
The Chinese Communist government has begun a crackdown, arresting market influencers and scrubbing the internet of negative news about the country’s markets. The Financial Times reports:
China has launched a crackdown on financial blogs and social media, a move that risks exacerbating the difficulty of obtaining reliable data about the world’s second-biggest economy.
The restrictions were implemented as fissures widened in the top echelons of Wall Street over whether investing in China was a smart bet.
A snowballing policy overhaul has caught seasoned China investors off guard, spooked markets and sparked questions over which sector would be targeted by Beijing next.
Last month the Cyberspace Administration of China embarked on a “special rectification” campaign. The internet regulator is clamping down on market sceptics and those who voice pessimistic opinions about the Chinese economy — as well as misinformation and malfeasance radiating from financial news services and social media accounts.
China-focused economists, analysts and academics acknowledged the problems caused by uninformed online commentary and rampant fraudulent activity. But they warned that over-reach from the campaign would also silence valuable voices that diverged from the official narratives promulgated by Beijing.
One veteran analyst of China’s markets, who asked not to be named, said a lack of information about the country was “absolutely” creating an environment in which miscalculation and misjudgement would become more prevalent.
“I think it’s a huge risk . . . It’s just going to make people more nervous about saying anything,” he said. “It does make me worry: are we really going to know what’s going on? Because there’s already problems with the data. And now we will have less of that on-the-ground colour.”
A Hong Kong-based investor in China bonds said the moves would further limit insights of which debt issuers are “trustworthy” because blogs and social media are at times the only places with information on company personnel changes and regulatory investigations or arrests.
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