Some of China’s most prominent analysts have been subjected to social media restrictions that appear designed to restrict their ability to comment on the country’s ailing stock markets and struggling economy.

At least six analysts are unable to upload new posts or gain new followers on popular social networking platforms, according to their account pages reviewed by CNN.

One of them is Liu Jipeng, an advisor to the Chinese government, who recently asked retail investors in the country to refrain from investing in the stock market. He has not posted on social media since early December and users can no longer follow his accounts.

When CNN tried to follow his accounts on short-video app Douyin and news aggregator app Toutiao, it saw the following statement: “This user can’t be followed due to violations of the platform’s rules.”

Chinese social media is known to silence critics. Before being curtailed, these business experts were known to air candid views on the state of the world’s second largest economy.

None of the experts affected responded to CNN’s request for comment. And the platforms they used — including Weibo, Douyin and Toutiao — did not respond to CNN’s questions, including the reason behind the restrictions.

The development coincided with a major conference hosted earlier this month by President Xi Jinping to discuss economic targets and policies for next year. According to a readout of the meeting released last week, the ruling Communist Party decided that it should “strengthen economic propaganda and public opinion guidance and promote a positive narrative about the bright prospects of the Chinese economy.”

The national security ministry — a body that has gained further importance during Xi’s 11 years in power — has also stepped up efforts to quash pessimistic opinions about China’s economic future, especially from those who have “ulterior motives.” In a statement last week, it said that badmouthing the economy would disrupt market expectations and hurt growth, thus jeopardizing security.

“The economy is in a tailspin and the Xi Jinping leadership is clueless… So the response is ‘to kill the messenger that brings the good news’ or just to keep them quiet,” said Willy Lam, senior fellow of the Jamestown Foundation, a Washington-based think tank.

“Beijing fears that more naysayers spreading negative sentiments will further drive down confidence of consumers,” he said.

Among other headaches, Chinese policymakers are now grappling with the threat of deflation. Consumer prices witnessed their biggest fall since the depths of the pandemic three years ago in November, suggesting weakening domestic demand.

But lack of transparency on the Chinese economy might deter global investors further, analysts said. Fresh data from the Ministry of Commerce showed that the main measure of foreign direct investment into China fell to its lowest level in nearly four years in November.

“The more the Chinese government censor critical economic analysis of China, the more Western investors worry about the state of the Chinese economy,” said Steve Tsang, a professor and director of the China Institute at SOAS University of London.

Who has been censored?

The Chinese stock markets are among the worst performers in the world this year. The benchmark Shanghai Composite Index has fallen 5.7%, while the tech-heavy Shenzhen Component Index has lost 16%.

The group now facing restrictions on social media 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 helped draft China’s Securities Law in the 1990s.

In previous videos, which are still available on his social media accounts, he attributed the persistent weakness of the Chinese stock market to flaws in the system. “Our Securities Regulatory Commission and our regulatory system must change,” he said.

In a speech at a NetEase forum on December 1, Liu asked ordinary people to refrain from investing in China’s stocks until these issues were fixed. He has not posted any video or comment since December 5 on Toutiao and Douyin, and did not respond to a request for comment from CNN.

Hong Rong, a well-known stock market commentator, is currently banned from posting on Toutiao, although his previous posts can still be seen.

Before being censored, he posted almost daily about the stock market and the government’s failed efforts to revive it. His Toutiao account now displays the following message: “This user has been banned from posting due to violation of relevant rules.” And he has not posted anything on Weibo since early December.

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 said in a Weibo post on Dec. 6, his last post. In the comment section, when asked whether he had been warned, he said, “oh you saw it.”

Less transparency

There have long been questions about the reliability of some Chinese economic data. But the economy is becoming increasingly hard to track as Beijing curbs access to some key economic statistics and cracks down on consultancy firms that help global investors make decisions about China.

In August, China stopped publishing youth unemployment data after the rate hit historic highs for three consecutive months.

Beijing has also launched a sweeping clampdown on international consultancy and due diligence firms, including Mintz Group, Bain & Co. and Capvision, in the name of national security, sending a chill across foreign business community.

This highlights how vulnerable Beijing feels about the weak economy, analysts said.

“It is the first time in recent memory that a top level economic conference [issued] a call for strengthening positive … propaganda,” Lam said, referring to the readout of the CEWC.

“This also reflects fear on the part of Xi and his top colleagues that if the economy continues to tank, national security might be affected,” he added.

Tsang said there may be times when intervention by the Chinese government to counter negative narratives about the health of the economy becomes necessary.

“When the economy is weak and underperforming, negative views of the economy can potentially tip the balance and drive the economy down further,” he said.

“Such intervention reflects a government feeling vulnerable or seeing the economy as weak and/or heading in the wrong direction.”

Scaring away investors

Although Xi has vowed to make China an attractive investment destination, the silencing of critical views may backfire.

“I think the Chinese government’s tightening of control over the narrative over the economy is likely to have the opposite effect [of attracting foreign capital].  Instead of reassuring investors, it sets off alarm bells,” Tsang said.

Worries over data opacity have already weighed on the economy.

In November, the main measure of foreign investment into China fell 19.5% to 53.3 billion yuan ($7.5 billion), compared to a year earlier, according to CNN calculation based on data released by the Ministry of Commerce on Tuesday.

“We are seeing a vicious cycle,” Lam said. “Multinationals will only come or stay in China if they have access to reliable information about the state of the economy, the price levels, unemployment levels, and overall economic decision-making.”

But Beijing may further tighten its control on information, especially if the economy continues to worsen to a point perceived as threatening regime survival, some analysts fear.

“The party will do whatever they have to do to remain in power,” said Frank Xie, a professor in business at University of South Carolina Aiken.

“Controlling the media, controlling the opinion, and controlling the expectation [has] become their second nature to conceal the true nature of the economy,” he added.

 

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