China Curbs Data Leaks as Market Rises
China’s crackdown on the leaking of key economic data is working after inflation figures weren’t disclosed ahead of the official announcement, analysts said.
“We didn’t see the usual list of numbers circulating,” said Sean Callow, a senior currency strategist at Westpac Banking Corp. in Sydney. “What we got was what we should have in the market, which was the market waiting for the numbers and reacting to the release.”
The country’s benchmark stock index rose as the 5.5 percent annual inflation gain in May matched the median estimate in a Bloomberg News survey of economists, and industrial output increased more than expected. The Shanghai Composite Index added 27.19, or 1 percent, to 2,727.57 at the 11:30 a.m. local-time break, the biggest advance since May 31.
Authorities in China, the world’s second-largest economy, are trying to stop selective disclosure that can disrupt markets and give an advantage to investors with early access. An accurate reading for the consumer price index was circulated in the market and press reports before the official release for at least five of the six months through April.
An employee in the general office’s secretary division of the National Bureau of Statistics is under judicial investigation on suspicion of leaking national economic data, Sheng Laiyun, the bureau spokesman, said after a briefing in Beijing today, clarifying comments he made during the press conference when he used a Chinese word that could refer to either one employee or several.
“The National Bureau of Statistics’ stance is very clear - to decisively support the relevant departments’ investigation of the data leaks,” Sheng said. “We believe any illegal behavior will be punished according to the law.”
Today’s inflation number still spread online minutes ahead of the official announcement, after a printed release of the numbers was given to reporters at the bureau’s headquarters before the briefing. The bureau imposed an embargo for press not to publish the data before 10 a.m.
Netease, or 163.com, posted the inflation figure more than eight minutes before the embargoed time, citing the bureau. The official Xinhua News Agency published the same number at 9:56 a.m. Domestic media in China regularly posts key data before the embargoed time.
The bureau said April 15 it condemned leaks of economic data after the nation’s first-quarter growth figure and other monthly economic data including the inflation rate were reported a day before the official release.
A People’s Bank of China researcher is also being probed for leaking data, the 21st Century Business Herald said June 8. The bank has declined to comment on the report and calls made to its press office today went unanswered.
“Thanks to the arrest of a couple of junior officials in NBS and the PBOC, there were no ‘whispered numbers’ this time around, making our lives a bit easier,” Lu Ting, an economist at Bank of America Corp.’s Merrill Lynch unit, wrote in a note to clients today. Lu forecast a 5.4 percent gain in the consumer price index for May.
China’s stocks rose even as inflation accelerated to the fastest pace in almost three years. Industrial output increased 13.3 percent last month, more than the 13.1 percent median forecast in another Bloomberg poll.
China is ensuring those with access to data now treat it with the respect it should deserve, Westpac’s Callow said.
“China has shown it can deal with it, and deliver and handle its data with the required integrity,” he said. “The market would really be disappointed to see it backsliding from here.”
--Fan Wenxin. With assistance from Dingmin Zhang and Kevin Hamlin. Editors: Neil Western, Nerys Avery
To contact the Bloomberg News Staff on this story: Fan Wenxin in Shanghai at Wfan19@bloomberg.net
To contact the editor responsible for this story: Melissa Pozsgay at email@example.com