China discourages media from talking about banking’s cash crunch

Instead, media must positively guide public opinion.

According to the Financial Times, a directive sent to Chinese media by the Communist Party says China’s ongoing cash crunch should not be over-hyped.

The directive says: "First, we must avoid malicious hype. Media should report and explain that our markets are guaranteed to have sufficient liquidity, and that our monetary policy is steady, not tight.

"Second, media must strengthen their positive reporting. They should fully report the positive aspect of our current economic situation, bolstering the market’s confidence.

"Third, media must positively guide public opinion. They should promptly and accurately explain in a positive manner the measures taken by and information from the central bank."

In June, customers of some of China's banks were unable to withdraw money from cash machines for a short time while work was carried out on the ATMs. There was speculation in the Chinese media that the banks could be running short of cash.

FT said issuing a strongly-worded directive to the media may produce results in a one-party state; in democracies, it would blow up in the government's face and cause chaos.