The Minsheng Bank Building in Wuhan. (File photo/Xinhua)
China Minsheng Banking Corporation has sought to clear rumors and has fought back against attempts by foreign investment institutions to short sell the bank in what has been called the fourth round of short selling China.
The moves by foreign investors led the stock price of the bank to fall heavily on the Hong Kong and Shanghai stock market on Sept. 5. Industrial Bank of China and SPD Bank have also come under attack from overseas short sellers.
The foreign institutions accused included the investment banks UBS and JPMorgan Chase as well as three global rating organizations, according to the Chinese-language China Economic Weekly.
Institutions in China accuse foreign investors of attacking the Chinese economy by publishing negative reports in order to make a profit from the resulting market movements.
The "first round" is perceived to have occurred in March 2011, when reports from some investors said China would face economic collapse over the next 9-12 months due to a real estate bubble 1,000 times greater than Dubai. In June last year, the ratings institution Standard & Poor's and investment organization Goldman Sachs said jointly that non-performing loans for Chinese banks would reach US$400 billion due to the mismanagement of local finance.
In what is viewed as a third round, short seller Muddy Waters Research began to reveal accounting irregularities among Chinese companies listed in the United States, while banks appear to have been targeted in the latest move.
The Chinese government's previous tightened monetary policy of Chinese government has weakened the country's economy and reduced the confidence of the market to the point where it is easily affected by rumors, said analysts, adding that the foreign investors have also suggested Beijing has reduced its focus on the economy as it prepares for its leadership transition.