From the Wall Street Journal, December 20:
Experts at brokerages say they are pulling punches as Beijing clamps down
HONG KONG—China economists and strategists at leading brokerages say they are hewing closer to the official government line and being cautious in their commentary in response to signs of tighter monitoring.
The latest sign came Friday when the state-run China Securities Journal said the main securities industry body has told brokerages to ensure their chief economists play a positive role in analyzing official policies and boosting investor confidence.
The government’s sensitivity to criticism has risen recently as discontent festers among Chinese people. Policymakers are trying to jump-start the weak economy by lowering interest rates and stimulating consumer spending.
Directives to be careful about commentary are a familiar feature of China’s markets, especially during politically delicate periods such as October 2022, when leader Xi Jinping was re-elected to a third term. From time to time economists and analysts are sidelined from social media after sharing unauthorized or negative views.
Some local securities bureaus in China have told brokerages and other financial institutions to place more scrutiny on public statements made by their employees, especially chief economists and research analysts, domestic Chinese media outlet Cailian reported Thursday.
China Securities Journal, which is supervised by the government’s official Xinhua News Agency, doubled down on the message by relaying the guidance delivered to financial institutions about what chief economists should and shouldn’t do.
If a chief economist repeatedly causes serious adverse effects owing to inappropriate comments, the employer should punish or possibly fire the person, China Securities Journal cited the official guidance as saying. Chief economists should publicize and interpret official policies and guide market expectations, it quoted the guidance as saying.
The newspaper didn’t say what comments were inappropriate. The China Securities Regulatory Commission didn’t respond to a request for comment.
Economists and strategists who analyze China said the state-media articles and other material interpreting the new guidance ricocheted around the region’s financial world on Friday. They said it added to the pressure to avoid edgy commentary or expressions of agreement with other people’s criticism.
Late last year, some economists and strategists began drawing comparisons between China’s economic downturn and Japan’s deflationary woes that began in the 1990s, such as a fall in property prices, an aging population and cash-strapped local governments.
At the time, economists at Chinese banks and brokerages were told by their higher-ups or compliance departments to refrain from comparing China to Japan or talking about deflation, people familiar with the matter said. One economist who used to work at a state-owned bank in Hong Kong recalled trying to publish research notes about the country’s deflation threat and repeatedly failing the bank’s compliance checks.
Shunning the word “deflation” hasn’t made the phenomenon go away in the year since.
The producer-price index, which captures factory-level prices, has fallen year-over-year for 26 consecutive months through November....
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In a similar vein:July 9, 2011
A Cautionary Tale: "Argentina files criminal charges against consulting firm for publishing inflation data"
