Chinese Business Analysts' Growing Absence on Social Media Raises Concerns
Chinese business analysts facing restrictions on social media, hindering their ability to comment on the country's troubled stock markets and economy, raising concerns about transparency and potentially deterring investors
Several leading Chinese analysts have been targeted by social media restrictions aimed at limiting their ability to discuss the troubled stock markets and economy. The accounts of at least six analysts show that they are unable to post new content or attract new followers on popular social media platforms.
Liu Jipeng, an advisor to the Chinese government, recently urged retail investors in the country to avoid investing in the stock market. Since early December, he has not been active on social media and his accounts are no longer accessible to users. When CNN attempted to follow his accounts on the Douyin short-video app and Toutiao news aggregator app, they were met with a message stating, "This user cannot be followed due to violations of the platforms' rules."
Chinese social media has a reputation for silencing critics. Prior to being restricted, these business experts were known for openly sharing their views on the state of the world's second largest economy. None of the affected experts responded to CNN's request for comment, and the platforms they utilizedsuch as Weibo, Douyin, and Toutiaodid not respond to CNN's inquiries regarding the reasons behind the restrictions.
The recent development occurred alongside a significant conference held earlier this month by President Xi Jinping to discuss economic goals and policies for the upcoming year. According to a summary of the meeting released last week, the ruling Communist Party determined that it should "strengthen economic communication and shape public opinion to promote a positive portrayal of the potential of the Chinese economy."
The national security ministry, a body that has gained increased importance during Xi's 11-year tenure, has also intensified efforts to suppress negative outlooks on China's economic future, particularly from individuals with "ulterior motives." In a statement last week, it stated that disparaging the economy would disrupt market expectations and hinder growth, posing a threat to security.
According to Willy Lam, a senior fellow at the Washington-based think tank, the Jamestown Foundation, the Xi Jinping leadership is at a loss as the economy spirals downwards. Rather than addressing the issue, the response is to silence or discredit those who bring positive news. Lam also noted that Beijing is concerned that spreading negative sentiments will worsen consumer confidence.
Chinese policymakers are currently facing the challenge of deflation, with consumer prices experiencing the largest drop since the height of the pandemic three years ago in November, indicating a decrease in domestic demand. Analysts have also expressed concerns about the lack of transparency in the Chinese economy potentially discouraging global investors. Recent data from the Ministry of Commerce revealed that foreign direct investment in China dropped to its lowest level in almost four years in November.
Who has been censored?
"As the Chinese government continues to censor critical economic analysis of China, it only increases concerns among Western investors about the state of the Chinese economy," stated Steve Tsang, a professor and director of the China Institute at SOAS University of London.
Chinese stock markets have been among the worst performers globally this year, with the benchmark Shanghai Composite Index falling by 5.7% and the tech-heavy Shenzhen Component Index losing 16%. Individuals currently facing social media restrictions include Dan Bin, chairman of Shenzhen-based FEOSO Arbor Investment Management; Liu, a professor and director of the Capital Finance Institute at China University of Political Science and Law; Hong Rong, a stock market commentator and analyst; and Ge Long, founder of investment research firm Gelonghui.
Liu was involved in the drafting of China's Securities Law in the 1990s. In earlier videos, still accessible on his social media accounts, he linked the consistent underperformance of the Chinese stock market to deficiencies in the system. "There needs to be a transformation in our Securities Regulatory Commission and regulatory framework," he stated.
In a NetEase forum speech on December 1, Liu urged the general public to avoid investing in Chinese stocks until these issues were addressed. No videos or comments have been posted by him since December 5 on Toutiao and Douyin, and he did not respond to CNN's request for comments.
This picture shows the screengrabs of the verified social media accounts of two analysts, who are banned on Chinese social media.
Toutiao
Well-known stock market commentator Hong Rong has been banned from posting on Toutiao, although his previous posts are still accessible. Prior to the ban, he frequently discussed the stock market and the government's unsuccessful attempts to revitalize it. His Toutiao account now shows a message stating, "This user has been banned from posting due to violation of relevant rules." Additionally, he has not made any posts on Weibo since early December.
Less transparency
His previous posts are still visible. "I'm reminding myself: be more rigorous in your speech. Do not stir up trouble… do not encourage anxiety," he stated in a Weibo post on Dec. 6, which was his last post. In the comment section, when asked whether he had been warned, he replied, "oh you saw it."
There have always been doubts about the accuracy of certain Chinese economic data. However, it is becoming more difficult to monitor the economy as Beijing restricts access to important economic statistics and targets consulting firms that provide guidance to international investors. In August, China ceased releasing data on youth unemployment after the rate reached record highs for three months in a row.
Beijing has initiated a broad crackdown on international consultancy and due diligence firms, such as Mintz Group, Bain & Co., and Capvision, under the guise of national security, causing concern among the foreign business community. Analysts say this reflects Beijing's insecurity about the struggling economy.
"This marks the first instance in recent history where a high-level economic conference has called for the reinforcement of positive ⦠propaganda," Lam stated, in reference to the minutes of the CEWC.
"It also indicates the concern of Xi and his senior officials that if the economy continues to decline, it may have an impact on national security," he further commented.
Tsang acknowledged that there could be occasions where the Chinese government may need to intervene to address negative perceptions of the economy's health. He explained, "During periods of economic weakness and underperformance, pessimistic attitudes could potentially exacerbate the situation and further weaken the economy."
"Such intervention reflects a government feeling vulnerable or seeing the economy as weak and/or heading in the wrong direction."
Scaring away investors
Xi's promise to improve China's appeal to investors may fail due to the suppression of opposing perspectives. According to Tsang, the government's increased control over economic discussions might deter foreign capital rather than attract it.
Concerns about the lack of transparency in data have already had a negative impact on the economy. In November, the primary indicator of foreign investment in China dropped by 19.5% to 53.3 billion yuan ($7.5 billion) compared to the previous year, as reported by the Ministry of Commerce on Tuesday and calculated by CNN.
Lam stated, "We are observing a troubling pattern. Multinational companies will only choose to either enter or remain in China if they can rely on accurate information regarding the economic status, price levels, unemployment rates, and overall economic decision-making."
However, there are concerns among analysts that Beijing may increase its restrictions on information, particularly if the economy deteriorates to a level seen as endangering the survival of the regime.
Frank Xie, a business professor at the University of South Carolina Aiken, stated that the party is willing to take whatever actions necessary to stay in power. He also noted that they have become adept at manipulating the media, public opinion, and expectations to hide the real state of the economy.
