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

Hong Kong
CNN Business

Chinese social media has closed the accounts of a prominent market analyst who in recent weeks drew attention to the dramatic slowdown in the country’s economy and the effects of government policies on the technology industry.

Over the weekend, Tencent’s (TCEHY) WeChat Hong Hao’s public account, CEO and head of research at BOCOM International, the investment banking division of Bank of Communications, a state-owned bank and China’s fifth largest, froze.

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

“All content has been blocked. The user is prohibited from using the account,” said a message on the WeChat account. It added that the account had “violated” the government’s internet rules without going into detail. It also did not specify which position had led to the suspension.

Hong’s account on Weibo (WB), which had more than 3 million followers, has also been removed. A CNN Business search for the account resulted in a message stating that 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 that activity across production and services has fallen to its lowest level since February 2020.

Beijing’s zero-Covid policy, combined with a repression of Big Tech, a property decline and risks related to Russia’s war in Ukraine, has triggered an unprecedented capital flight from foreign investors in recent months. The yuan recently fell to its lowest level in 17 months.

Hao Hong, Chief Strategist at Bocom International Holdings Co., speaks at the Bloomberg Year Ahead Asia Conference in Jakarta, Indonesia, on Wednesday, December 6, 2017.

Chinese leaders have in recent days given repeated assurances to rectify the economy. President Xi Jinping on Tuesday called for infrastructure spending to boost 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 resulted in a “deep 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 investigation 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 publishing IP locations on their account pages, and when they post comments, in an attempt to combat “bad behavior.”

Chinese technology giants have cracked down on people with negative comments about the economy since last year. In October, Tencent suspended more than 1,400 WeChat accounts after the government launched a repression of Internet posts that it considers detrimental to the economy.

said Tencent that accounts had made bearish calls about financial markets, “distorted” the interpretation of economic policies or spread rumors. 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 latest ban.

The latest reports posted on his WeChat public account were titled: “Beware of Capital Flight” and “What Should Chinese ADRs Care About.” ADRs are securities issued by Chinese companies listed in the United States.

Hong warned in these reports of foreign investors dumping Chinese stocks, drawing attention to the most severe capital outflow since the pandemic began. He also accused China’s technical repression, rather than new US rules on listing of foreign companies, of being behind an epic sale of Chinese ADRs 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 lockdown.

China’s stock market is the second-best-performing in the world so far this year, after Russia, according to Refinitiv Eikon.

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