China has launched a crackdown on financial blogs and social media. This is a move that risks exacerbating the difficulty of obtaining reliable data on the world’s second largest economy.
The restrictions were implemented as follows Rhagades at Top Echelon on Wall Street Whether investing in China was a wise bet.
NS Review of snowballing policy Suddenly struck by veteran Chinese investors, it spooked up the market and then raised questions about which sector Beijing would target.
Last month, China’s Cyberspace Administration launched a “special remediation” campaign. Internet regulators are cracking down on market skeptics, pessimistic opinions about the Chinese economy, as well as false information and fraud emitted from financial news services and social media accounts.
China-focused economists, analysts and scholars have acknowledged the problems caused by non-informed online commentary and rampant fraud. But they warned that overkill from the campaign would also silence valuable voices that diverged from the official story promulgated by Beijing.
A veteran analyst in the Chinese market who asked not to be nominated said the lack of information about the country created an environment where “absolutely” miscalculations and misjudgments were more prevalent.
“I think it’s a big risk … it will be more nervous about people saying something,” he said. “It worries me: are we going to know what’s really going on? Because the data is already in trouble. And now we’ll reduce the color on the ground. “
Investors in Hong Kong-based Chinese bonds are the only place where blogs and social media provide information on company personnel changes and regulatory investigations and arrests, so this move is “ He said it would further limit insights into “trustworthy.”
The response to the Watchdog investigation was quick. Municipalities have made a series of arrests for what they said was the worst case of stock manipulation, including when suspects “pumped and dumped” stocks using live broadcasts and WeChat groups. ..
In Shanghai, as a result of the first salvo of regulators, brokerage firms and internet officials have removed more than 17,000 “harmful information” and closed more than 8,000 illegal online accounts. In Shenzhen, 14 suspects were arrested after authorities cracked down on market manipulation cases.
Social media platforms are scrubbing websites and blogs, with self-regulatory efforts across China’s largest social networks, including Tencent’s WeChat, Weibo platforms like Twitter, and ByteDance’s TikTok sister app Douyin. I am.
Huang Sheng, a prominent Guangdong financial critic with more than 5 million followers across the platform, has been arrested and WeChat and Weibo accounts appear to be inactive.
XuXiaofeng’s Weibo account, which has 4 million followers, has not been renewed since early July. A post from Yi Wei, another financial blogger with hundreds of thousands of people, seems to have been scrubbed.
Chinese police People tracking and questions The Financial Times reported this week that it is using foreign financial news sites through a new app designed to combat fraud.
A China-based expert said the crackdown would probably extend to “people who” misunderstand “economic data,” while “massive fraud is taking place.”
“This basically means disagreeing with the interpretation of Beijing’s data .. .. Our people trying to do something a little more objective or a little more ironic, what are all of us having that effect? I think I’m worried about that. It’s too early to say, “he said asking for anonymity.
A veteran Chinese analyst added: “China has always had headline risk, but now it has a different degree of headline risk. All sorts of editorials and small newspaper articles about a particular sector are marketed the next day in a way that never happened in the past. May move. “
Western economists focused on China didn’t want to be named, Data series It was discontinued, including statistics on social turmoil. Although there were frequent and unexplained revisions of other datasets, the “micro data” of households and businesses, which are important for economic research, were also unavailable.
Risks caused by Muddy China’s economic situation Consistent with investors desperately looking for scraps of information on Beijing’s economic planning and regulatory direction.
This has been in the last few months Wipe out hundreds of billions of dollars Turn off the market value of the entire group of e-commerce, ride sharing, games, education and entertainment, Philanthropic rage By the founder of the company to soothe Beijing.
According to state media, the Chinese Communist Party has pledged to strengthen its “leading position in Marxism in the field of ideological cyberspace” this week as it released more “civilized and well-regulated” Internet guidelines.
Veteran analysts believed that only “10 people in the world” might know where China is heading for drastic reforms.
“You are probably talking [President] Xi Jinping, the Politburo Standing Committee, and some of the major regulatory authorities, that’s it. “
Charlene Chu, a Chinese expert at Autonomous Research, said foreign investors are having a hard time understanding what this change ultimately means for the average Chinese company’s bottom line.
“There was a time when the average revenue from Chinese companies could be multiples of that of other economies, and it clearly makes perfect sense that you need to be in China.” Said Chu.
NS Uncertainty in China Today, it includes tightening regulations, raising tax rates, increasing charitable donations, and threats to influence government decisions in business.
“It all leads to the fundamental question of what happens to that excess return you could get as an investor in China, and how much it disappears or is eroded in this new environment. “Chu said.
“Returns may not be as eroded as people fear. I don’t know now.”
Report by Edward White in Seoul and Sherry Fay Ju in Beijing
Financial blogger crackdown leaves China investors scrabbling for data Source link Financial blogger crackdown leaves China investors scrabbling for data