China expelled a well-known financial writer and two of his colleagues from the social media site Weibo after they made remarks regarding the nation’s stock market and unemployment rate.
Weibo, a platform owned by Sina Corp., said on Monday that Wu Xiaobo and two other authors who weren’t fully identified “attacked and undermined” Chinese policies and disseminated “negative and harmful information.”
Wu is one of China’s top financial bloggers and has 4.7 million followers on the Twitter-like social media platform. He has written successful books on Tencent Holdings Ltd. and China’s economic revolution and frequently contributes to Caixin Global. The ban is still being determined because his most recent posts have been removed.
At a time when the outlook for investing could be better, the bans are likely to raise concerns among foreign investors about having access to unbiased information on Chinese businesses and the economy.
The state of China’s financial markets appears fragile. The domestically listed stock index CSI 300 has fallen over 4% in the last four trading days and is down for the year, extending a 22% decline in 2022. As trade reopened after a holiday, the yuan fell as much as 0.9% versus the dollar, which was not seen in seven months.
While Chinese financial data providers like Wind Information Co. recently ceased supplying specific data on domestic companies to offshore clients, China has cracked down on the nation’s web of “expert networks” relied upon by hedge funds and others for their expertise.
The government has a history of using drastic measures to support stock market sentiment. When a bubble broke in 2015, authorities prohibited significant stockholders from selling their shares, restricted short sales, and ordered state funds to invest in stocks.
China launched a two-month effort in 2021 to target social media accounts and commercial platforms that shared financial information deemed detrimental to the economy.
Other controversial commenters have previously had their social media accounts suspended. Ren Zeping, a well-known economist, was banned from Weibo in January of last year after making posts encouraging the central bank to generate money to pay for birth-incentive subsidies.
Following pessimistic projections about the nation in the middle of 2022, analyst Hong Hao’s public social media accounts were suspended for an undisclosed number of infractions. The China strategist soon quit Bocom International Holdings, where he had been employed for ten years.
Youth unemployment is rising due to China’s assault on the private sector and the country’s weak economic growth. In May, the unemployment rate for people between 16 and 24 was 20.8%. This adds to the damage done to customer confidence over the years by the Covid Zero policy.
According to official figures released this weekend, domestic travel spending during the recent holiday for the dragon-boat festival was less than before the outbreak. The number of homes sold is lower than in recent years, while projections for June’s automobile sales showed a decline from a year earlier.
