INFORMATION is the oxygen of financial markets. Reduce the flow, and they slow down. Cut it off, and they die. This is a truism with which those who govern China's still young markets were becoming very familiar.
But there is a now real concern that press activity in China is becoming much more regulated since the Xi Yang imprisonment, and the outspoken reaction which followed in Hong Kong. Threats of boycotts have been responded to with threats of exclusion. In this sort of game there are no winners. If it escalates, one of the losers will be the ambition of China to see its big companies comfortably listed aommission, found themselves under apparent threat.
The Hong Kong and Macau Affairs Office told the organisers that those reporters who were not fully accredited through Xinhua (the New China News Agency) might be regarded as unwelcome guests, even though they had been formally invited by the organisers. Given the current atmosphere, prudent newspapers recalled their reporters.
The Hong Kong journalists' anger was legitimate when the organisers said foreign journalists had not been formally invited to report on the symposium. It was the second time in a week that Beijing had played it tough with journalists covering events on the mainland.
The result was that valuable information and interpretation of the programme for floating these companies was lost to the international investment field. Beijing has hurt, rather than helped, these firms by excluding the Hong Kong media from covering the event.
Instead of making journalists nervous about covering the plans for the corporatisation of China, the authorities should be looking at the role that the press plays in financial markets. There is an enormous demand from investors, both professional and private, for information about markets and companies. This is especially true of emerging markets, which are far from transparent.