A Ruthless Person: The Fastest Slap in the Face in History! Pan Gongsheng claimed China is a safe haven, and the next day the central bank's May social financing data immediately debunked it. Breaking down the structure reveals that 'stability' relies entirely on government debt blood transfusions, and loans rely on administrative measures to forcibly move bonds into loans; real financing is still accelerating its descent. This is not a heaven, but a mousetrap that you can enter but cannot leave.
In this video, Hu Liren comments on Pan Gongsheng's claim in Shanghai that China is a "haven for asset protection," pointing out that the central bank's financial data for May, released the next day, directly contradicts this statement. The video argues that China's social financing growth continues to decline, with a decrease in household lending and a contraction in corporate bond financing. The so-called "stability" is primarily supported by government debt, not a spontaneous recovery in market financing. Hu Liren further analyzes that the rebound in bank lending is largely due to accounting transfers under administrative control, rather than a genuine expansion of the real economy. The internationalization of the RMB faces similar issues, creating superficial achievements through currency swaps, subsidies, and data inflation. The video concludes by pointing out that while the CCP outwardly promotes openness, safety, and internationalization, it strictly controls capital outflows internally. This contradiction between words and actions indicates that genuine capital is voting with its feet, and the so-called "China's haven for asset protection" is more like a mousetrap that one can enter but not leave.
Observe things as they are, reject fragmented cognition.
Today, let's discuss something particularly interesting, which I would call the "fastest slap in the face" in history.
It happened just last week. The Governor of the CCP's central bank, Pan Gongsheng, boasted about something, and then the CCP's own data immediately refuted him. Previously, the CCP's left brain and right brain would argue, but what's the situation now? It's like they're fighting within the same brain.
Let me clarify the timeline for you, and you'll understand how coincidental this is.
On June 11th, Pan Gongsheng went to Shanghai to attend a conference jointly organized by the central bank and the Bank for International Settlements. While called a conference, it was essentially a promotion event for the RMB. In the audience were central bank governors from over 30 countries.
What did Pan Gongsheng say to these people? He said that China is a "haven for asset protection" in this so-called turbulent world, that the Chinese market has depth and breadth, and can provide foreign investors with diversified allocation opportunities. He also boasted that the effectiveness of opening up and the implementation of the seven major initiatives have already been seen.
In plain terms, what is this rhetoric? It's a roadshow to attract investment. The core message is simple: foreign investors, bring your money to China.
As a result, the very next day, June 12th, the central bank itself released its financial data for May. This data, upon its release, effectively debunked Pan Gongsheng's boasts from the previous day.
So, you see, it's not someone else undermining him; it's the central bank's own data, released a day later, that has overturned his previous claims. Previously, the CCP's dysfunctional symptoms were more pronounced when different departments clashed, but now they are fighting within the same department. The brain is still at war with itself.
What was slapped in the face? It was the social financing data for May.
I've already discussed April, which saw a historically rare net loan decrease of 10 billion yuan. For the past 20-plus years, China's economy has been entirely driven by leverage. Leverage can be said to be the primary driving force of the Chinese economy. Local governments leveraged land, commercial banks leveraged housing, and ordinary people leveraged themselves to buy houses. The entire China is a machine driven by leverage.
Now, let's look back at the May data.
The year-on-year growth rate of social financing stock fell to 7.7%, down from 7.8% last month. This drop isn't particularly severe, but the trend is key: it fell to 7.8% in April and further to 7.7% in May, indicating a continued downward trend.
Furthermore, the absolute amount is also very disappointing. In the first five months combined, social financing increased by 1,160 billion yuan less than the same period last year; RMB loans issued to the real economy decreased even more significantly, by 1,380 billion yuan.
Think about it, an economy driven by leverage, when that leverage is drying up, I don't know where the CCP gets the nerve to say the economy is doing well.
And the most problematic aspect of the entire data isn't the total amount, but the structure.
Once you break down this structure and see what is propping up this 7.7%, all the CCP's boasting is useless.
As you can see, in May, the entire picture was propped up almost entirely by government bonds. What propped it up last month? It was forced up by state-owned enterprises.
What does this data structure specifically indicate? Let's take a look.
