"Don't Invest in Stocks"... What Happened to the Financial Scholar Who Criticized China's Capital Market

China Local SNS, Account Suspension

A Chinese financial scholar's social media (SNS) account, which criticized the flaws of China's capital market, was suddenly blocked.

According to Taiwan's Central News Agency on the 9th, Chinese SNS platforms such as Douyin (China's version of TikTok) and Weibo (China's version of Twitter) recently banned posts and followers of Liu Jifeng, considered one of China's top financial experts.

Renowned Chinese financial scholar Liu Jifeng [Photo source=China University of Political Science and Law website]

This action occurred shortly after he repeatedly criticized problems in China's capital market.

On the 1st, he posted on SNS, "China's capital market system is not yet perfect," and argued, "Now is not an appropriate time to invest in stocks."

He continued his criticism at the 'Hexun Finance' annual conference held on the 2nd. As a special guest speaker, he said, "It has been 45 years since China’s reform and opening up, and 33 years since the introduction of the capital market system, but polarization and wealth disparity in the capital market have deepened," adding, "Many describe the current Chinese stock market by saying 'only one out of ten people profits, while nine suffer losses.'"

In his last post on SNS on the 5th, he emphasized, "Authorities should prioritize stock market development and value finance," and stated, "The capital market must develop to revive consumption and investment, and as stock prices rise, the stock market improves, which can promote consumption and investment."

Wall Street Also Pulling Out of Chinese Market

Liu Jifeng is not the only one showing skepticism toward investing in China. Major players on Wall Street are also withdrawing from Chinese investments. This is analyzed as a result of overlapping concerns about China's economic downturn led by an unprecedented real estate slump and uncertainties under President Xi Jinping's administration.

The Wall Street Journal (WSJ) reported on the 7th (local time), citing investment information firm Preqin, that private equity funds on Wall Street raised an average of $100 billion annually for Chinese investments over the past decade, but only $4.35 billion was raised through November this year.

Josh Wolfe, managing partner of venture capital firm Lux Capital, said, "We decided not to invest in China five years ago," explaining, "Because the Chinese government’s use of technology for social surveillance appeared to be a sign of increased state control."

However, despite such decisions, cautious moves are made to avoid offending Chinese authorities. During the Asia-Pacific Economic Cooperation (APEC) summit held last month in San Francisco, prominent Wall Street figures including BlackRock CEO Larry Fink and Bridgewater founder Ray Dalio attended President Xi Jinping’s dinner for business leaders, and they all gave a standing ovation after Xi’s speech.