China International Capital Corp. has reportedly prohibited its analysts from making negative remarks about the country’s economy or markets, according to sources cited by Bloomberg. The ban, outlined in an internal memo to the bank’s research department, covers both private and public conversations.
Employees are also instructed to refrain from displaying luxury items and disclosing their compensation. This move aligns with a trend observed in at least two other Chinese investment banks that have issued similar warnings. The directives coincide with China’s pursuit of “common prosperity,” as government officials scrutinize perceived excesses in various sectors, including finance.
The restrictions on critical commentary raise concerns about diminishing transparency in China’s financial sector amid economic challenges. Notably, the country no longer discloses its youth unemployment rate publicly, and there are unofficial estimates indicating a significant youth unemployment rate.
Concurrently, Beijing is taking measures to support the Chinese stock market, such as rejecting filings for share sales among investors holding over a 5% stake in a company. China’s economy has faced difficulties following the relaxation of its zero-COVID policies, leading to lower-than-expected demand and deflation during the summer. Additionally, addressing mounting debt issues in the property sector and addressing demographic challenges further add to the complexities China is navigating.
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