Freedom of speech and free economy signs.
PRE-OLYMPIC WARNINGS TO CHINA'S FUND MANAGERS
By Patti Waldmeir in Shanghai and Jamil Anderlini in Beijing
Monday, July 28, 2008
Fund managers in China have been warned to watch what they say about the country's stock market, in the latest manifestation of a pre-Olympic Chinese government crackdown on everything from Beijing weather to suspected terrorists.
In a bluntly worded notice distributed to fund managers, including foreign-Chinese joint ventures, China's securities watchdog warned fund employees not to say anything publicly that could harm the stability of the market.
The China Securities Regulatory Commission, which issued the notice, did not make overt reference to the Olympics, but the message was not lost on local fund managers, who linked the notice to a broader effort to avoid market turmoil in the pre-Olympic period.
The notice warns fund managers of “20 risks” to be avoided in handling the release of information about the market, from protecting data security online, to vetting promotional material carefully, to monitoring public commentary.
“Fund company executives, fund managers and other important staff should be very careful about their speeches and blog content, which may cause market fluctuations,” the notice says, adding that companies should be cautious about holding public forums “which may cause market fluctuations”.
A fund manager with a foreign-Chinese joint venture said his company had been told not to make any public comments at all, “particularly negative comments about the market”, which has fallen by more than 50 per cent since its peak last year. He said his company had been warned that its managers must not be quoted in newspapers, magazines, television or on the radio.
Fund managers were understandably reluctant on Friday to be publicly quoted on the impact of the notice, a copy of which was obtained by the Financial Times. This month, the securities regulators also pressed top executives at local fund management firms and securities brokerages not to travel abroad until after the Olympics.
The Chinese government, preoccupied with stability, is doing everything in its power to ensure the Olympics go off without a hitch – including any further fall in the market. Beijing has a history of using policy tools, clumsy moral persuasion and directives to manage the level of the stock market. Chinese investors regularly buy or sell stock based on their expectations of government intervention.
