China blame game spooks investors

02-Sep (FT) — China’s efforts to apportion blame for its stock market rout have unnerved many of the foreign investors Beijing has spent years trying to court and left analysts and investors increasingly wary of provoking Beijing’s anger.

“I can feel the government supervision is strengthening. We are required to use more gentle wording in reports and our opinion should not be too strong,” said an analyst at a Chinese brokerage.

The authorities have arrested, or investigated, several employees of brokerages, listed companies and even the market regulator itself as they seek to tackle malpractice, manipulation and “rumour-mongering”.

One big US hedge fund with operations in China said it was conducting extra audits of its trading in the country, concerned that the authorities were imposing additional scrutiny on foreign investors.

[source]