The European Stock Market Is Still Plummeting After The Result Of The Referendum.

After the UK's referendum is clear, there are still many variables for the UK itself.

The vote supporting Europe is only 3.8% higher than that of the European side, such as Scotland and Northern Ireland.

Therefore, the market is worried about voters in the two regions of Britain. They think they have created a larger constitutional problem for Britain as a whole country.

If Scotland holds the second referendum on independence, it will trigger a constitutional crisis.

Although the international market has been well prepared for this referendum in the UK, the European stock market still plummeted after the result of the referendum.

On the eve of the British referendum, the international market was in a tight battle. After the referendum came out in June 24, 2016, China's A shares immediately rebounded sharply after a few minutes of opening, indicating that A shares began to follow the pace of the international market, but perceived that the overall advantages outweigh the disadvantages and the medium and long term had little impact, and A shares rebounded strongly.

Britain's departure from Europe may also cause global stock market volatility in the short term.

For China's A shares, driven by pessimism in the overseas stock market, the short-term impact is significant, and the risk aversion is increased.

The medium and long term effects are limited. It is estimated that the future market will still be dominated by interval shocks.

For H-shares, the impact may be more direct and obvious, because the link between Hong Kong and the UK is closer than that in mainland China.

Of course, this kind of impact is not expected to last for a long time.

Moreover, for China's economy, the impact of Europe on the Chinese economy in the short term will be controlled as a whole. In the long run, Britain's departure from Europe will not only have a serious impact on the EU and its world economy, but also weaken the growth in the next one or two years, and will also have a huge impact on China's economy.

Britain has already had an impact on China's capital market. Apart from the poor performance of the stock market, Shanghai's "Shanghai Tong Tong" has also been affected.

As a matter of fact, many of the products must be governed by the two legal systems of the British legal framework and the EU securities regulations.

After the United Kingdom was removed from Europe, Hu Tong Tong was affected only by the British legal framework. In a sense, it should be a good thing to "Shanghai link".

However, this is not the case. On the one hand, Britain's departure from Europe has led to great changes in the mood and legal system of the London Stock Exchange. British policymakers are facing unpredictable restructuring and pformation.

On the other hand, Britain's departure from Europe has made London's financial centre far from being comparable to China.

It is necessary to reassess the design framework of Shanghai link.

Although the "Shanghai link" has made great progress in the field of technology, the possibility of issuing the eighth Sino British economic and financial dialogue during this year is still very slim.

At present, the deep economic impact is still hard to ascertain. The British economy seems to be heading for recession.

By the end of June 27, 2016, bank shares in the UK had evaporated one billion pounds of market value, such as Royal Bank of Scotland and Barclays market value fell only 1/3 on two days.

On the whole, the pound fell to the lowest level since 1985, which is just the beginning.

Britain's post euro exchange rate will be most directly affected. Under the double falls of the euro and the pound, it will be difficult for the renminbi to be independent.

For example, in June 28, 2016 trading day, the pound fell to a new low of 31 years against the US dollar. The RMB followed a big drop and hit a new low of 5 years.

Britain's economic downturn in the UK will be huge in the short term.

Obvious fluctuations intensified.

The United States, Europe and other countries are considering "stability" measures, and they will become more cautious when they consider monetary policy in the future.

The Fed's expected rate of increase in interest rates has dropped sharply during the year.

And interest rate plans will be reassessed.

London is the world's second largest offshore renminbi trading market outside Hongkong. From the perspective of investor and consumer confidence, Britain's position as an international financial centre will be shaken.

Because London's financial services industry will lose the "golden passport" that allows them to operate freely within the EU.

Even from a national perspective, the UK's sovereign debt rating outlook is reduced to "negative" by Moodie, an international rating agency, which will also lead to the deterioration of the British economy and the huge financial performance of the UK will be affected.

Adding some British financial institutions to the EU will surely shake Britain's position as an international financial centre indirectly.

Affected by the influence of Britain's departure from Europe, the uncertainty factors facing the strategic step of RMB internationalization are facing the biggest test.

The internationalization strategy of RMB entering the EU market needs further adjustment to adapt to the current changing situation.

In addition, we need to point out that at present, China's stock of money is as high as 20 trillion dollars, and the process of RMB internationalization can not be pushed forward according to the traditional mode.

Generally speaking, the distance between Britain and Europe has narrowed the distance between China and Britain, and the historical opportunity of RMB internationalization may have arrived.