Ok-Shop3935 | 0 points | Jun 18 2021 10:29:09

Net investment of multinationals in PRC=Net paid capital to PRC+ profit accumulated. All the stuff of net investment are overstated in annual consolidated financial statements due to inflated PRC￥rate since investment.

For example, a US company has profit PRC￥12 and $3 from PRC ( owned completely by US company) and other countries respectively after cancellation of internal transactions among them. If $1=PRC￥12 , consolidated profit=12/12+3=$4, otherwise if $1=PRC￥6, consolidated profit=12/6+3=$5. Due to manipulated exchange, EPS(Earnings per share=profit/shares outstanding weightings averaged) increased 25%. If CCP overstated profit to PRC￥24 via Great Firewall, police and uninspected audit papers, EPS rose 75% (After overstatement, consolidated profit rose from $4 to $7 as 24/6+3=$7) .

But, when multinationals decide to withdraw investment via cash $, PRC has inadequate $ for them to liquidate operation and has to suspend liquidation with administrative measures. Besides, PRC may stop multinationals taking out accounting records in the name of protecting national security and national secrecy.

So PRC propaganda and officials say there’s no sign of large foreign capital withdrawal.

Divestment becomes infeasible. Alternatives left to faithfully present financial statements are scarce. Cancelling PRC is only feasible option.