Anyone seeking the truth last week on China's favourite social network, Sina Weibo, was in for a disappointment. Up on his or her computer screen would have flashed the message 'According to relevant laws, regulations and policies, search results for 'the truth' cannot be displayed'. Apparently the very notion of the truth is now deemed so subversive that the word itself has been censored. It's easy to laugh at such ridiculous paranoia, but censorship is no joke. Whether self-inflicted or imposed from without, it is an unmitigated evil which carries grievous commercial and civil costs. Nevertheless, censorship will always have its apologists. As a journalist, one of the first stories I ever wrote concerned dodgy dealings at the commodity futures broker Refco. Almost 20 years later, I can't now remember the details of the scandal. Very likely it involved either front-running - when brokers take positions on their own account before working large client orders - or rat-trading - when dealers retrospectively allocate successful trades to favoured clients and distribute their losing trades among other accounts. Both were common at the time. Either way, it was clear customers had been left out of pocket. Not long after, I was hauled over the coals by an executive from a rival futures broker. Stories about malpractice served no good purpose, he said, they only deterred clients. That was bad for business and damaged the industry as a whole, including trade journals like mine, which relied on brokers' advertising dollars to pay their reporters' salaries. In short, he was advocating self-censorship. In my naivety I was shocked, and replied that failing to report on financial misconduct did everyone a disservice. Only if abuses were highlighted could the industry hope to improve its standards and attract new customers. In the long run, reporting bad news was good for business. I may well have been naive, but I believed I was right. I still do. And what applied then to futures brokers applies equally well today to financial centres like Hong Kong as well as to entire political systems. The free flow of credible information is as essential to financial markets as oxygen to living organisms. If you don't believe that, just look at the discount Chinese shares listed in the United States are trading at, all because investors don't trust their financial statements. Nothing is so sure to destroy a financial centre as the suspicion that information is being tampered with. The same arguments work on a larger scale. Authoritarian governments censor the media because they fear honest reporting will expose the true extent of their failings and the breadth of popular discontent, and that if only people knew the truth, they would rise up and sweep away their rulers. Yet censorship comes at a heavy cost even for authoritarian regimes. It is regularly used to conceal the damage inflicted by official corruption, theft and abuses of power. Understanding this, during the 1990s the authorities in China relaxed some of their restrictions on press freedom and encouraged a certain amount of investigative journalism in a bid to deter official corruption and improve standards of governance among local governments and state-owned industries. The relaxation was only partial. Certain subjects - criticism of the political system as a whole, the business interests of senior leaders - were strictly off-limits. But even so, China's score on the media independence index compiled by Freedom House improved significantly, falling from 89 in 1993 to 80 in 2003 (where a lower score indicates less censorship). Unfortunately, under the leadership of Hu Jintao and Wen Jiabao, the degree of censorship has crept higher again (see the charts). That is partly a reaction to the growth of the internet. But it is surely no coincidence that media freedom was curtailed again even as economic reform stalled under the new generation of leaders. Apologists defend this revival of censorship as necessary to maintain social harmony. But a healthy society isn't harmonious. It's cacophonous with debate. Far from strengthening society, censorship is always and everywhere a sign of weakness and insecurity. Whether self-imposed or enforced by regulation, it imposes heavy social and economic costs. The truth is, it's indefensible. Incidentally, Refco went bust in 2005, leaving hundreds of millions of US dollars in bad debts. Oh yes, and the executive who recommended self-censorship worked for the company that would go on to become MF Global, which collapsed in October last year after losing almost US$1 billion of its customers' money in illicit trades.