Changes at Hong Kong-based CLSA show that China is in charge

REUTERS/Kim Kyung-Hoon

Before CLSA was acquired in 2013, the Hong Kong brokerage’s research division issued a warning to investors in Chinese financial companies: beware of “high-frequency interference” from the Communist Party.Nearly a decade on, there’s no better example of how the Chinese government can transform a financial firm than CLSA itself.The latest case in point: CLSA executives have for the first time been ordered by their bosses at state-owned Citic Securities Ltd. to participate in China’s five-year planning process, a ritual that Communist Party leaders have used to guide the nation’s economy since the 1950s, people familiar with the matter said. Major state-owned enterprises are required to submit five-year plans to the government, and CLSA’s outlook will now feed into Citic’s report to Beijing, which is unveiling a new road map in October, one of the people said.

The diktat adds to a series of steps by Citic to overhaul CLSA, a Hong Kong icon that’s long been known for its independent-minded research and raucous investor conferences. Some observers have portrayed the moves as a financial-industry microcosm of the Chinese government’s broader clampdown on the former British colony.

Bring stories like this into your inbox every day.

Sign up for our newsletter - The Daily Brief
Subscribe to Newsletter