China has jailed two government officials for leaking data to securities brokerages in a state secrets case that some fear may threaten economic transparency and debate.
The two relatively minor officials – one from the National Bureau of Statistics (NBS) who received a five-year sentence, and one from a research office at the central bank who was given six years – were convicted of leaking information including data on gross domestic product, inflation, fixed-asset investment, money supply and credit figures.
They were said to have acted in exchange for payments and favours from brokerages that allegedly used the information to predict domestic equity and bond market movements before official data releases. Four securities industry officials are also being held for questioning.
“The leaking of these economic figures harmed the functioning of the economy, prevented fair market competition and damaged the government’s credibility, thereby causing serious losses to the interests of the nation, society and individuals,” said Li Zhongcheng, deputy director of the national prosecutor’s office, which investigates official misconduct, in a media briefing in Beijing on Monday.
The sale of official data to securities brokerages has been widespread in China for years, and markets have often moved well before the figures are publicly released.
But some in China’s financial industry fear that the heavy sentences imposed on the pair could make other civil servants and financial professionals reluctant to discuss their views on the economy openly for fear of violating regulations.
Sun Zhen, a former deputy director of the secretary’s office at the NBS, and Wu Chaoming, a former deputy director of the financial history research office at the People’s Bank of China, were sentenced under the country’s opaque state secrets laws.
Du Yongsheng, deputy director of the National Administration for the Protection of State Secrets, warned journalists on Monday that they would also have to “shoulder legal consequences” if they violated these laws.
“Some foreign media use deceitful methods and the words of our government officials speaking at public events to reveal secret economic figures to the outside world,” said Mr Du. “Some foreign media, through various channels and methods, attempt to confirm their [economic data] forecasts with our economic organisations and professionals in the finance and securities industry, but all of this is forbidden.”
Speaking privately because of concern that they could face action from authorities, bankers and economists in China told the Financial Times they welcomed the crackdown on officials leaking data to brokerages that profited at the expense of other investors.
But they said the harsh sentences and use of murky state secrets laws were likely to make it harder for analysts and journalists to get accurate and timely information on the Chinese economy.