China’s stock market rout had shocked investors, but the state-backed funds interfered in the market on Tuesday. However, the Chinese government might have banned any keywords for “stock market on its social platforms.
Weibo, the Chinese Twitter-like platform has over 500,000 actives users. Ironically, there is no Chinese synonym for “stock market” on Wednesday. The disappearance of the keyword from the social platform might suggest that the keyword had been censored. Meanwhile, other keywords such as stocks, plunge, and A-shares were found when searched for on the platform.
According to a report by the Shanghai Securities News, findings about stock market keywords in Chinese social platforms were “rumors”. This happened, even though mentions of the stock plunge were not found in Chinese financial newspapers on Wednesday. Instead, Chinese newspapers concentrated on President Xi Jinping’s speech regarding national defense during the Chinese annual session of the National People Congress.
The plummet in China’s stock market has been notable, and the challenge had overwhelmed the state-backed funds as well as private financial institutions. For instance, the benchmark CSI 300 Index plunged 14% from its 13-year all-time high, in just for 14 days, resulting in over $1.3 losses of value.
Chinese media outlets’ history with banning
The reaction of the Chinese media outlets isn’t a new strategy. In fact, newspapers removed posts about ex-Pres. Donald Trump in 2019, when he threatened to impose more taxes on China exports, which resulted in a bearish stock motion back then. Meanwhile, South China Morning Post argued that “the correction in Chinese stock market may be a positive adjustment to shave valuation excesses”.
Strategist Jing Sima said in a March 10 report. “The good news is that recent gyrations in the US equity market, coupled with concerns about further tightening in China’s domestic economic policy, have triggered shakeouts in China’s equity markets. The pullback in stock prices has helped to shed some excesses in frothy valuations and has opened a door for more upsides in China’s stock on a cyclical basis.”