In recent news from Epoch Times on December 31, 2024, it has been reported that China’s economy is suffering and stagnant despite various stimulus policies, leading authorities to strictly enforce only allowing the “singing of the bright economic discourse.” The China Securities Regulatory Commission has issued a year-end notice demanding strict control over chief economists. Regulatory requirements from multiple local securities regulatory authorities have significantly limited the space for nearly 20,000 economists and analysts to maneuver.
According to a report by the China Securities Journal on December 19, the China Securities Regulatory Commission recently issued a notice within the industry, calling for securities firms to further strengthen the management of chief economists. Chief economists are expected to adhere to the “guidelines of the Party and the state,” playing a role in guiding market expectations and enhancing investor confidence.
The notice stipulates that chief economists must report in advance, obtain approval and scrutiny before participating in various meetings, activities, and making public statements or comments on research. In cases where chief economists repeatedly engage in what is deemed “inappropriate behavior,” leading to reputation risks or severe adverse effects, securities firms are instructed to take strict measures, including possible dismissal.
Reported by Caixin on December 19, various local securities regulatory authorities have recently imposed supervision requirements on brokerages to strengthen the management of public statements, particularly from chief economists, securities analysts, fund managers, and other professionals in terms of their public discourse. They are strictly required to refrain from making statements contradicting central policies and not to test the regulatory boundaries with any form of risky behavior.
Some prominent figures who have crossed the line include Chief Economist Gao Shanwen from the China Investment Securities and Chief Economist Fu Peng from Dongbei Securities. Their discussions on economic issues during internal investment seminars have sparked heated debates, leading to the suspension of their social media accounts.
Economists are no longer allowed to freely discuss economic matters, and the fear of repercussions is not an isolated case. When asked by Voice of America for comments on the Chinese economic situation and the tightened regulatory trend, many economists declined to respond. Well-known economists like Zhang Weiying and Hu Xingdou have politely refused to comment, stating that it is not appropriate to speak out at the moment, both of whom are known for their outspokenness.
A Chinese economist, who chose to remain anonymous, informed Voice of America that the space for publicly expressing professional opinions is increasingly limited. They stated, “Sorry, I can’t say much. The unit leaders have repeatedly warned us not to express opinions contrary to official views on domestic social media platforms and especially not to accept interviews from so-called hostile foreign media.”
Another mid-level manager of a securities firm in Guangzhou expressed to Voice of America that the poor economic conditions are a reality, and sharing personal opinions at this time would only invite trouble. They mentioned having their own chief economist at the firm who carefully considers economic indicators and situations before making public statements, reports, and more. The final output is a result of balancing various interests, hence not taken too seriously.
China has nearly 20,000 economists and analysts employed by financial institutions. Their main value lies in providing analytical insights to fund managers, high-net-worth individuals, and other clients to attract them to use the services of relevant financial institutions.
An analysis by Hong Kong’s Sing Tao Daily noted that the performance of economists and analysts is difficult to “quantify,” relying on external evaluations, reputation, and influence to prove their worth. At the very least, their analytical insights ought to be perceived as “useful” or “insightful” by clients, if not being truthful. If they merely speak in general terms or blindly echo official statements, clients not only have no reason to trust them but may also find it not worth their time to listen.
The report highlights that the more economists and analysts speak the truth, the more likely they are to cross the red line. When nearly 20,000 economists and analysts all sing the same tune, how can they prove their own worth? It is no wonder that many industry insiders lament that the roles of economists and analysts are becoming increasingly dispensable, fearing they may be the first targets for downsizing and pay cuts.