Hong Hao: China silences prominent market analyst as economic crisis deepens

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During the weekend, ten cents (TCEHY) WeChat froze the public account of Hong Hao, managing director and head of research at BOCOM International, the investment banking arm of Bank of Communications, a state-owned bank and China’s fifth largest.

“All content has been blocked. User is prohibited from using the account,” reads a notice posted on the WeChat account. He added that the account had “violated” government internet rules, without going into specifics. He also did not specify which position led to the suspension.

Hong’s account on Weibo (BM), which had more than 3 million followers, was also deleted. A search by CNN Business for the account resulted in a message that the user “no longer exists”.

Covid lockdowns have weighed heavily on the world’s second largest economy. The latest government survey data – released on Saturday – shows activity in manufacturing and services falling to its lowest level since February 2020.

Beijing’s zero-Covid policy, coupled with a Big Tech crackdown, a real estate slump and risks from Russia’s war in Ukraine, has sparked unprecedented capital flight from foreign investors in recent months. The yuan recently plunged to its lowest level in 17 months.
Chinese leaders have repeatedly reaffirmed in recent days that they are fixing the economy. President Xi Jinping on Tuesday called for an infrastructure spending spree to promote growth. And the Communist Party’s Politburo on Friday promised “specific measures” to support the internet economy.

Hong and BOCOM International did not respond to requests for comment on the social media suspensions. Weibo also did not respond.

He is not alone in expressing growing concern about the health of the Chinese economy and markets.

Shan Weijian, founder and chairman of Hong Kong-based private equity firm PAG, recently criticized the government for policies that have led to a “deep economic crisis”, according to the Financial Times, citing comments he made in a meeting with brokers. PAG did not respond to a request for comment.
Foreign investors are abandoning China.  Russia's war is the latest trigger

Chinese regulators have stepped up their scrutiny of social media amid growing public discontent over Covid lockdowns in the country.

In a bid to reduce people’s online anonymity, Weibo told users on Thursday that it would start publishing IP addresses on their account pages and when they post comments, in a bid to combat “bad behaviours”.

Chinese tech giants have been cracking down on people making negative comments about the economy since last year. In October, Tencent suspended more than 1,400 WeChat accounts after the government launched a crackdown on internet postings it deems harmful to the economy.

Tencent said the accounts had made bearish calls on financial markets, “distorted” the interpretation of economic policies or spread rumors. A public account managed by Chen Guo, chief strategist of Shenzhen-based Essence Securities, was among them.

Likely trigger for the social media ban?

It’s not entirely clear which of Hong Hao’s posts triggered the most recent ban.

The latest reports posted on its WeChat public account were titled: “Beware of capital flight” and “What should Chinese ADRs be worried about.” ADRs are securities issued by Chinese companies listed in the United States.

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Hong warned in the reports against foreign investors dumping Chinese equities and drew attention to the most serious capital outflow since the start of the pandemic. He also blamed China’s tech crackdown, rather than new US rules on foreign company listings, as behind an epic sell-off in Chinese ADRs in March.

In another note from March 21, Hong also predicted that the Shanghai Composite would fall below 3,000 points.

Last Monday, the Shanghai Composite fell below 3,000 for the first time in 21 months, as rising Covid-19 cases in Beijing raised fears that the Chinese capital could join Shanghai and other major cities. in confinement.

According to Refinitiv Eikon, the Chinese stock market is the second worst in the world so far this year, behind Russia.

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