Despite Beijing’s promises to ease up on its crackdown on Chinese financial markets, Reuters recently reported that the country’s top securities regulator has launched a crackdown on brokerages using feng shui – an ancient Chinese tradition – to predict stock market trends in notes to clients.
Citing local media reports in the Chinese Securities Journal, Reuters revealed that China’s Securities Regulatory Commission recently unveiled a “zero tolerance” policy prohibiting brokers from using feng shui to justify its stock recommendations.
As part of the crackdown, it has punished some brokers who have incorporated feng shui techniques into their market forecasts and investment advice. Such techniques include ‘heavenly stems’ and ‘earthly branches,’ – also known as tiangan dizhi, Yin-Yang, and Five Elements.
The original report didn’t name any brokerages by name, and it didn’t offer much in the way of details. Some Chinese brokerages, including Guosheng Securities and Essence Securities, have received warning letters from the CSRC over the past year after releasing reports that incorporated elements of feng shui.
But while CSRC is under tremendous pressure to enforce ‘stability’ in Chinese markets, it’s hard to imagine these techniques being much worse than whatever American analysts (like, for example, technical analysis) are using to recommend trades to clients.
