China International Capital Corp (CICC), the nation’s third-largest investment bank based on market value, has allegedly instructed analysts against publishing pessimistic perspectives on China’s economy or financial markets, as revealed in an internal memo obtained by Reuters.
The memo, directed at the bank’s research department, also advised refraining from commentary misaligned with government policies. Furthermore, CICC staff, a state-owned investment bank, were reportedly urged not to wear luxury brands or disclose their salaries.
The memo emphasized the importance of ensuring family members adhere to social and ethical standards. While CICC did not respond to Reuters‘ request for comments, Bloomberg initially reported the contents of the memo. CICC, highly active in offshore dealmaking, emphasized caution when dealing with overseas clients to mitigate political and national security risks.
This directive reflects a broader trend in the intensified oversight and control exerted over discussions concerning China’s economic trajectory, a trend that gained momentum as the nation experienced a slowdown in economic growth in the preceding year.
The central government’s endeavors to combat corruption have dovetailed with explicit criticisms directed at the “financial elite” for what is perceived as “hedonistic” lifestyles, aligning with the overarching goals of its “common prosperity” initiative, inaugurated in 2021.
Reports suggest that Chinese banks initiated verbal guidance in 2022, advising against the sharing of images depicting opulent lifestyles on various social media platforms. In response to the economic headwinds faced, financial institutions have implemented measures such as pay reductions and curtailment of perks for investment bankers.
This includes decreased compensation and budgetary constraints related to travel and entertainment. Notably, CICC took a significant step in this direction, reportedly slashing bankers’ bonuses by up to 40% in April, according to information from Reuters.
