Bee Bro’s chart looks like there’s a strong correlation at first glance, but in reality, the two lines use completely different axes. The RMB exchange rate and the Shanghai Composite Index were scaled separately, which makes them visually appear highly overlapping. So just looking at the price curves alone doesn’t prove there’s such a strong correlation between the two. Plus, if you zoom out over a longer time frame, there are clearly periods of decoupling. The most typical example is from 2014 to 2015, when the Shanghai Composite Index surged from over 2,000 points to over 5,000 points, but the RMB didn’t appreciate by a corresponding margin. That rally was more driven by domestic liquidity, leverage, and risk appetite. That said, since 2016, there have indeed been many periods where the RMB and A-shares moved in the same direction. I think this logic makes sense because the RMB and Chinese stocks are often influenced by the same set of macro factors, such as expectations for the Chinese economy, the strength of the US dollar, domestic and foreign interest rate differentials, and cross-border capital flows. When overseas funds increase their allocation to Chinese assets, they simultaneously drive up demand for the RMB and increase buying pressure on Chinese stocks. So it’s entirely possible for RMB appreciation and A-share rallies to happen at the same time. The reverse is also true. That’s why I think this chart shouldn’t be interpreted as RMB appreciation necessarily driving A-share rallies, or A-share rallies leading to RMB appreciation. A more accurate interpretation would be that the RMB and A-shares exhibit a complementary relationship during certain macro cycles. More capital flowing into RMB-denominated assets can push up the stock market, but it’s less likely that a stock market rally directly causes RMB appreciation.