Q: When is a (China) Briefing Not A Briefing? A: When It Is Off The Record (Or “Pure Fabrication”)

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There are a lot of rules in China, written and unwritten – and just as many interpretations. That is one of the things that helps make business life so interesting. Occasionally a story appears that helps to focus a spotlight on the area where the do’s meet the don’ts.

In the case of China Briefing, a well-known English-language blog (and newsletter) in China, senior Chinese government officials were quoted on the likelihood of RMB depreciation. Whatever the facts, fictions and grey areas of the story behind the story (covered in excruciating detail by China Law Blog among others), the China Banking Regulatory Commission issued a denial of the reported interviews, calling the piece “a pure fabrication” . An apology was issued on the blog, and the offending articles were removed.

The initial RMB story was widely reported in the media – as it happens to be a spicy ingredient in the current global financial soup, and as people are hungry for news. At this point, instead of reporting a story, the blog itself became a story. The rest is history.

One of the reports was in the Wall Street Journal reported (h/t China Law Blog):

    “In a China Briefing…China Banking Regulatory Commission Chairman Liu Mingkang was quoted as saying the yuan may weaken to around CNY6.9-CNY7.0 against the U.S. dollar.

    The CBRC denied its chairman had been interviewed by China Briefing.

    …China Briefing issued a clarification on its Web site, backing away from attributing specific dollar-yuan levels to any government officials.

    The author of the reports, Chris Devonshire-Ellis, told Dow Jones Newswires that specific levels came up during discussions with government officials, but he declined to say who made the comments.”

Dan Harris, at CLB, notes the following lessons:

    “1. Tell the truth.
    2. If you are going to report on a conversation with a Chinese government official, make sure you have permission to do so; if you do not have permission, do not make any attributions to a particular person and keep the statements at least somewhat vague.
    3. If you are going to issue a story with such clear potential to move markets, make sure you have your facts straight before doing so.
    4. If you are going to issue a story with so much potential to move markets and then your facts get questioned, hire a top level PR agency.”

Good advice! Especially as China Briefing’s apology for “this breach of etiquette” was only a start – Devonshire-Ellis has since resigned (as reported on China Briefing) – and as attribution can be the kiss of death for an official.

From another angle, the story highlights the fact that blogs are generally self-edited, and that, while they can report interesting news (and especially personal views) from interesting perspectives, they are not always right (whether “officially” or “unofficially”). This, of course, is not a problem confined to blogs…, and is one reason we always suggest adding more than one source to the research pot.

It is also a reminder that guanxi – and government access – in China are complex areas that need careful handling. As we reported back in 2007:

    Danwei reports, with reference to an interview with Shaun Rein of China Market Research Group, that:

    “Shaun believes that the end is near for the strategic consulting companies that depend on the Henry Kissinger model of using personal relationship networks to ease clients through the ins and outs of the system. He believes rather, that only the firms that provide the best data and analysis will succeed.”

    I certainly agree that more than guanxi is needed, and most firms now seem to recognise (and some have restructured accordingly) that they need a professional offering that is based on more than just being able to arrange breakfast with the Minister of XYZ. However some well-targeted guanxi on top of quality data and analysis is still likely to help, especially in “sensitive” areas”.

Of course guanxi is a two-way street, and any access should be used with care – especially in these days of news blogs, real-time Tweets, the Foreign Corrupt Practices Act (FCPA), and political / economic sensitivities.

We will continue to blog (and read other blogs)…with care.

One Response to “Q: When is a (China) Briefing Not A Briefing? A: When It Is Off The Record (Or “Pure Fabrication”)”

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