#Logic
Recently, a widely circulated article claimed: 'If Chinese concept stocks are collectively sold off by Wall Street, China's dollar reserves will be instantly depleted, the renminbi defense line will completely collapse, and the countdown to a financial nuclear bomb has begun!'


Doesn't it sound quite horrifying?

Let's stay calm and dismantle the logic of this 'doomsday theory' together to see if there is any real substance, or if it is just another round of 'financial scare tactics'.


1. 'Does the dollar arsenal support the renminbi?' — Concept substitution.


The original text states that China's $3.1 trillion in dollar reserves is equivalent to leveraging 300 trillion renminbi in market circulation, which is equivalent to '1 dollar supporting 100 renminbi'.


At first glance, it's shocking, but the problem is — the renminbi is issued by China's central bank itself and does not fundamentally rely on dollar reserves to support the market.


The basis for the issuance of the renminbi is the total domestic economic output + monetary policy intentions; U.S. dollar reserves are just one of the tools used by the central bank to adjust exchange rates and cross-border capital flows. Saying 'the dollar supports the renminbi' is like saying 'the gold bars in your garage determine whether you can drive a BMW', it's ridiculous.


2. Do delistings of Chinese concept stocks equal a massive dollar exodus? — Logical leaps.


The core intimidation chain of the original text is:


Wall Street sells off Chinese concept stocks → Chinese enterprises are forced to buy back → A large amount of dollars is withdrawn → Foreign reserves plummet → The renminbi exchange rate collapses.


This chain is 'hard pulling'.


• First of all, the delisting of Chinese concept stocks will not automatically trigger a 'forced dollar buyback', especially since most Chinese concept stocks have already achieved 'dual listing' in Hong Kong and A-shares, and there are buffer channels for capital flow.


• Secondly, when U.S. stock investors sell stocks and receive dollars, that money is likely to remain in the U.S. market, which does not equate to 'flowing out of China'.


• Moreover, China's foreign exchange management mechanism is extremely strong, especially under capital accounts, where any large capital flows must be reviewed, divided, and limited. Do not apply the U.S.'s free flow model to China; they are completely different.


3. 'Financial nuclear explosion' is a panic construct built on stacked assumptions.


A common tactic in such articles is: 'multiple assumptions + total loss of control + regulatory incompetence', creating a 'life-threatening' doomsday scenario.


But in reality, the People's Bank of China's toolkit is far more complex than what is mentioned in the article:


• Currency swap agreements (with multiple central banks);

• Forward exchange intervention;

• Countercyclical factor manages exchange rate expectations;

• The structure of foreign reserves is flexible (U.S. Treasury bonds, gold, SDR);

• Offshore renminbi pool intervention mechanism…


These tools are like a 'zoned fire prevention system', making it difficult for any single fuse to directly ignite the main engine.


4. 'Regulatory iron net' is not a sign of crisis but a routine configuration.


The article lists many measures of 'regulatory lockdown' at the end, such as:


• The annual limit for personal currency exchange is $50,000;


• Cross-border capital flows of enterprises must be audited throughout the process;


• Large currency purchases must be filed.


These policies did not suddenly emerge in the past two years; they have been part of China's foreign exchange management system for the past decade.

In other words, this is the norm, not a warning. Do not package the 'old system' as a 'new crisis'.


Tom Zhong's concluding remarks:

The essence of the market is expectation management.

True systemic risk does not rely on articles to scare people; it speaks through data.

In the face of such 'highly forwarded panic articles', investors should maintain a degree of rationality:

1. Do not be an emotional appendage to clickbait headlines;

2. Focus on the real changes in capital flow and policy tone;

3. Look at how regulators act, not how self-media dramatizes it.

What you fear is not the risk, but not knowing its truth!