Stay informed with free updates

Simply sign up to the Chinese business & finance myFT Digest — delivered directly to your inbox.

A former senior Chinese financial regulator has said top Beijing leaders set “psychological” targets for the nation’s stock markets and currency exchange rate that are not based on fundamentals.

The comments to a seminar by Xiao Gang, former head of the China Securities Regulatory Commission, offer a rare insight into the often murky world of elite policymaking at a time when the Communist party under President Xi Jinping has been tightening control of the financial system.

In videoed remarks made at the seminar in mid-November at the PBC School of Finance at Tsinghua University and published on the social media site X last week, Xiao said that while top leaders did not officially set market levels, they became nervous when certain thresholds were passed.

Xiao, who was removed as CSRC chief in 2016 after a severe market downturn, said senior officials kept “goals” in their minds for the markets. These were not “personal” targets but depended “rather on what the leadership considers as the standard”.

He said China’s leaders became uncomfortable if the stock market benchmark, the Shanghai Composite index, fell below 3,000 points.

“The 3,000-point goal is just a psychological goal; it has no scientific proof and does not come with any [formal] government order,” Xiao said, laughing. “But there is a consensus [among the top leadership].”

“This has been a [perception] ingrained in people’s minds for many years. But how much scientific basis is there for this? None,” he said.

The frank comments from Xiao, who worked in China’s central bank before playing an important role in banking sector reform as head of state-owned Bank of China, were highly unusual even for a retired senior official. In China, discussion or criticism of the internal workings of the leadership process can lead to severe punishment.

Xiao said China’s leaders had once considered any weakening of the renminbi through Rmb7 to the dollar to be a very worrying prospect, but when this did finally occur several years ago, “nothing significant happened” to the markets.

“It wasn’t us who were worried; it was the senior leadership,” he said.

The onshore renminbi was trading onshore at Rmb7.26 to the dollar on Wednesday.

Beijing sees the exchange rate as critically important to its mission to develop China as a reliable trading partner, with numerous officials calling for a stable exchange rate against the dollar.

Chinese authorities also see the country’s stock markets as both venues for corporate fundraising and important tools for maintaining social stability. Investors have long suspected the top leadership maintains unofficial targets for the markets and tries to steer trading when prices breach these levels.

Millions of Chinese households participate in the stock market as one of a limited range of investment opportunities available to the middle class in the country, particularly after a recent real estate sector crash.

State-affiliated entities, known as the “national team”, occasionally launch buying sprees to prop up stocks. In September, the government announced one of its biggest monetary policy interventions yet to encourage more institutional buying of equities.

Xiao was asked at the seminar about the government’s use of the “national team” to support markets.

“The ‘national team’ only intervenes at rock-bottom levels, such as 2,600, 2,700, or 2,800 points,” he said, referring to the Shanghai Composite Index. The index was at 3,276.58 after Wednesday’s morning trading session, up 0.5 per cent on the day.

Xiao’s remarks drew a stinging rebuke from Dong Shaopeng, an advisory committee member of the Securities Association of China, a body under the direct supervision of the CSRC.

As a former regulatory official and a veteran of the financial sector, Xiao’s remarks could cause turmoil in public opinion, Dong wrote in an article posted on the social media platform Weixin.

“Such information, when taken out of context, spreads false information,” Dong said.

Xiao could not be reached for comment. The CSRC and the PBC School of Finance did not respond to a request for comment. The People’s Bank of China declined to comment.

Data visualisation by Haohsiang Ko

The 2023-24 school year saw more international students in the United States than ever before — setting a new record largely driven by graduate students and recent graduates in internship-type programs.

Over 1.1 million international students were in the U.S. during the last academic year, according to a survey of nearly 3,000 colleges and universities by the Institute of International Education (IIE) and sponsored by the U.S. State Department.

The new figures mark a full rebound from the start of the pandemic, when international enrollment dropped by 15%. But experts say those increases could once again be threatened under the incoming Trump administration, which upended the lives of many international students and workers in its first term.

Already, a few schools have recommended that their international students traveling overseas for winter break consider returning to the U.S. before President-elect Trump takes office on Jan. 20. That includes the University of Massachusetts Amherst, Wesleyan University and the Massachusetts Institute of Technology.

