A Mysterious Account in China Seems to Have an Inside Track on Trade Talks

(Bloomberg) -- For many China observers, one question has popped up since a pair of President Donald Trump’s tweets roiled Chinese stocks this week: Who or what is Taoran Notes?

As most of China’s media fell into collective silence Monday following Trump’s threat to escalate the trade war, Taoran Notes, a once obscure account on Tencent Holdings’ WeChat platform, somehow escaped the intensified censorship. It became one of the few voices offering an opinion on China’s negotiation strategy.

In a 1,500-character commentary published Monday, Taoran warned the U.S. not to fantasize about China making concessions that will damage its own interests. The comment was later re-published by the WeChat account of People’s Daily, a rare move for the official newspaper of the Communist Party.

“There’s no winner in a trade war,” Taoran commented in the post. “If someone cannot see this after more than a year of battling, the reality will teach him over and over again, until he realizes it.”

While the hawkish comment isn’t unusual, it stood in contrast against the tight-lipped Chinese media. Outlets such as the Xinhua News Agency offered little information Monday on what helped wipe out $487 billion in value from the Chinese stock market. Posts and stories about Trump’s tweets to impose more tariffs on Chinese imports were deleted from social media platforms. More reporting started to surface Tuesday, but the news was still limited to a few outlets, and generally took a measured tone.

“Taoran Notes must be backed by the government,” said Hong Hao, chief strategist at Bocom International Holdings Co. in Hong Kong. “Otherwise, how come it is allowed to publish comments on trade when nobody else can? The government is managing the public expectations.” Hong said he’s started to follow Taoran Notes as a way to read the tea leaves of China’s negotiation strategy.

The blog is associated with the Economic Daily, an official newspaper backed by the State Council, according to people in various state media organisations. Taoran might refer to the Taoranting Park, which is a short walk from the newspaper’s headquarters in Beijing.

Taoran Notes didn’t respond to a WeChat message asking for comment. Contact numbers listed on the Economic Daily’s website went unanswered.

Started in August 2015, Taoran Notes initially published articles on a wide range of topics, from book reviews to commentary on the Federal Reserve’s policy. But since October 2018, it has almost exclusively followed the development of the Sino-U.S. trade negotiations. Some of the observations proved to be prophetic.

A week ago, it noted that challenges had increased "exponentially" as talk approached the final stage and called for preparations for “accidents.” In March, it disclosed that the two sides argued for more than two hours over the use of one word in preparing a document, an anecdote that was later reported by other news media.

“Its reading on the trade situation has proven to be quite prescient,” said Hong. “It warned that the going will get tough a few days ago. It was against the consensus at the time.”

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