Rewritten Article:
Chinese Economists Silenced on Social Media: A Growing Concern for Investors
Recently, several prominent Chinese economists and financial analysts have seen their social media accounts curtailed, preventing them from posting new content or gaining new followers. Among these individuals is Liu Jipeng, a Chinese government adviser who recently urged private investors to avoid the stock market. Since mid-December, Liu has remained silent on his social media accounts, and his followers can no longer follow him.
It appears that Liu's account has been banned from various Chinese social media platforms, including Douyin and Toutiao. When CNN attempted to follow his accounts on these platforms, they were met with messages stating that the user's account had been disabled due to violations of platform rules.
Social media censorship in China has long been known for silencing critics. Previously, these analysts were well-known for their frank opinions about the state of China's second-largest economy. None of the affected analysts responded to CNN's request for comment, and the social media platforms themselves did not respond to CNN's questions, either about the reasons for the restrictions.
The clampdown on these analysts comes at a time when China's ruling party held a major meeting to discuss economic goals and policies for the following year. A recently published meeting transcript revealed that the party aims to strengthen economic propaganda and boost public support for the Chinese economy.
The Ministry of State Security, a department that has grown in importance during President Xi Jinping's tenure, has also stepped up its efforts to dispel pessimistic views about China's economic future, especially those with ulterior motives. In a recent statement, the ministry warned that a poor representation of the economy could threaten national security by distorting market expectations and hampering growth.
"The economy is in chaos, and Xi Jinping's administration has no idea what to do ... so the response is to 'kill the messengers of good news' or simply silence them," Ho-Lee Lam, a senior fellow at The Jamestown Foundation, a think tank based in Washington D.C., said.
"Beijing is concerned that more critics who spread negative sentiment will further erode consumer confidence," Lam added.
Additionally, China's political decision-makers are currently grappling with the threat of deflation. Consumer prices fell significantly in November, marking the sharpest decline since the pandemic peaked a few years ago, indicating weak domestic demand.
Analysts also contend that the lack of transparency in China's economy could further deter global investors. The latest data from China's Ministry of Commerce showed that the main indicator for foreign direct investment into China reached its lowest level in nearly four years in November.
"The more the Chinese government scrutinizes critical economic analysis of China, the more worried western investors will become about the state of the Chinese economy," Steve Tsang, professor and director of the China Institute at the SOAS University of London, said.
Who Else is Affected?
Since the beginning of the year, Chinese stocks have underperformed their global counterparts, with the Shanghai Composite Index falling by 5.7%, and the Shenzhen Composite Index plummeting by 16%.
Among the groups currently facing restrictions on social media platforms are Dan Bin, the chairman of Shenzhen FEOSO Arbor Investment Management; Liu, a law professor at China University of Political Science and Law and director of the Institute of Capital Finance; Hong Rong, a stock market commentator and analyst; and Ge Long, the founder of investment research firm Gelonghui.
Hong Rong, a well-known stock market commentator, was recently banned from posting on Toutiao, although his earlier posts remain visible. Since then, his Toutiao account displays the message "This user has been prohibited from posting due to violations of relevant regulations." He has not posted on Weibo since early December.
Much of Hong Rong's earlier posts focused on criticizing the government's efforts to revive the stock market. Now, his Toutiao account shows only the following message: "This user's posting privileges have been suspended due to violations of relevant regulations."
Lack of Transparency
There has long been suspicion over the reliability of certain Chinese economic data. However, it has become increasingly difficult to monitor China's economy as the government restricts access to essential economic statistics and targets consulting firms that help global investors make informed decisions about China.
In August, China stopped publishing data on youth unemployment, after it hit record highs for three consecutive months. Peking has also intensified its crackdown on international consulting and due-diligence firms such as Mintz Group, Bain & Company, and Triumph Group, causing widespread concern within the global business community.
"This is the first high-level economic meeting in a long time to publicly call on strengthening active propaganda and public opinion management," Carrie Lam, a Chinese government spokesperson, said following the meeting's results.
"It reflects the concerns of Xi Jinping and other high-ranking officials that national security may be at risk if the economy continues to decline," Lam added.
Tsang said that on occasion, it may be necessary for the Chinese government to intervene to counter negative rhetoric about the economy, as a deteriorating economy could foster public discontent.
"If the economy is weak and not performing well, negative perceptions of the economy could further weaken it," Tsang said.
"Interventions like these reflect the Chinese government's sensitivity to negative sentiment and the belief that the economy is weak or going in the wrong direction," he added.
Impact on Foreign Investment
Despite President Xi Jinping's pledge to make China an attractive destination for foreign investment, the suppression of criticism may have unintended consequences.
"I believe that the stricter control of the Chinese government over economic development may deter foreign investment instead of calm investors", Zeng said.
"Instead of reassuring investors, alarm bells have sounded," Zeng added.
Concerns about non-transparent data have already had an impact on the economy, adding to existing challenges.
A crucial indicator of foreign direct investment into China fell by 19.5% in November compared to the previous year, according to calculations based on data released by the Ministry of Commerce on Tuesday.
"We are experiencing a vicious circle," Lin said. "Multinational corporations will only invest in China or stay in it if they have reliable information about the economic situation, pricing, unemployment rate, and overall economic decisions."
Some analysts fear that the Chinese government may further tighten its grip on information, especially if the economic situation worsens to a point where it is perceived as a threat to the regime's survival.
"This party will do anything to stay in power," Frank Hsieh, a professor at the Business School at the University of South Carolina Aiken, said.
"The control of the media, the control of public opinion, and the control of expectations have become standard practices for them when it comes to masking the true nature of the economy," Hsieh added.
Enrichment Data:
- Chinese government censorship of economists and financial analysts who criticize the government is not new. In fact, it is widely believed that this has been a long-standing practice to maintain control over public opinion, protect state interests, and ensure economic development within a controlled environment.
- The Chinese government's approach to censorship includes control of public opinion, protection of state interests, economic development, and protectionism. This has both positive and negative impacts, as it allows domestic companies to grow within a controlled environment while also potentially deterring foreign investment and limiting transparency.
- Depending on the severity of the criticism, analysts may be banned from social media platforms, lose their jobs, or even face legal consequences for their statements. This can have significant consequences for their personal and professional lives, as well as for the integrity of the economic data and analysis in China.
- The Chinese government's approach to censorship has raised concerns internationally about the country's commitment to free speech, transparency, and the rule of law. These concerns have affected its ability to engage in global cooperation and attract foreign investment, as well as its global reputation.
- The Chinese government's approach to censorship is also viewed in the context of digital sovereignty, or its ability to control and shape online discourse within its borders. This can be seen as a reflection of China's unique political and cultural context, as well as its broader ambitions for global power and influence.