International students have made up around 5% of all college and university students in recent years. In the last school year, they injected about $44 billion into the U.S. economy, while also supporting about 378,000 jobs across the country, according to the group NAFSA: Association of International Educators.

Mirka Martel, who led the IIE survey, said while there is uncertainty, historically there has been bipartisan support to continue to welcome international students.

“We’ve seen numbers go up and down in the past, but overall, we’ve seen that there has been support, because of how much international students bring through economy and through culture to our states,” she said.

For the first time in 15 years, Indian students outnumber Chinese students

The new record in international students is largely fueled by graduate students and those in the Optional Practical Training (OPT) program, which allows foreign students to briefly work in the U.S. after completing their studies.

While the number of undergraduate students stayed about the same compared to the previous year, the graduate cohort and OPT program grew by about 8% and 22% respectively — reaching historic highs.

Meanwhile, India and China together accounted for over half of all international students in the U.S., according to the IIE. But for the first time since 2009, more students came from India than China, with over 331,000 students from India present during the 2023-24 school year.

The number of international Indian students has been rising since 2021, in particular due to an increase in the number of Indian graduate students coming to the U.S. Meanwhile, the number of international Chinese students has been waning since the pandemic. But China remains the top-sending country for undergraduates, with 87,000 students.

“What we’re seeing is that the number of undergraduate students in some countries has been taking longer to rebound than the graduate numbers,” Martel from IIE said.

California, New York and Texas continue to be the most popular states for international students, but Missouri saw the biggest growth last school year, followed by Michigan and Illinois. STEM fields remained a favorite, drawing over half of all international students.

Trump imposed restrictions affecting some international students in his first term

People walk by New York University in October 2023 in New York City. The university has a large international student enrollment.

Spencer Platt/Getty Images

hide caption

toggle caption

Spencer Platt/Getty Images

Advertisement

Before Trump took office in 2017, the number of newly arrived international students in the U.S. had been rising for nearly a decade. During his first term, those numbers fell every year. But experts say international enrollment has fluctuated throughout the years, making it difficult to pinpoint the exact cause for the change in numbers.

One of Trump’s first initiatives upon taking office in 2017 was ordering a travel ban for nearly all travelers from several majority-Muslim countries. It was challenged in courts, but led to students being detained at airports or forced to return to their home countries. (It was later reversed by President Biden on his first day in office.)

Students from China also faced heightened scrutiny when it came to their visas amid an increase in U.S.-China tensions. That meant extra screenings, shorter stays, or even cancellations for at least hundreds of students.

And in 2020, the Trump administration temporarily barred international college students from being in the U.S. if their classes were entirely online. The move was met with swift backlash and quickly reversed.

Students and schools remain wary of incoming Trump administration

During this year’s presidential campaign, Trump said it was important to retain international student talent. “What I will do is, you graduate from a college, I think you should get automatically, as part of your diploma, a green card to be able to stay in this country,” he told the All-In Podcast in June.

But some schools and international students in the U.S. have remained wary of the incoming Trump administration, given the president-elect’s first term.

At the Berklee College of Music in Boston, Yewon You from South Korea and Rachel Syuen from Malaysia told NPR they felt a lot of uncertainty going into the new presidency. Both are in the U.S. as participants in the Sony Music Group Global Scholars scholarship program.

You, who is a senior, said she has been closely monitoring the news on visas, foreign workers and immigration. She added that she adjusted her winter break plans to return to the U.S. before the inauguration as a precaution.

You’s biggest concern is about securing a job in the U.S. after college. Her big dream is to work in Hollywood and produce film scores, specifically for sci-fi movies. But she knows it can be difficult to obtain a work visa, and that visa policies change frequently.

“I’m a senior and with a new president, there’s overlap on the pressure and uncertainty in finding a job after I graduate,” You said.

Syuen, also a senior, was initially excited by Trump’s promise of green cards for international students, but now questions if he will follow through due to a lack of details. Syuen said opportunities to study music in Malaysia were limited. She hopes to stay in the U.S. to produce music that blends her experiences, like incorporating traditional Chinese instruments into pop.

