Financial bloggers’ crackdown has Chinese investors scrambling to find data


China has launched a crackdown on financial blogs and social media, a move that may increase the difficulty of obtaining reliable data on the world’s second largest economy.

These restrictions are implemented as Cracks in Wall Street’s high-rises widen Regarding whether investing in China is a wise choice.

A sort of Snowball policy reform This caught seasoned Chinese investors by surprise, frightened the market, and raised questions about which industry Beijing will target next.

Last month, the National Internet Information Office launched a “special rectification” action. Internet regulators are cracking down on market skeptics and those who express pessimism about the Chinese economy, as well as misinformation and malfeasance spread in financial news services and social media accounts.

Economists, analysts and scholars concerned about China admit to the problems caused by unwitting online comments and rampant fraudulent activities. But they warned that the excessive influence of the election campaign can also silence valuable voices that differ from the official Beijing statement.

A senior Chinese market analyst who asked not to be named stated that the lack of information about China “absolutely” creates an environment in which misjudgments and misjudgments will become more common.

“I think this is a huge risk… It only makes people more nervous about what they say,” he said. “This really worries me: will we really know what’s going on? Because the data is already wrong. Now we will reduce that ground color.”

A Hong Kong investor in Chinese bonds said these measures will further limit insights into which bond issuers are “trustworthy” because blogs and social media are sometimes the only places that provide information on company personnel changes and regulatory investigations or arrests.

The response to the investigation by the regulatory agency was swift. Local authorities have carried out a series of arrests in what they call the worst case of stock manipulation, including cases where the alleged perpetrator used live broadcasts and WeChat groups to “speculate” stocks.

In Shanghai, the first wave of crackdowns initiated by regulators led to the deletion of more than 17,000 pieces of “harmful information” by securities and Internet officials and the closure of more than 8,000 illegal online accounts. In Shenzhen, the authorities cracked a case of stock manipulation and arrested 14 suspects.

An analyst stated that “only 10 people in the world” including Xi Jinping know which direction China is heading © Ng Han Guan/AP

Social media platforms are cleaning up websites and blogs, and self-regulating on China’s largest social networks, such as Tencent’s WeChat, Twitter-like Weibo platforms, and Douyin, the sister app of Bytedance’s Douyin.

The famous Guangdong financial commentator Huang Sheng has more than 5 million followers on his platform. He was arrested and his WeChat and Weibo accounts appear to be inactive.

The Weibo account of Xu Xiaofeng, who has 4 million followers, has not been updated since the beginning of July. The post of Yi Wei, another financial blogger followed by hundreds of thousands of people, appears to have been deleted.

There are also signs that the Chinese police are Tracking and interrogating people According to a report this week in the Financial Times, the use of overseas financial news websites through a new application designed to combat fraud.

A professional based in China said that although “there is a lot of fraudulent activity”, the crackdown may be extended to “anyone who’misunderstands’ economic data.”

“This means that we basically disagree with Beijing’s interpretation of the data…. Those of us who are trying to be more objective or cynical, I think we are all worried about the impact. It’s too early to say,” he said , Requested anonymity.

The senior China analyst added: “China has always had headline risks, but now there are different levels of headline risks. Any column about a certain industry or some small articles in the newspaper can be used in the next day. The way it happens drives the market.”

A Western economist who is concerned about China also asked not to be named. He pointed out that “quantity” Data series Stopped, including statistics about social unrest. Other data sets often undergo unexplainable revisions, and “microdata” of households and companies that are vital to economic research is also unavailable.

The risk stems from Muddy China’s economic structure It just happened that investors desperately searched for fragmentary information about the direction of Beijing’s economic plans and regulations.

In recent months, this has Wiped out hundreds of billions of dollars The market value of e-commerce, ride-sharing, gaming, education and entertainment groups has triggered Charity in full swing The founder of the company wanted to appease Beijing.

According to official media reports, the CCP this week also pledged to consolidate “Marxism’s guiding position in the field of ideological cyberspace” because it issued guidelines for a more “civilized and standardized” Internet.

This senior analyst believes that only “only 10 people in the world” may know the direction of China’s comprehensive reforms.

“You may be talking about [President] Xi Jinping, the Politburo Standing Committee and some major regulatory agencies, that’s it. “

Charlene Chu, a China expert at Autonomous Research, said that it is difficult for foreign investors to understand what these changes ultimately mean for ordinary Chinese companies in return.

“There was a time when the average return of a Chinese company could be several times higher than that of other economies. Obviously, it makes sense that you need to stay in China,” Zhu said.

this Uncertainty hangs over China Now includes stricter regulation, higher tax rates, larger charitable donations and the threat of government influencing business decisions.

“All of this raises the basic question of what will happen to the excess returns that you have been able to obtain as a Chinese investor in the past, and how much this excess return will disappear or decrease in this new environment,” Zhu said.

“Returns may not be eroded as people fear. We don’t even know now.”

Edward White in Seoul and Sherry Fei Ju in Beijing


Source link