Chinese Government Censors JPMorgan and Goldman Sachs as Economy Declines

Amidst a worsening property crisis and falling yuan, Chinese authorities have moved to censor the Beijing-based research arms of JPMorgan Chase & Co. and Goldman Sachs Group, Inc. The action came as the 20th Communist Party National Congress commenced on October 16.

China’s Securities Regulatory Commission asked the banks to withhold the publication of politically sensitive financial information before the meeting took place. The Congress is expected to endorse both President Xi Jinping for another five-year term and the country’s economic plan.

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In China, the property crisis has caused millions of mortgage holders to refuse to pay back loans and nearly 25% of construction projects to cease in key cities and municipalities, according to the Thai Examiner. Trillions of dollars are in jeopardy, bank analysts say, with property prices falling in more than half of the cities by an August average of 1.3%. Projections for 2023 are for a 1.5% decline.

Construction workers also report not being paid in six months as firms have not been able to access funding.

The censoring of western banks is aimed at protecting large state-owned enterprises and institutions rather than individual households, J Capital Research’s Anne Stevenson Yang told The Guardian. The country could provide properties for people to live in, and could even gift them to citizens, she said.

“But that’s not of course what is going to happen. The Chinese political system is not built around individuals, it’s built around companies; they are the constituents. The political system operates through them.”

S&P, the U.S. ratings agency, said the situation is a crisis of confidence in the Chinese government, the Thai Examiner reports. “If falling sales tip more developers into distressed territory, things will get worse. The distressed firms will halt construction on more pre-sold homes, hitting buyers’ confidence further. Our rough estimate is that about 2 million unfinished homes pre-sold by Chinese developers are now in limbo. This has shattered confidence in this market.”