USD/CNH at 14-year highs after China congress closes and GDP released

However, the release coincides with the conclusion of the 20th National Congress of China’s Communist Party, which ended with the appointment of a hard line polit bureau, and this has taken the Hang Seng and the Hang Seng Tech index down.

USD/CNH reaches 14-year highs

After a two week delay, which coincided with the People's National Congress in China, there has now finally been the release of third quarter gross domestic product (GDP) and it's come through by a margin of 3.9% year-on-year (YoY).

Now this is better than the expected 3.4% reading, but the point is that growth is slowing in China and this plus the fact the polit bureau is now more hardline than ever before, means we've seen money coming out of China, we've seen investment coming out. And as a result of all this, we've seen the Chinese currency weaken.

USD/CNH

Let's take a look at what's happening with the US dollar, now at a 14-year high against the offshore Chinese yuan.

If you're long on this, which has been the trade to do certainly in the last couple of weeks or so, but in the longer-term picture since the Chinese decision to go for a zero-Covid policy, we've seen a slowdown in the Chinese economy. So we've got this push higher to the 72,929 which is a 14-year high for the dollar against the Chinese yuan.

Now, the fact that the National People's Congress ended after the weekend with this hardline polit bureau now having been put in place, concerns are now that the Chinese authorities are going to crack down very hard on tech companies in China particularly, not wanting to see tech companies own too much information.

The Chinese authorities want to have a really detailed look about what these tech companies are doing.

Hong Kong Tech, Hang Seng indices

This is the Hong Kong Tech Index now down at a record low, but it's not just that, it's also the Hang Seng index as well, down considerably from the recent moves that we've seen.

This is the long-term picture. You can see the Hang Seng stock index is now trading at levels not seen since April 2009 with big declines on the 24-hour market. It's hardly any buyers at 15,141, it's all going wrong for China.