“I am equally nervous about everything, but I am also doing my part just to be a better version of myself each and every single day so that I remain competitive,” Syuen said.

Unlock the White House Watch newsletter for free

Your guide to what the 2024 US election means for Washington and the world

Israeli and Lebanese leaders have accepted a US-brokered ceasefire deal, US President Joe Biden said on Tuesday, raising hopes of an end to the year-long hostilities between Israel’s forces and Hizbollah.

Speaking from the White House, Biden said the deal would take effect at 04.00 local time in Lebanon on Wednesday.

Israel’s security cabinet voted to approve the plan on Tuesday night, and it must also be approved by Lebanon’s caretaker government.

“Under the deal reached today . . . the fighting across the Lebanese-Israeli border will end,” Biden said. “This is designed to be a permanent cessation of hostilities.”

Under the terms of the deal, Israel’s forces will gradually withdraw from Lebanon over a period of 60 days, and be replaced by the Lebanese army. Hizbollah, the Lebanese militant group, will be barred from rebuilding its infrastructure in southern parts of the country.

The US and France will work with Israel and Lebanon for the ceasefire deal to be fully implemented, Biden said, adding there would be no US troops deployed in southern Lebanon. 

Israeli Prime Minister Benjamin Netanyahu said earlier on Tuesday evening that Israel was ready to implement the deal, but that the “duration of the ceasefire depends on what will happen in Lebanon”.

He also insisted he had reached “full understandings” with the US that Israel will maintain “full military freedom of action” in the event that Iran-backed Hizbollah violates the agreement.

“If Hizbollah violates the agreement and tries to arm itself — we will attack,” Netanyahu said.

“If it tries to rebuild terrorist infrastructure near the border — we will attack. If it launches a rocket, if it digs a tunnel, if it brings in a truck with missiles — we will attack.”

As Netanyahu spoke, the Israeli military conducted heavy air strikes across Lebanon, including several neighbourhoods in central Beirut previously untouched by the conflict, unleashing fresh panic in the Lebanese capital.

Diplomats hope the deal will pave the way for an end to one of the bloodiest rounds of fighting in decades of conflict between Israel and Hizbollah.

US President-elect Donald Trump’s national security adviser Mike Waltz welcomed the agreement.

“I’m glad to see concrete steps towards de-escalation in the Middle East,” he said in a post on X.

Waltz added Iran was the “root cause of chaos & terror” in the Middle East and said the Trump administration “will not tolerate the status quo of their support for terrorism”.

The latest hostilities between Israeli forces and Hizbollah erupted last year when the group began firing rockets at Israel in solidarity with Hamas, after its deadly October 7 attack on the Jewish state.

Israel responded to the Palestinian militant group’s killings in southern parts of the country by invading Gaza, devastating much of the coastal enclave.

The fighting between Israel and Hizbollah has since killed more than 3,700 Lebanese and more than 140 Israelis, as well as forcing people from their homes on both sides of the border. More than 1mn Lebanese and about 60,000 Israelis have been displaced.

For most of the past year, the fighting between Hizbollah and Israel was largely confined to exchanges of fire in a narrow strip of land either side of the Blue Line, the UN-demarcated border between the two countries.

But in recent months it has escalated into a full-blown war, with Israel carrying out a ferocious bombardment of targets across Lebanon before launching a ground invasion in October.

The offensive dealt a series of devastating blows to Hizbollah, killing its longtime leader Hassan Nasrallah, and damaging large amounts of its weapons and infrastructure as well as destroying broad swaths of the country’s east and south.

Hizbollah and its patron Iran said most of the last year that they would not agree to a ceasefire without an end to the war in Gaza.

But Hizbollah has since changed its position, and Israel’s offensive in Gaza continues.

Biden said his administration would also pursue an effort to revive talks among Turkey, Egypt, Qatar and Israel on a ceasefire in Gaza.

He added normalisation between Israel and Saudi Arabia, and establishing a Palestinian state, “remains possible”. Doing so “will require making some hard choices,” he said.

“Now Israel must be bold in turning tactical gains against Iran and its proxies into a coherent strategy that secures Israel’s long term safety and advances a broader peace and prosperity in the region,” Biden said.

Cartography by Cleve Jones in London