Bloomberg Rising up from the center of Beijing, not far from the Temple of Heaven, is the loudest voice in the wild east of the Chinese stock market.
'It’s neither a bank nor a brokerage -- it’s the headquarters of
Xinhua News Agency, long considered the “throat and tongue” of the
Chinese government. With the heady exuberance over Chinese stocks starting to fade,
sowing fears of worse to come, investors are scouring state media for
clues to the Communist Party’s thinking.
'Only months ago, encouraging words from Xinhua sent stocks soaring.
Now, with markets sinking, that official line has gone quiet, leaving
many wondering how -- or whether -- Beijing might respond.
Just how much China’s state media are used to telegraph government
views on the markets is the subject of debate. Xinhua, founded in 1931
as the Red China News Agency, didn’t answer calls to its news hotline
'But analysts agree that Xinhua, a ministry-level government
department, is too powerful to ignore. If nothing else, reports and
commentary by state media sway investor psychology and can turn a rout
into a rally -- or vice versa.
'“Investing in China stocks means you have to follow state media,”
said Nelson Yan, the chief investment officer at the Hong Kong unit of
Changjiang Securities Co. Government policy, after all, has been largely
behind the world-beating 124 percent market gain of the past 12 months.'