As the world was transfixed on the US election, governments around the world seized the opportune moment to take strategic action knowing that their news would be drowned out by the cacophony. Known as ‘burying bad news’, the tactic has been used in politics for decades and became prevalent on Election Day 2020.
Perhaps one of the most notorious examples of ‘news burying’ happened in 2001, when a leaked memo from a political adviser in England suggested that the government should take advantage of 9/11 attacks to divert attention away from any controversial decisions. An email stating “It’s now a very good day to get out anything we want to bury” was sent within half an hour of the second plane hitting the twin towers in New York. It is clear why this case was widely chastised by politicians and the public alike.
The morning after US Election Day (4 November 2020), Nic Cheeseman, professor at University of Birmingham, was attempting to rally attention for a very different batch of bad news. “Authoritarian leaders around the world have rushed to arrest dissidents and launch military attacks while global attention is elsewhere,” he tweeted posting a list of ‘bad news buried’ in the last 48 hours on Twitter:
- Opposition leader Bobi Wine arrested in Uganda.
- Anti-corruption journalist Hopewell Chin’ono arrested in Zimbabwe.
- Opposition leader Zitto Kabwe arrested in Tanzania.
- Prime Minister Abij Ahmed announced a ‘military response’ to the activities of the TPLF in the Tigray region of Ethiopia.
- During controversial elections in Cote d’Ivoire, opposition leaders surround opposition leader Henri Konan Bédié’s house.
- The Chinese government blocked the stock market debut of Ant Group, in a bid to gain greater access to its data.
Despite the dominant news agenda, the final item on Cheeseman’s list did indeed garner attention from a slew of international media due to its impact on global financial markets. Cheeseman posits that the reasoning behind the China’s action was to gain access to data, but this is not congruent with official statements from the Hong Kong and Shanghai exchanges. In the context of data it is worth considering that Alipay (owned by Ant Group) has more than 1 billion users in mainland China, has handled more than $17 trillion in digital payments in the year to June, sells insurance to millions and manages the country’s largest money-market mutual fund.
Logically, the intervention has left investors scratching their heads in bewilderment. Just days prior to the US election four Chinese regulatory bodies met with the top executives of Ant Group to discuss its debut in Shanghai and Hong Kong. According to the South Morning China Post. Ant Group’s shares were due to commence trading simultaneously on 5 November in a US$3.67 billion stock sale, breaking records as the largest fundraising in global finance. Retail investors were ready to bid a combined US$3 trillion on the dual-listed shares of Ant Group.
Chinese officials stated that the decision to pull the plug was to protect its capital markets. Wang Wenbin, China’s foreign ministry spokesman, said the suspension of the IPO was done to “better maintain the stability of the capital markets and protect investors’ interest.”
“The fact that [Chinese regulators] waited till so close to the listing to pull it is very striking,” said Eswar Prasad, professor at Cornell University to The Wall Street Journal. “This sort of thing doesn’t happen without everybody in the top echelon of the political realm coming on board.”
This begs the question: was the IPO scheduled two days following the US election to create a backstop ‘burying bad news’ moment? While the scandal in the UK in 2001 involved an adviser identifying a spontaneous opportunity for burial, timing for the IPO could have been planned to coincide with the US election months in advance. It’s possible that by choosing the date, top executives of Ant Group were hedging against the risk of such a scenario playing out.
Ant Group has vowed to return cash committed to its IPO, but it may have already shaken investor faith in investing in China’s markets, which can be incredibly damaging for China’s efforts to open their economy to greater international market participation. Thus, it is logical that the incriminating news hit on a day when many investors would be more concerned about how markets would react to either a Trump or Biden victory or worst-case scenario, days of lingering uncertainty.
It is worth noting that no ‘burying’ was necessary in Chinese local press. Xinhua, the state news wire of China, made no mention of the Ant Group IPO suspension news on its English content site. Headlines on the Business page included: ‘Tourism in China has made remarkable recovery’; ‘German software giant hopes to deepen collaboration with Chinese partners’; ‘Economic Watch: Key projects boost prosperity in China over past 5 years’. These headlines combine to neatly reinforce the strong economic growth narrative that China promotes with warranted confidence, as they surge past Western countries in their path to recovery from the Covid-19 crisis. One can understand why the Chinese government would want news about the cancellation of largest IPO in history to be put six feet under.
Written by Elizabeth James Tingen