China's restrictions on public access to economic and corporate data are confusing traders and could hurt China's attempts to return to strong growth, experts say.
“In any business environment, including China, businesses need information to make informed decisions. Unreliable or unreliable information creates uncertainty and “It will test their risk tolerance,” said James Zimmerman, a partner in the Beijing office of law firm Perkins Coie and former president of the China-American Chamber of Commerce.
Regulations pushed by President Xi Jinping and top leaders have left investors even more in the dark than usual. “I just trade based on what people I know, especially people within the tech community, are talking about,” said Wu Ming, a hairstylist in Beijing. He trades Chinese stocks on his cell phone when the salon is busy.
“There are no other reliable sources,” he said.
The trend toward less transparency extends beyond corporate and economic data. “In recent years, many data series have been obsolete or have undergone revisions that make historical comparisons difficult or simply produce unbelievable numbers,” said Christopher, deputy director of China research at Gabekal Dragonomics. Bedore said. This includes the structure of the region, the amount of fixed asset investment in the region, the number of deaths, etc.
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“Uncertainty definitely kills confidence. This means investors need to apply a larger discount to asset prices to account for greater uncertainty,” he said. Barons.
The most notable period was over the summer, when youth unemployment soared to more than 20%, only for the statistics office to stop publishing the figures. They recently revised their methodology and resumed publishing their data, but critics remain skeptical.
Last month, Mr. Xi canceled Premier Li Qiang's press conference at the annual National Assembly. The news conference has not been missed in 30 years, and the cancellation of the forum for investors to learn more about the country's policy direction was unusual as the president continues to micromanage the world's second-largest economy. .
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Mr. Li, China's second-most powerful leader, did not take questions and would not take questions during the remaining five years of his term, except in “special circumstances,” official spokesman Lou Qinjian said. . The scrapping has heightened public scrutiny of the Communist Party's restrictions on access to information.
Investors have long complained that they lack hard enough data to trade with confidence. In 2023, the large-cap CSI300 index fell to its lowest since 2019, and the benchmark Shanghai Composite Index also hit its lowest intraday price since 2019.
Behind the market crash and tightening of information restrictions, there were a series of policy moves. In August, China's securities regulator announced a series of measures aimed at restoring momentum, including proposals to cut transaction costs, support share buybacks and encourage long-term investment.
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In the coming months, China will halve stamp duty on stock transactions, securities regulators will increase oversight of programmatic trading, and dozens of listed companies will announce stock buybacks or buyback plans, likely due to China's It appears that the government has heeded the call for market support.
Then, in November, the Beijing Exchange banned the sale of stocks to major shareholders in listed companies, and in January, the Chinese cabinet injected money into the capital market. Regulators also tightened restrictions on stock lending and borrowing, and central banks eased monetary policy.
The data trickle continued and policy did not cause a market correction until February, when the trend started to pick up and now appears to have plateaued.
“As concerns about the quality and availability of official data continue to grow, it is more important than ever to not just take the government at face value,” said Leland Miller, CEO of China Beige Book. Barons. “Ever since China's economic slowdown started accelerating significantly, getting an honest picture of the economic situation was always destined to be difficult. Just as the cost of getting the story wrong for investors has doubled. ”
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