Who has the most reliable sources for China's economic policies? - Week in Review #33 [Corrected]

A post-mortem on who is worth listening to, and who is just noise

[Correction: In the original version sent out on Nov 10, I missed an important article on Oct 15 by Bloomberg, which would change my assessment and scoring for Bloomberg. I also missed a small detail of Caixin’s report.]

The last month has been quite unusual. Ever since a phenomenal press conference by China’s financial regulators and an epic mini-rally in late September and early October, the market has been taking wild guesses about what fiscal stimulus policies - the “X trillions” - Chinese authorities will throw out. Rumors of various kinds were floating everywhere, causing the market to fluctuate wildly.

This unusual phase of everyone anxiously speculating about and pre-empting the Chinese government’s next moves will come to a temporary pause after the conclusion of the delayed meeting of the National People’s Congress Standing Committee (NPCSC), where a 6 trillion (or 10 trillion or 12 trillion depending on how you count it) debt-swap program for China’s local governments was announced.

The market has been overall underwhelmed by this. Next week, at Baiguan, we will zero in on this and discuss its implications.

For this personal newsletter though, I would like to do one thing only: This month has also offered us a unique litmus test of who really has reliable information sources and who is questionable, who is the real deal, and who is swimming naked.

This kind of rear-view accounting is important so that the next time you see some news about China, you know who you should listen to and who is just noise that you should avoid.

This discussion will come in 2 parts. Part 1 deals with media and journalists. Part 2 deals with academia. I will give a reliability score out of 5 for each of the people or organizations mentioned.

Part 1: How good are these journalists

#1 Caixin

Caixin, a China-based, non-state-owned news media organization, has once again proven itself as a pre-eminent voice in China’s information landscape. In fact, they are one of the few news media that got this thing right. As early as Oct 14, they reported:

China may raise an additional 6 trillion yuan from treasury bonds over three years as part of its efforts to buttress the slowing economy through fiscal stimulus, multiple sources with knowledge of the matter told Caixin.

There was one mistake they had made though. In the article, Caixin said the 6 trillion yuan would be backed by sovereign bonds, but in fact, it’s just additional special local government bond quotas. Still, it is worth remembering that they are the first to get it (almost) right.

Caixin’s China reliability score: 5/5

#2 Reuters

Perhaps the one organization that has moved the market the most this time is Reuters. Some lines in their Sep 26 report, published around the time of the pivotal Politburo meeting that concluded on the same day, gave the market a strong (but wrong) impression that China was ready to fire bazookas to directly stimulate domestic consumption. They wrote:

As part of the package, the Ministry of Finance (MOF) plans to issue 1 trillion yuan of special sovereign debt primarily to stimulate consumption amid growing concerns about a stuttering post-COVID economic recovery, said the sources.

To this juicy pile of meat, they even added a gory little detail that got fixated in many people’s minds but has never become a reality:

The proceeds will also be used to provide a monthly allowance of about 800 yuan, or $114, per child to all households with two or more children, excluding the first child, the first source said.

Their report on Oct 30 was also quite notable. It’s at the same time right but also wrong. They are right about the “6 trillion” part (although they were 2 weeks later than Caixin):

The 6-trillion-yuan worth of debt would be raised over three years including 2024, said the sources, adding the proceeds would primarily be used to help local governments address off-the-books debt risks.

But they are wrong to suggest that the total “extra debt” is 10 trillion and that “the NPC Standing Committee is also expected to greenlight all or part of up to 4 trillion yuan worth of special-purpose bonds for idle land and property purchases over the next five years, said the sources.” (In Friday’s press conference, there was indeed another “4 trillion” but it was not extra debt but only a re-designation of existing debt).

They were also wrong to suggest that the “6 trillion new debt” will be funded partially by special sovereign bonds. They won’t be. They will come solely from new quotas for local special bonds.

Overall, I am under the impression that Reuters’ sources know something, but not all. For some details, they sounded simply too confident.

I speculate that their sources may be situated somewhere in the formulation and advisory part of the whole chain of policy-making - possibly some bureau-level official or just a think tank scholar. In plain words, their sources are not placed highly.

It is possible that some of Reuters’ misses may not be missed, but may resurface in actual policy documents one day. Still, the over-confident way that Reuters has been framing its stories is problematic. It will be really hard to tell if it’s some intentional signaling of official intention to get market sentiment prepared, or if it’s just one school of thought trying to lobby for their proposals.

