Hong Hao: China Silences Leading Market Analyst As Economic Recession Deepens

Hong Kong
CNN Business

Chinese social media has shut down the accounts of a prominent market analyst who has drawn attention in recent weeks to the dramatic slowdown in the country’s economy and the effects of government policy on the tech industry.

Over the weekend, Tencent’s (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 the fifth largest in China. China.

The move came after he posted about huge capital outflows from the country and made dovish forecasts about the Chinese stock market on social media.

“All content has been blocked. The user is prohibited from using the account,” read a notice posted on the WeChat account. He added that the account had “violated” the government’s internet rules, without elaborating. He also did not specify which post had led to the suspension.

Hong’s Weibo (WB) account, which had more than 3 million followers, was also removed. A CNN Business search of the account resulted in a message saying the user “no longer exists.”

Covid lockdowns have taken a heavy toll on the world’s second largest economy. The latest government survey data, released on Saturday, shows activity in manufacturing and services slumping to their lowest level since February 2020.

Beijing’s zero-covid policy, coupled with a crackdown on Big Tech, a real estate slump and risks related to Russia’s war in Ukraine, have triggered unprecedented capital flight by foreign investors in recent months. The yuan recently fell to its lowest level in 17 months.

Chinese leaders have given repeated assurances in recent days on how to fix the economy. President Xi Jinping on Tuesday called for a wave of infrastructure spending 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 did not respond either.

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

Shan Weijian, founder and chairman of Hong Kong-based private equity firm PAG, recently criticized the government for policies that have resulted in a “profound economic crisis,” according to the Financial Times, citing comments he made at a meeting with brokers. . PAG did not respond to a request for comment.

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

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

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 cracked down on internet postings it deems detrimental to the economy.

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

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

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

Hong warned in those reports about foreign investors dumping Chinese stocks and drew attention to the most severe capital outflow since the pandemic began. He also blamed China’s tech crackdown, rather than new US rules on foreign company listings, for being behind a Chinese ADR sell-off in March.

In another note on 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 sparked fears the Chinese capital could join Shanghai and other major cities in the lockdown.

China’s stock market is the second worst performer in the world so far this year, behind Russia, according to Refinitiv Eikon.

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