CICC Tightened Grip: China International Capital Corp (CICC), one of China’s prominent investment banks, has reportedly issued an internal memo instructing its analysts not to publish bearish views on the country’s economy or its financial markets. This directive comes amidst a broader trend in China where authorities aim to control the narrative surrounding economic challenges and maintain a positive outlook. The memo also advises caution in dealings with overseas clients to avoid potential political and national security risks.
The move to restrict analysts from expressing pessimistic views aligns with China’s ongoing efforts to shape a positive narrative and present a united front amid economic headwinds. As the country faced slowing economic growth last year, the central government intensified its crackdown on corruption and adopted rhetoric criticizing the financial elite for what it deemed “hedonistic” lifestyles. This approach is part of the “common prosperity” drive initiated in 2021.
Furthermore, the memo instructs CICC employees to refrain from commenting on issues that do not align with government policies, creating an environment where analysts are expected to tow the official line. The internal directive also extends beyond professional matters, urging staff not to wear luxury brands or disclose their pay. Additionally, there is a call for employees to ensure their family members adhere to specified social and ethical standards.
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The move by CICC reflects a broader trend in China’s financial sector, where the authorities have been tightening controls. Analysts and commentators who express negative sentiments have faced censorship, particularly as economic challenges mount. Chinese banks have been under increased scrutiny, with the government pushing for measures to promote “common prosperity” and reduce wealth inequality.
This directive from CICC is not the first instance of Chinese banks taking steps to align with government objectives. In 2022, banks started giving verbal guidance to bankers, warning them against posting images on social media that depicted lavish lifestyles. The government has also imposed measures to cut pay and perks for investment bankers, including reductions in compensation and budget constraints for travel and entertainment.
CICC had implemented significant cuts to bankers’ bonuses, reducing them by as much as 40%. This move indicated the bank’s response to the broader government agenda, emphasizing financial discipline and aligning with the priorities of the “common prosperity” campaign.
The increasing control over the financial sector and the messaging around economic conditions highlight the Chinese government’s determination to steer public perception, both domestically and internationally. This centralized approach extends to various aspects of banking operations, emphasizing adherence to government policies and the broader societal goals outlined by the authorities.