China’s top intelligence agency issued an ominous warning last month about an emerging threat to the country’s national security: Chinese people who criticize the economy.
In a series of posts on its official WeChat account, the Ministry of State Security implored citizens to grasp President Xi Jinping’s economic vision and not be swayed by those who sought to “denigrate China’s economy” through “false narratives.” To combat this risk, the ministry said, security agencies will focus on “strengthening economic propaganda and public opinion guidance.”
China is intensifying its crackdown while struggling to reclaim the dynamism and rapid economic growth of the past. Beijing has censored and tried to intimidate renowned economists, financial analysts, investment banks and social media influencers for bearish assessments of the economy and the government’s policies. In addition, news articles about people experiencing financial struggles or the poor living standards for migrant workers are being removed.
China has continued to offer a rosy outlook for the economy, noting that it beat its forecast for economic growth of 5 percent last year without resorting to risky, expensive stimulus measures. Beyond the numbers, however, its financial industry is struggling to contain enormous amounts of local government debt, its stock market is reeling and its property sector is in crisis. China Evergrande, the high-flying developer felled by over $300 billion in debt, was ordered into liquidation on Monday.
The new information campaign is wider in scope than the usual work of the government’s censors, who have always closely monitored online chatter about the economy. Their efforts now extend to mainstream economic commentary that was permitted in the past. The involvement of security agencies also underscores the ways in which business and economic interests fall under Mr. Xi’s increasingly expansive view of what constitutes a threat to national security.
In November, the state security ministry, calling itself “staunch guardians of financial security,” said other countries used finance as a weapon in geopolitical games.
“Some people with ulterior motives try to stir up trouble and profit from the chaos,” the ministry wrote. “These are not only ‘bears’ and ‘short sellers.’ These market doomsayers are trying to shake the international community’s investment confidence in China and trigger domestic financial turmoil in our country.”
Over the last year, China has targeted consulting and advisory firms with foreign ties through raids, detainments and arrests. These firms, which helped businesses assess investments in the country, have become collateral damage in Mr. Xi’s drive to bolster national security. Such efforts to curb the flow of information, curtail the release of unfavorable economic data and limit critical financial discourse seem to only deepen the concerns of investors and foreign businesses about the true state of China’s economy.
“In my view, the more the government suppresses negative information about the economy, the less confidence people have in the actual economic situation,” said Xiao Qiang, a research scientist at the School of Information at the University of California, Berkeley.
New foreign investment in China fell 8 percent in 2023 to its lowest level in three years. China’s CSI 300 index, which tracks the biggest companies listed in Shanghai and Shenzhen, fell 12 percent last year, compared with a 24 percent gain in the S&P 500. The Chinese index is down another 5 percent this year to nearly five-year lows.
Premier Li Qiang called on Monday for more effective measures to stabilize the stock market against the backdrop of reports of a possible rescue package for the equity market.
Mr. Xiao, the research scientist, said he started noticing in the latter half of 2023 that Chinese censors were quicker to take down many financial news articles. Among them: a December article on the financial news site Yicai that cited research stating that 964 million Chinese people earned less than $280 a month.
This month, a documentary from NetEase News about migrant workers enduring extremely low living standards was also taken down from the internet. Search results of the documentary, “Working Like This for 30 Years,” were also restricted on Weibo, a social media site similar to X.
Since June, Weibo has restricted dozens of accounts from posting after, it said, they “published remarks bad-mouthing the economy” or “distorted” or “smeared” China’s economic, financial and real estate policies.
Weibo warned users in November not to be “maliciously pessimistic” about the economy or spread negative sentiments. Last month, the company said it hoped users would help “boost confidence” in the economy’s development.
Other social media services, too, are moving to censor negative speech about the economy. Douyin, the Chinese version of TikTok, has specific rules prohibiting the “malicious misinterpretation of real-estate-related policies.”
Liu Jipeng, a dean at China University of Political Science and Law in Beijing, was prohibited from posting or adding new followers on Douyin and Weibo last month after he said in an interview that it wasn’t the right time to put money into stocks. He also wrote on Weibo, where he has more than 500,000 followers, that it was difficult for ordinary people to invest safely because there were so many unethical institutions. His Douyin account, where he has more than 700,000 followers, stated that the user “is banned from being followed due to a violation of community rules.”
Banks and securities firms are also under intense scrutiny for the content of their economic research. In June, the Shenzhen Securities Regulatory Bureau warned China Merchants Securities, a Shenzhen-based brokerage, about a “carelessly produced” report a year earlier warning that domestic stocks would remain under pressure because of the economy.
In July, Goldman Sachs sparked a sell-off of Chinese bank stocks after one of its research reports put a “sell” rating on three major lenders and warned that banks might struggle to maintain dividends because of losses from local government debt. The Securities Times, a state-owned financial newspaper, struck back, saying that the report was based on a “misinterpretation of the facts” and that “it is not advisable to misunderstand the fundamentals of Chinese banks.”
One economist at a foreign securities firm said a Chinese government official had recently asked the economist to be “more thoughtful” when writing research reports, especially if the content may be construed negatively. The economist asked not to be identified for fear of reprisal.
Even once acceptable commentary has become problematic in light of China’s current economic challenges.
In a 2012 interview, a year before Mr. Xi assumed power, Wu Jinglian, a famous Chinese economist, warned that the country was at an inflection point. He said China could move forward with a market economy ruled by law, or it could be swayed by those who sought an alternative agenda of heavy government involvement.
China’s societal problems, Mr. Wu said in the interview, “are fundamentally the result of incomplete economic reforms, serious lag in political reforms and intensified administrative power to suppress and interfere with legitimate private economic activities.”
The interview was reposted last year to mark the 45th anniversary of China’s opening up its economy. It was widely shared and called a rebuke of Mr. Xi’s economic policies — which have pushed for greater state control at the expense of market reforms — before it was taken down from WeChat.
But the pressure campaign has intensified so much that it is turning some who are usually defending Beijing’s policies into critics. Hu Xijin, an influential commentator and a former editor in chief of Global Times, a Communist Party newspaper, wrote on Weibo that it was the job of influencers to “constructively help” the government identify problems, “rather than actively covering them up and creating public opinion that is not real.”
