Exclusive | Beijing giving foreign economists the cold shoulder

Chinese government officials have quietly become more sceptical about foreign banks' research reports and are avoiding senior economists at global banks, partly because of growing mutual distrust over the scale and seriousness of the country's debt problems.

Economic researchers and people working for state-owned media told the that the central government's propaganda department had instructed senior editors at major official media outlets to be cautious about whom they invite to talk about China's economy and what they might say about the problems and challenges it faces after its long run of supercharged growth.

"There's no black list or white list, but it's clear we are now being encouraged to invite economists and analysts with domestic securities firms and banks to talk about China's economy, especially on live broadcasts," said one mainland media source who declined to be named given the sensitive nature of the matter.

The mainland's fiscal position is weaker than official data shows but not significant enough to cause alarm, the International Monetary Fund said last month. The IMF warned that the mainland had become "more vulnerable to a macroeconomic shock" because of its higher debt and bigger deficit. It estimated augmented fiscal debt, which mainly refers to borrowing by local governments, had risen to about 45 per cent of the country's 51.9 trillion yuan (HK$66 trillion) gross domestic product in 2012. Many economists at foreign banks shared the IMF's concern.

There are other signs that economists at foreign banks have apparently lost favour in Beijing. For example, the China Banking Regulatory Commission used to invite some economists from foreign banks to closed-door meetings about the development of the country's banking industry, typically with a focus on its lending policy. But since last year, such meetings have been significantly reduced.

Invitations are now being sent to only a small number of economists at foreign banks whom the CBRC considers trustworthy, two China-focused economists who have a working relationship with the CBRC said.

"The general sentiment has clearly changed. The central bank and the regulators are more cautious about what they can tell you," said one of the economists.