China appears set to consolidate five state media companies into one “modern financial media group” to increase the government’s influence in economic and financial news coverage, according to Reuters.
According to the report, the State Council, China’s cabinet, has given Xinhua permission to acquire the China Securities Journal, Shanghai Securities News, Economic Information Daily and Xinhua Publishing House, consolidating them into what will be known as the China Fortune Media Corporation Group.
The new organisation will be unveiled in Beijing on Thursday next week, said Reuters. Fortuitous timing as it will come just a day before the release of China’s Q4 GDP report.
According to Xinhua, the move aims at “deepening the central authority’s reforms of the cultural system” and “increasing mainstream media’s influence in the area of financial information”.
“Influence”, remembering that these are all state-run media organisations.
According to the Wall Street Journal, following a meeting between Chinese president Xi Jinping and journalists from Xinhua, the People’s Daily and China Central Television held in early 2016 — a precarious period for the Chinese economy at the time — pressure was placed on journalists to produce positive stories about the economy.
Reporters covering the country’s stock markets, for example, were told to focus their reports largely on the official statements issued by the CSRC, the nation’s stock market regulator, the Journal said citing Chinese journalists.
Xi had reportedly told the organisations to “tell China’s stories well”.
While the Chinese economy is now on a far stronger footing than this time a year ago, reports have surfaced in recent days suggesting that the government is continuing to exert influence on market sentiment, this time towards the Chinese yuan.
According to Reuters, in a meeting held in August last year, China’s foreign exchange regulator, the State Administration of Foreign Exchange, or SAFE, met with at least 20 major foreign and domestic banks operating in Shanghai, instructing them to help boost sentiment towards the yuan.
The banks were told to “manage sentiment” to prevent public panic, one banker told Reuters, noting that research analysts should not broadcast any negative views on the yuan.
“They told us not to publish bad house views — analyst house views — on the yuan,” the person said.
The yuan lost over 6% against the US dollar in 2016, resulting in hundreds of billions in capital outflows from the country.
In response to renewed weakness in the yuan, partially driven by speculative forces, policymakers recently tightened oversight of FX markets, announcing a range of measures in the first week of January designed to slow capital outflows.
Only time will tell whether further measures — including influence over reporting on the yuan — will be used to help manage expectations to not only the yuan, but also the outlook for the economy.
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