So take their stories with a grain of salt.

Reuters’ China reliability score: 3/5

#3 Bloomberg

Bloomberg also correctly broke the story on Oct 15. In fact, they were more accurate than Caixin in suggesting that the 6 trillion would be funded through special local bonds, not sovereign bonds.

It was not the first time recently that Bloomberg has done a fantastic job of breaking good stories. Previously, they more or less correctly broke the news on the Chinese government’s efforts to buy equities and housing.

Bloomberg’s China reliability score: 5/5

[Note: In the original article, I missed the Oct 15 article but still gave Bloomberg a 4/5 because of its perceived prudence and previous track record.]

#4 The Financial Times

The FT is also noticeably absent here.

Frequent readers of this newsletter may remember the two times I have “battled” the wrong takes by FT, one is about entrepreneurship and another is about Pinduoduo. But those takes were mostly about businesses, and they reflect more on FT’s bias and inexperience in these matters, rather than the lack of good sources in the government.

In fact, FT does seem to have some very good sources, it’s just they are not placed in the economic and financial sectors. If you recall, back in June there was a curious FT story by Demetri Sevastopulo and Joe Leahy that Xi told Ursula von Der Leyen that Washington tried to bait him into attacking Taiwan, but he would not take the bait. That FT story was immediately recycled by China’s state media to prove China has no intention to unilaterally change the status quo in Taiwan.

If you think about it, that story was quite remarkable. The underlying event of that story actually took place more than a year before the story was made public, in April 2023. Xi’s obvious intention was to let VDL know and communicate this story to the global public. But VDL, being VDL, obviously stayed silent on this crucial information, presumably not trusting Xi. So later, through some channels, the story finally landed on the desk of Demetri.

FT’s China reliability score: 5/5 for geopolitics, 2/5 for finance and business

#5 The Wall Street Journal (Wei Lingling, specifically)

Compared with the above, Wei Lingling has the highest ratio of theatrics divided by substance. But she timed her theatrics really well.

The policy “pivot” of late September had obviously caught her off guard. After all, she had only just recently bashed Xi for his inability to change.

But soon, she regrouped herself and picked a new angle of attack. On Oct 6, at the height of the “crazy bull”, she tweeted:

Source in Beijing told me there are lots of “misunderstandings in the market” about what China will do next to support growth. Yes, some fiscal measures “in the pipeline” but nothing as big as some had speculated.

This is quite vague. My instant question when seeing this was: Can you be precise? What are the “fiscal measures” you are seeing? You are a journalist, can you share with your readers exactly what you know? Or is this as much as you know?

But she got lucky. Two days later, the botched NDRC press conference and the ensuing market sell-off seemed to have validated this vague comment.

Later, on the day of the MoF conference, when Minister Lan announced no clear headline number except for a “400 billion new debt limit”, Wei Lingling, in a retweet that seemed to have been deleted now, laughed at this with a told-you-so. Yet, while she laughed, she obviously forgot to inform her readers (and her great sources forgot to inform her) of the 6 trillion debt-swap program that was in the works, like what her peers in Caixin or Reuters did.

But no worries, by that time she had already unveiled a new thesis that this “pivot” was no real stimulus, but only about containing risks in local finances and real estate

Honestly, weren’t these two things almost the same? Was this difference really huge enough to warrant a long-read article? Drawing an artificial line between the two just reeks of “criticism for criticism’s sake”.

Her analysis in this regard was not wrong (yet). But many people can do good analysis too. What we expect from primary reporting from a flagship newspaper are the details and the numbers, not an opinion piece pandering to a particular taste.

Just show us the damn numbers!

Wei Lingling proved that she could make seemingly correct predictions while getting away with showing any real numbers and that she can now thrive on ideology-driven opinion pieces alone. But she can get away with it this time, can she repeat the hat trick every time?

For this reason, my final assessment is:

WSJ’s China reliability score: 1/5

[Part 2 will deal with an assessment of top scholars who have appeared on this stage. This part will be reserved for paying subscribers.

If you are already a paying subscriber of

Baiguan - China Insights, Data, Context

, please find me for complimentary access or a refund if you have double-spent.]

Part 2: How good are these scholars? A real zuiti or just personal vanity?