In the first five months, net financing of government bonds increased by about 3,810 billion yuan year-on-year. Yes, you heard that right, an increase of 3.8 trillion yuan. Meanwhile, net financing of corporate bonds decreased by 288.4 billion yuan.
This already speaks volumes. It indicates that genuinely productive enterprises in the market are unwilling to issue bonds to expand. What were the previous bond issuances for? They were for financial speculation within the system. Using funds from bond issuance to arbitrage the interest rates of bank wealth management products, a risk-free arbitrage – everyone loves doing that.
This activity was stopped by the CCP last month. Banks were mandated to increase lending and reduce bond purchases. Coupled with the aforementioned decrease of 1,380 billion yuan in RMB loans to the real economy, and the situation in April where loans even decreased by 10 billion yuan. This is extremely rare in history.
Put these numbers together, and the picture becomes very clear.
What should a healthy, so-called stable financing system look like? It should be that enterprises actively borrow money to invest, ordinary people actively borrow money to consume and buy houses, everyone should be eager to borrow, right?
But how has this so-called stability been achieved now? Enterprises are not borrowing, residents are not borrowing, and residents are even paying off debt. It's entirely reliant on the government issuing its own bonds to artificially prop up the total social financing.
This is not investment, nor is it the result of opening up; it's the fiscal side injecting data into the monetary side.
If the money from the CCP government's own bonds can be called market stability, then what should the US market be called? "Stability Plus"? If there's a "Stability Plus" version, who would be crazy enough to go to China to allocate safe-haven assets?
Moreover, I must specifically address the household sector, as this area has seen the sharpest decline and most strongly refutes the CCP's claims of a recovery in the real estate market.
In the first five months, household loans nationwide decreased by 631.4 billion yuan. Note that this is a decrease, not an increase. This means that not only are people not borrowing new money, but they are also prepaying existing debts for several consecutive months.
What does this scale mean? With this decline, I don't know where the CCP's so-called real estate "mini-spring" is. Or has the CCP secretly changed the meaning and concept of "spring," considering selling one property as a recovery? It's like saying a transaction has occurred just because something was listed on Xianyu for two hours; it's the same concept.
What's even more amusing is that the CCP's own propaganda narratives contradict each other in different places and contexts.
Why? Because the CCP itself has admitted this. How does the CCP's own official narrative interpret this data? It says this is a natural process of residents "actively repairing their balance sheets."
Savor this sentence. What does this statement actually mean? Isn't it an implicit admission? Admission of what? That we are in a "balance sheet recession." On the other hand, they boast about a mini-spring and balance sheet repair, and everyone is wishing for a spring.
Pan Gongsheng loudly proclaims a haven for asset protection and generous returns internationally, while at home, the data admits that ordinary people are busy deleveraging and paying off debt. These two events are separated by only one day. Quite a split, isn't it?
Now, some of you might ask: didn't new credit turn positive in May? Isn't the CCP highlighting this? Saying the credit structure is improving?
This is what I consider the most technical and crucial point in the entire data analysis. Why? Because the way loans turned positive is inherently problematic.
Let's look at the phenomenon first. Do you remember April? RMB loans unusually decreased by 10 billion yuan. In May, it turned positive, and the CCP interprets this as an improvement in the structure.
But what is the truth? The truth is merely an asset transfer under administrative control.
There is very strong evidence for this, from a research report on banks by Kaiyuan Securities at the beginning of the year. It mentioned something: the CCP's regulatory authorities are urging banks not to issue loans with interest rates lower than the yield on comparable government bonds, while also guiding banks to rush to increase lending volumes during the "opening red" period in February.
There are structural inconsistencies everywhere.
When you combine these two clues with the financing structure mentioned earlier, the mechanism becomes transparent.
What should happen in a normal situation? A bank has a sum of money and chooses between buying government bonds and issuing loans based on risk and return. When interest rates are low and real economy demand is weak, how should a rational institution like a bank choose? Naturally, it should buy more government bonds and issue fewer loans. This is actually one of the reasons for the bond bull market over the past two years.
But now, the CCP dislikes the loan data looking too bad, as a decrease is not conducive to the narrative of "broad credit," so it intervenes, restricting and guiding banks to reduce bond holdings and increase loan volumes.
What is this operation essentially? It's preventing banks from holding money in bonds and forcing that money into the loan category.
