Nobody panic. OK? That is no mere suggestion. Rather, it is strong advice to reporters straight from the propaganda department of the Chinese Communist Party. Directives from Beijing recently told bemused hacks, who mistakenly thought it was their job to just report stuff that was actually happening, that they should stop “hyping the so-called cash crunch” and instead spread the message that the country’s markets are well stocked with money.
It is common in China for such orders to be issued on political matters, but sending them to financial journalists suggests that the authorities are seriously spooked. “First, we must avoid malicious hype,” they barked. “Media should report and explain that our markets are guaranteed to have sufficient liquidity and that our monetary policy is steady, not tight.
“Second, media must strengthen their positive reporting. They should fully report the positive aspect of our current economic situation, bolstering the market’s confidence.”
So that is fine then. Never mind if there is indeed a liquidity crunch in China with the potential to wreak havoc on the world economy – it’s nothing that a bit of positive spin can’t fix.
Perhaps reporters in the west should have been issued with similar edicts. A Bloomberg headline on August 9 2007, the day the credit crisis entered the public consciousness, read “BNP Paribas freezes funds as loan losses roil markets”. Perhaps this should have more usefully been written, ideally on August 8, as “BNP Paribas freezes time, saves world”.