- As the West de-risks from China, Beijing has gone on the offensive to confront doomsayers and fearmongers
- Independent voices are important to an economy as they are trained to spot risks and raise red flags
The Chinese leadership has pledged to improve its propaganda on the economy in 2024 and will promote a picture that the country’s future is “bright” based on fair opinions about China’s status and prospects.
This emphasis on public opinion management is not hard to understand. Although the country has kept economic growth on track and avoided a major economic crisis, public discussions about the Chinese economy are nevertheless peppered with words like “peaked” and “collapse”. For Beijing, this is either a misperception, or at worst, a deliberate smear.
As the West continues to de-risk from China and weaken its role in global supply chains, Beijing has to defend itself by confronting the doomsayers and fearmongers. For example, it has stepped up its rhetoric after US ratings agency Moody’s downgraded China’s credit-rating outlook, a move that provided fresh incentives for global investors to sell Chinese assets.
When it comes to the economy, perceptions – whether manipulated or not – matter because they can become self-fulfilling and translate into real damage. For example, Hong Kong’s reputation as a leading international financial centre has been subject to fierce debate recently amid a stock slump, giving rise to questions over whether it will remain as the primary choice for Chinese businesses to access global capital.
Given the current state of affairs and the need to shore up investor confidence, there is little doubt that Beijing needs to improve its public relations efforts. However, instead of bringing nuance to the debate, Chinese authorities have reverted to the traditional approach of censoring unwanted opinions, even those that are only slightly at odds with the official narrative.
Some Chinese economists and investors, known for giving constructive advice, have had their verified social media accounts silenced. It seems fact-based analysis of economic problems is increasingly being treated as ill-intended noise, to be wiped out as quickly as possible. A long list of common economic topics, from youth unemployment to the level of the Shanghai Stock Exchange Composite Index, have became increasingly “sensitive”.
This approach, coupled with warnings from the state apparatus against those holding short views or short positions against Chinese assets, will only sow confusion and hurt the ultimate goal of boosting public trust in the official storyline.
An economy cannot function without reliable messaging, allowing prudent investors to gauge risk before making their decisions. If “negative” stories are censored or short views not tolerated, many investors will not believe in “positive” stories or long views. They will stop putting their money into the economy and walk away.
It is not wise to promote a very general and broad narrative, especially in the case of a fast-growing economy with evolving opportunities and pitfalls. While an attempt to cordon off certain discussions and debate may achieve short-term conformity on the surface, the narrative will eventually fall apart.
One of the lessons that China should have learned from its “zero Covid” campaign is how to handle different information and signals. Throughout most of 2022 Beijing held to its zero tolerance stance with the onset of the Omicron variant, blocking public discussion of an alternative approach to harsh lockdowns.
This one-sided narrative meant the whole country was unprepared for an eventual reopening of the economy.
Independent economists, analysts and media outlets are important to a market economy and society as a whole as they are trained to spot risks and raise red flags. Although they may say things we do not want to hear – just as a doctor may advise a patient to make lifestyle changes – it is often wise to heed their advice, or at least listen to what they have to say.
China must avoid an overreaction to healthy debate about the current state of its economy. Such an approach could easily be interpreted as a sign that it lacks confidence, which ironically could help promote the economic narrative that Beijing is trying to reject.