As a result: the same bank funds move from "bonds"
The item 'investment' was forcibly moved to the item 'loans' by administrative means. The loan figures may look positive and good, but what about the real economy? The real economy's performance is no different because it did not receive a single cent of real increase. This is purely a matter of shifting accounting items. So, to put it plainly, the increase in loans in May was largely because banks were prohibited from buying bonds due to administrative controls. It's equivalent to shifting the amount that should have been in bonds to loans. Even so, the growth is not significant. This is exactly the same tactic as the CCP's previous inflation of export data, squeezing water from one item into another. The total amount did not increase much, but the CCP can brag about how the structure has improved. But this is not credit expansion at all; it's purely data cosmetic surgery. Now everyone understands, right? Government debt is soaring, which is entirely fiscal blood transfusion; loans are being boosted administratively, which is merely a shift between accounting items. What is the cost? The cost is that on the other side, the decrease in corporate bonds is precisely the increase in loans. There is no real demand for loans. Residents are still net repaying loans. This means that real, market-based financing is continuing to accelerate downwards. If Pan Gongsheng uses this data for investment promotion, anyone with a brain will see through it by dissecting the structure. Isn't this just a 'leveraged ventilator' being forcibly kept alive by administration and finance? It has some air when the tube is connected, but it suffocates when the tube is removed, it's the same principle. After discussing the data, I also found something interesting: the CCP's split personality is getting worse. Why? Because I found that what Pan Gongsheng says publicly is almost completely opposite to what the CCP is actually doing. It's not a slight discrepancy or a bit of inconsistency; it's a systemic, directional opposition. Let me go through it point by point. What does he say publicly? He welcomes foreign investors. But what is being done internally? The capital gates are being tightened more and more. Now, foreign exchange purchases require item-by-item approval, outward investments are being scrutinized, and personal foreign exchange quotas are being penetrated and reviewed. So, what's the message to foreign investors? You've come all this way, so don't leave, right? Is that the idea? He publicly states that Chinese assets are a safe-haven paradise. What is the reality? What a paradise indeed, when even the wealthiest people in China, those who understand China best, are seeking refuge abroad. Pan Gongsheng publicly talks about providing diversified investment opportunities. Let's see how diversified it is. We don't even need to look at others; let's look at what the CCP's central bank itself is doing. It can be said that the central bank itself is the biggest 'diversification' in the Chinese market; it is continuously increasing its gold holdings while reducing its US debt in foreign exchange reserves. Diversified, isn't it? He publicly states that the internationalization of the RMB is steadily advancing. But what about the data? The RMB's share in SWIFT is falling instead of rising. Why single out the internationalization of the RMB? Because this data is too damning. The latest SWIFT RMB report for April shows that the RMB's global payment share dropped from 3.1% in March to 2.38% in April. This is even after excluding the Eurozone's calculation, and its ranking has dropped to sixth place. Being surpassed by Japan was expected, but being surpassed by the Canadian dollar is also surprising. Canada's entire currency market is not large, and its trade volume cannot compare to China's, yet the RMB cannot even compete with the Canadian dollar. Even more exaggerated is the amount; the payment amount denominated in RMB plummeted by 14.14% month-on-month. At the same time, the total global payment volume increased by 1.35%. This means that the world is using other currencies more, while the RMB is being used less. So why is there such a systemic opposition? It's the CCP's traditional skill: saying whatever nonsense fits the situation, and then immediately forgetting it themselves. Therefore, what Pan Gongsheng says publicly is essentially a sales pitch to attract foreign investment to take over, to put on a facade for the so-called RMB internationalization, and to offset the negative perception of capital outflow. What the CCP is doing internally is essentially a damage control strategy. The real priority is just two words: prevent leakage. Prevent capital flight and maintain financial system stability. So, you see, these two goals are fundamentally opposed. One is to open up, meaning you open the door and let people in; the CCP wants to prevent, meaning to lock the door and prevent money from escaping. These goals are naturally contradictory. Therefore, the CCP's rhetoric of openness and its practice of control are bound to diverge. This perfectly confirms a judgment: the current stability on paper is entirely achieved through administrative accounting. The louder the shouting, the greater the CCP's pressure. The more it claims China is a safe-haven