, making it impossible for him to continue working there.
Bu Qingsong mentioned that once he posted online about bearish stock market trends and warned people to be cautious as the market was expected to drop to 3,000 points. Although it is normal to have differing opinions on the market, the Hangzhou police arrested him and detained him for three days, claiming he violated the economic enlightenment theory. After repeated instances of being reprimanded, Bu Qingsong lost all hope in the authorities. Subsequently, he chose to exile overseas.
Bu Qingsong expressed his regret, that before 2015, he was extremely poor, but he believed there was still hope. Now, he no longer thinks so. Currently, the country is full of hostility, seeming ready to draw swords at the slightest disagreement. He does not want to become that kind of person and be stifled, so he chose to leave. He said, “It was too unbearable. Either explode in silence, or perish in silence.”
After covering the entire A-share market, let’s take a look at the AI stocks targeted by the CCP authorities:
Recently, “Moor Thread,” engaged in GPU design and research, skyrocketed its stock price just seven days after being listed on the A-share market, announcing they would allocate the highest 75 billion out of the 75.8 billion funds raised for financial management. The news sparked criticism, with many questioning why a startup company like Moor Thread, requiring substantial funds for research and development, would have spare money for financial management. Analysts believe there is no real AI strategy, no real research, just a scam.
On December 5th, Moor Thread made its debut on the A-share Science and Technology Innovation Board, soaring to 941 yuan in just five trading days, accumulating gains of over seven times, and a market value exceeding 440 billion yuan. Through fundraising, they gathered 75.76 billion and intended to use it for chip research and development, as well as for replenishing liquid assets.
On December 12th, Moor Thread announced it would use some of the idle raised capital for cash management, planning to use up to 75 billion within 12 months.
The news sparked public outcry. Some netizens mockingly stated, “At the end of the chip lies financial management.” Some questioned, “The GPU industry is one of the most high-cash-burning and long-term investment-demanding industries globally. With Moor Thread raising a total of 75.76 billion, now allocating 75 billion for financial management, what’s left for R&D? What can you do with that remaining amount? Or is it rather a shell company?”
Others criticized, “Using stockholders’ money for financial management violates the promises made during the listing, betraying investors’ expectations.”
The new media outlet “Leading Financial” published an article saying, “At the time of fundraising, it was about promoting domestic substitution; post-listing, they are busy getting passive in financial management, lacking the initial intention, failing the financial test, a chip battlefield fighting for time while the financial market earning interest, heading in the wrong direction, efforts wasted.”
Blogger “Gigantic Perspective” in a video stated, “Stockholders lend you money, hopeful for your willingness to face challenges upfront, but before you engage, you swap ammunition for two fixed deposits. It’s not only absurd but the most significant betrayal of the underlying capital market. If you wanted to buy financial products, couldn’t the shareowners do it themselves?”
One netizen questioned, “Moor Thread doesn’t need that much capital, so why raise such a large amount in one go? Why not raise the capital multiple times to allow the market to estimate more accurately and reduce the potential landmines? This isn’t just the company’s problem but also a regulatory issue.”
Another pointed out, “According to Moor Thread’s IPO prospectus, the three chip research and development projects are the AI Training Acceleration Chip research project, the Graphics Chip research project, and the AISoC Chip research project. They intended to allocate approximately 25.1 billion, 25 billion, and 19.8 billion respectively. An additional 10 billion was intended to be used for replenishing liquid assets. Now, Moor Thread has used the funds raised for financial management, what does this indicate? It suggests that this IPO prospectus was false! Don’t talk about the research funds being sufficient without utilizing the capital raised. If it was sufficient, then why raise funds? Therefore, it is reasonable to suspect that this is a scam.”
A recent performance of the musical “Les Misérables” at the Shanghai Grand Theatre stirred up discussion. After the show, many audience members spontaneously started singing the famous protest song “Do You Hear the People Sing.” The Chinese title for this song is “Can You Hear the People’s Call,” known for being a protest anthem during mainland China’s “Blank Paper Movement,” especially during the Hong Kong “Anti-Extradition Protests.” The event generated much buzz, with some commentators suggesting that the incident held a symbolic meaning against authoritarianism.
A video circulated online showing that on December 13th at the Shanghai Grand Theatre, following the 40th-anniversary commemorative performance of the musical “Les Misérables,” many audience members spontaneously began singing “Do You Hear the People Sing.” It’s worth noting that this song, from the film version of “Les Misérables,” was once banned in mainland China.
During the pandemic, the Chinese authorities implemented strict control measures. At the end of November 2022, a massive fire broke out in a residential building in Urumqi, leading to at least ten casualties due to obstructed rescue efforts. This tragedy sparked public outrage, prompting several cities to launch the “Blank Paper Movement,” calling for the CCP to lift the controls. Many Chinese youths collectively sang “Do You Hear the People Sing” in public as a form of protest.
Additionally, during the Hong Kong “Umbrella Revolution” and “Anti-Extradition Protests,” “Do You Hear the People Sing” was chanted repeatedly, becoming a protest anthem for democracy and freedom.
The video sparked heated discussions. Some netizens commented, “My friend was among them; he said such people are becoming more prevalent, and the kindling is ready, just waiting for a match!” Others remarked, “In cities like Shanghai, there are more and more enlightened individuals! This time, even if Xi Jinping steps down, it’s no longer useful. Shanghai’s youth want the CCP to step down, not just Xi Jinping!” Some expressed admiration, “This song is a banned song in mainland China, incredible!”; “The things that Hong Kong dare not do are actually being done in mainland China, very moving.”