Hong Hao: China turns a prominent market analyst into silence as the economic downturn deepens

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

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

Hong̵[ads1]7;s account on Weibo (WB), which had more than 3 million followers, has also been removed. A search by CNN Business for the account resulted in a message stating that the user “no longer exists”.

Covid shutdowns have hit the world’s second largest economy hard. The latest data from the government survey – published 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 crackdown on Big Tech, a decline in real estate and risks associated with Russia’s war in Ukraine, has triggered a unique flight of capital from foreign investors in recent months. The yuan recently plunged to its lowest level in 17 months.
Hao Hong, Chief Strategist of Bocom International Holdings Co., speaks at the Bloomberg Year Ahead Asia Conference in Jakarta, Indonesia, on Wednesday, December 6, 2017.
Chinese leaders have given repeated assurances in recent days to fix the economy. On Tuesday, President Xi Jinping called for investment in infrastructure to promote 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 for 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.
Foreign investors leave China.  Russia's war is the last trigger

Chinese regulators have stepped up their investigation of social media amid growing public dissatisfaction with Covid shutdowns in the country.

In an effort to reduce people’s anonymity online, Weibo told users on Thursday that they would start publishing IP placements on their account pages and when posting comments, in an effort 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 breakdown of Internet records that it considers harmful to the economy.

in Tencent the accounts had come up with bearish calls for financial markets, “distorted” the interpretation of economic policy or spread rumors. A public account run by Chen Guo, chief strategist at Shenzhen-based Essence Securities, was among them.

Likely trigger for the ban on social media?

It is not entirely clear which of Hong Hao’s posts triggered the latest ban.

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

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Hong warned in these reports about foreign investors dumping Chinese stocks and drew attention to the most serious capital flow since the pandemic began. He also accused China’s technical breakdown, rather than new US rules for listing 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 growing Covid-19 cases in Beijing sparked fears that the Chinese capital could join Shanghai and other major cities in lockdown.

China’s stock market is the second worst in the world so far this year, behind Russia, according to Refinitiv Eikon.

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