China’s top intelligence agency issued an ominous warning last month about an emerging threat to the country’s national security: Chinese critics of the economy.
In a series of publications about his WeChat official accountThe Ministry of State Security implored citizens to understand President Xi Jinping’s economic vision and not be swayed by those who sought to “denigrate China’s economy” by “false narratives.” To combat this risk, the ministry said, security agencies will focus on “strengthening economic propaganda and public opinion guidance.”
China is intensifying its repression as it struggles to regain the dynamism and rapid economic growth of the past. Beijing has censored and sought to intimidate renowned economists, financial analysts, investment banks and social media influencers for their bearish assessments of the economy and government policies. Additionally, news articles about people experiencing financial difficulties or the low standard of living of migrant workers are being removed.
China has continued to offer an optimistic outlook for the economy, noting that it beat its 5 percent economic growth forecast last year without resorting to costly and risky stimulus measures. However, beyond the numbers, its financial industry is struggling to contain huge amounts of local government debt, its stock market is faltering and its real estate sector is in crisis. China Evergrande, the high-profile developer with debt of more than $300 billion, was ordered into liquidation on Monday.
The new information campaign has a broader reach than the usual work of government censors, who have always closely monitored online conversations about the economy. Their efforts now extend to mainstream economic commentary that was permitted in the past. The involvement of security agencies also underscores the ways in which commercial and economic interests fall under Xi’s increasingly broad view of what constitutes a threat to national security.
In november, the ministry of state security, calling himself “Strong guardians of financial security,” they said other countries were using finance as a weapon in geopolitical games.
“Some people with ulterior motives are trying to stir up trouble and profit from the chaos,” the ministry wrote. “These are not just ‘bears’ and ‘short sellers.’ “These market pessimists are trying to shake the international community’s investment confidence in China and trigger domestic financial turmoil in our country.”
Over the past year, China has targeted consulting and advisory firms with foreign ties through raids, detentions and arrests. These firms, which helped companies evaluate investments in the country, have become collateral damage in Xi’s attempt to bolster national security. Such efforts to stem the flow of information, restrict the release of unfavorable economic data and limit critical financial speech appear only to deepen the concerns of foreign investors and companies about the true state of China’s economy.
“In my opinion, the more the government suppresses negative information about the economy, the less confidence people have in the real economic situation,” said Xiao Qiang, a research scientist at the School of Information at the University of California, Berkeley.
New foreign investment in China fell 8 percent in 2023 to its lowest level in three years. China’s CSI 300 index, which tracks the largest companies listed in Shanghai and Shenzhen, fell 12 percent last year, compared with a 24 percent gain in the S&P 500. The Chinese index is down another 5 percent this year to near five-year lows.
Premier Li Qiang on Monday called for more effective measures to stabilize the stock market amid reports of a possible bailout package for the stock market.
Xiao, the research scientist, said he began to notice in the second half of 2023 that Chinese censors were faster at removing many financial news articles. Among them: a December article on the financial news site Yicai that cited research claiming that 964 million Chinese earned less than $280 a month.
This month, a NetEase News documentary about migrant workers enduring extremely low standards of living was also removed from the internet. Search results for the documentary “Working Like This for 30 Years” were also restricted on Weibo, a social media site similar to X.
Since June, Weibo has restricted the posting of dozens of accounts after it said they “posted comments that spoke ill of the economy” or “distorted” or “slandered” China’s economic, financial and real estate policies.
Weibo warned users in November not to be “maliciously pessimistic” about the economy or spread negative sentiments. Last month, the company said it hoped users would help “increase confidence” in the development of the economy.
Other social media services are also taking steps to censor negative speech about the economy. Douyin, the Chinese version of TikTok, has specific rules prohibiting “malicious interpretation of policies related to the real estate sector.”
Liu Jipeng, dean of the China University of Political Science and Law in Beijing, was banned from posting or adding new followers on Douyin and Weibo last month after he said in an interview that it was not the right time to invest money in Actions. He also wrote on Weibo, where he has more than 500,000 followers, that it was difficult for ordinary people to invest safely because there were many unethical institutions. His Douyin account, where he has more than 700,000 followers, stated that the user “is banned from being followed due to a violation of community rules.”
Banks and securities firms are also under intense scrutiny for the content of their economic research. In June, the Shenzhen Securities Regulatory Bureau warned China Merchants Securities, a Shenzhen-based brokerage, on a “carelessly crafted” report a year earlier warning that domestic stocks would remain under pressure due to the economy.
In July, Goldman Sachs sparked a selloff in Chinese banking stocks after one of its research reports rated three major lenders a “sell” and warned that the banks could struggle to maintain dividends due to debt losses from local governments. The Securities Times, a state-run financial newspaper, responded by saying that the report was based on a “misinterpretation of facts” and that “it is not advisable to misinterpret the fundamentals of Chinese banks.”
An economist at a foreign securities firm said a Chinese government official had recently asked him to be “more thoughtful” when writing research reports, especially if the content could be interpreted negatively. The economist asked not to be identified for fear of reprisals.
Even comments that were once acceptable have become problematic in light of China’s current economic challenges.
In a 2012 interview, a year before Xi took power, Wu Jinglian, a famous Chinese economist, warned that the country was at a turning point. He said China could move forward with a market economy governed by law, or it could be influenced by those seeking an alternative agenda of strong government involvement.
China’s social problems, Wu said in the interview, “are fundamentally the result of incomplete economic reforms, a serious delay in political reforms, and intensified administrative power to suppress and interfere with legitimate private economic activities.”
The interview was republished last year to mark the 45th anniversary of China opening up its economy. It was widely shared and called a rebuke of Xi’s economic policies (which have pushed for greater state control at the expense of market reforms) before it was removed from WeChat.
But the pressure campaign has intensified so much that it is turning some who usually defend Beijing’s policies into critics. Hu Xijin, an influential commentator and former editor-in-chief of Global Times, a Communist Party newspaper, wrote on Weibo that the job of influencers was to “constructively help” the government identify problems, “rather than covering them up.” actively and create problems.” public opinion that is not real.”