paradise, the more it indicates that real capital is voting with its feet. They are voting against it and fleeing. Last year, Bloomberg calculated a capital outflow of 1.04 trillion yuan. I would like to ask: can anyone who firmly believes in the Chinese economy provide an answer? If China is truly a safe haven with generous returns, why are the local high-net-worth individuals who know China best moving out at any cost? I have seen true safe-haven markets before. What is the state of money? It rushes in and can move in and out freely. What is the state of China now? Money cannot get out if it wants to, and all channels are blocked. Locals are scrambling to get out, so the Chinese market is clear: it's a market where you can get in but not get out. Do you call this a paradise? Isn't this a mousetrap? Among all risks, price risks like rising or falling are controllable. The biggest risk is when a country's government is shameless and imposes capital controls. This risk is precisely what all foreign investors fear the most, and it is the greatest uncontrollable risk. Well, in a safe-haven market, over 12,000 high-net-worth individuals emigrate in a year, along with 1.17 trillion yuan in wealth, and capital outflow reaches the trillion-dollar level. Moreover, China's net outflow of high-net-worth individuals has been the highest in the world for many consecutive years. So you see, the real diversifiers are not foreign investors at all, but precisely Chinese capital itself. It's just that the direction of this diversification is outward. The direction Pan Gongsheng is inviting foreign investors into is precisely the direction those people are desperately fleeing from. The achievement the CCP is bragging about this time is a currency swap agreement with Argentina. I tell you this, it perfectly illustrates what RMB internationalization is all about. The deal between China and Argentina is essentially a one-way transfusion, plus spending money to buy RMB usage data. The facts are as follows: this swap has been in place since 2009, starting with 70 billion RMB. It has been extended multiple times, renewed to 130 billion RMB in June 2023, with validity extended to June 2026. An additional 35 billion RMB was added. Then in April 2025, just before the US Treasury Secretary's visit, the Argentine central bank announced another renewal of 35 billion RMB. It looks quite lively, doesn't it? But the key is to see what this money is used for. Is it for trade payments? Not at all, it has nothing to do with payments. Argentina immediately converts it to US dollars to repay its debt to the International Monetary Fund. For example, in one year, it used RMB equivalent to 1.7 billion US dollars to repay the IMF. So what is this money for? It's to give a lifeline to Argentina's depleted foreign exchange reserves. So, what kind of business is this essentially? First, it is based on Argentina's needs, not on China's benefits. What is Argentina's foreign exchange situation? It's almost depleted, the peso's exchange rate is volatile, and it owes a lot of debt to the IMF. China providing it with RMB liquidity is equivalent to advancing its foreign exchange reserves, nothing more, and has nothing to do with trade payments. Second, this funding is one-way. What does Argentina do with this RMB after converting it to US dollars? It repays the IMF. The RMB has not formed a two-way trade closed-loop flow between China and Argentina. So what is this action? It's China lending liquidity, and Argentina using it to quench its thirst for US dollars. Third, and most importantly. Every such swap, every settlement denominated in RMB, is counted as the scale of cross-border RMB use and packaged by the CCP as an achievement of RMB internationalization. But this achievement is subsidized by China's own foreign exchange and credit. The product purchased is this usage data. So behind this is an insurmountable knot in RMB internationalization: for a currency to be internationalized, the offshore market must have enough RMB, and there must be enough RMB assets for people to invest in. But China is a country with a trade surplus, and in trade settlements, it flows towards China. In addition, the assets available for offshore RMB investment are very limited. Therefore, the so-called progress in RMB internationalization largely involves swaps or local currency settlements with countries that lack money. The purpose is not to make the RMB flow, but simply to pile up the volume and data. The other party wants liquidity, not RMB.
This is called subsidies for data, not market-driven internationalization.
Let's look at the timing again.
At the same time that SWIFT showed a 14% drop in RMB payments, what were the CCP and some of its major state-controlled media hyping? They were hyping that because the US and Europe were at war, countries were seeking to hedge against the US dollar, so the RMB was expected to surpass the Euro and become the world's second-largest payment currency.
The CCP media are shouting about resurgence, but SWIFT, a hard data, is hitting a new low. Who should you believe? The hard data, or the CCP's lying mouth?
Alright, in conclusion, I'll tell you how to interpret the CCP's data.
I'll give you a few methods that can be directly used.
First, there's a universal key to judging the authenticity of China's financial data: