China currency rates

The internet is abuzz with news that Chris Devonshire-Ellis of China Briefing may have influenced movement in the Yuan-Dollar conversion rate by what is being described by Chinese governmental authorities on the China Banking Regulatory Commission website as a “pure fabrication.” To summarize, China Briefing Magazine did a post claiming to have interviewed a Chinese governmental official who talked of the Yuan weakening to around CNY6.9-CNY7.0 against the dollar. The Chinese government subsequently went on record denying this and even appearing to deny any such interview took place.

Or as stated by The Wall Street Journal in its initial story:

In a China Briefing story Wednesday, China Banking Regulatory Commission Chairman Liu Mingkang was quoted as saying the yuan may weaken to around CNY6.9-CNY7.0 against the U.S. dollar.

The CBRC denied its chairman had been interviewed by China Briefing.

Later Wednesday, China Briefing issued a clarification on its Web site, backing away from attributing specific dollar-yuan levels to any government officials.

The author of the reports, Chris Devonshire-Ellis, told Dow Jones Newswires that specific levels came up during discussions with government officials, but he declined to say who made the comments.

The China Banking and Regulatory Commission has issued its own statement [link no longer exists], appearing to deny such an interview ever took place and calling news of it a “pure fabrication:”

The website CHINA-BRIEFING published an article on Feb 18, 2009 with CBRC Chairman’s photo and opinions. The CBRC hereby makes the statement that no CBRC officials have been interviewed by this media or by the author of this article. This news is a pure fabrication.

A Reuters news service article seems to say China Briefing itself is no longer certain who exactly it interviewed:

China Briefing magazine first attributed the comments to National Development and Reform Commission deputy head Zhang Xiaoqiang but later issued a correction, saying they were by Liu Mingkang, head of the China Banking Regulatory Commission.

My email in-box has been filled with all sorts of good questions, the answers to which I do not know:

1. Assuming the alleged interview regarding the Yuan rate never occurred at all, might those who lost money on the fluctuations have a cause of action against China Briefing for having claimed to have conducted it?

2. Assuming the alleged statement regarding the Yuan-dollar conversion was never given to China Briefing, but that China Briefing merely made an “error in transcript and translation,” might those who lost money on the fluctuations have a cause of action against China Briefing?

3. Might there be criminal liability, particularly if it is later determined that this news was spread intentionally so as to influence the market?

For more on this, check out the following:

  • Fear of a Red Planet:I believe this is called “self-pwnage” : Chris Devonshire-Ellis interview with CBRC Chairman “‘pure fabrication.’
  • This Dow Jones newswire story [link no longer exists] quotes someone as calling the whole China Briefing thing a “farce.” Perhaps it was just a farce, but if so, why?
  • Marc van der Chijs’ Shanghaied has come out with a post on this, entitled, “A fabricated interview is not a smart idea.
  • Gongshangfa has a post, entitled, Chris Ellis – Fake Lawyer, Fake Interviewer? [link no longer exists] in which he calls for Mr. Devonshire-Ellis to “clear up the confusion.” This post also hosts one iteration of one of the alleged interviews (unfortunately, this is a somewhat later, somewhat more “harmonized” version) with Banking Commission Chairman Mr.Liu Mingkang.
  • China Stakes does a fine job covering the story in a post, entitled, RMB Rumor Briefly Roils Markets before Denials, [link no longer exits] by setting out what appears to have actually happened here and concluding that “it is still not clear when and where Ellis interviewed the two officials.”
  • A Modern Lei Feng has a nice summary post, entitled, On a Carousel.
  • Cn Reviews explains how unlikely it is that such an interview ever took place, in its post, entitled, Chris Devonshire-Ellis apology and RMB/USD exchange rate [link no longer exits]

There are a number of very basic lessons to be learned from all this:

  1. Tell the truth.
  2. If you are going to report on a conversation with a Chinese government official, make sure you have permission to do so; if you do not have permission, do not make any attributions to a particular person and keep the statements at least somewhat vague.
  3. If you are going to issue a story with such clear potential to move markets, make sure you have your facts straight before doing so.
  4. If you are going to issue a story with so much potential to move markets and then your facts get questioned, hire a top level PR agency.

Readers, what do you think? As many of you know, Chris Devonshire-Ellis is a controversial figure with a tendency to try to shut down those posts he does not like (see here and here. I do not wish to be subject to a Chris Devonshire-Ellis onslaught so I ask that those who comment stick to the main issues and not make personal attacks or accusation, requiring us to edit or delete.

UPDATE: A Google search reveals that China Briefing has now pulled both of its alleged interviews from its site.

FURTHER UPDATE: In an exceedingly blandly entitled post, “NDRC and CBRC Notice,” [link no longer exists] Chris Devonshire-Ellis has now issued an apology of sorts, for what he calls a “breach of etiquette:”

The National Development and Reform Commission and the China Banking Regulatory Commission have issued statements on their respective websites concerning interviews held with agency officials that appeared on this website. As they state, that these were not “official” meetings. Accordingly, I felt it was now prudent to follow their lead and have removed the articles from our website, together with the accompanying photographs.

We acknowledge that only officially recognized statements issued by the agencies should have appeared. The articles did not fall into this category.

I wish to apologize to the agencies concerned for this breach of etiquette.

Chris Devonshire-Ellis

Print:
EmailTweetLikeLinkedIn
Photo of Dan Harris Dan Harris

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network. 

Dan is a founder of Harris Bricken, an international law firm with lawyers in Los Angeles, Portland, San Francisco, Seattle, China and Spain.

He primarily represents companies doing business in emerging market countries, having spent years building and maintaining a global, professional network.  His work has been as varied as securing the release of two improperly held helicopters in Papua New Guinea, setting up a legal framework to move slag from Canada to Poland’s interior, overseeing hundreds of litigation and arbitration matters in Korea, helping someone avoid terrorism charges in Japan, and seizing fish product in China to collect on a debt.

He was named as one of only three Washington State Amazing Lawyers in International Law, is AV rated by Martindale-Hubbell Law Directory (its highest rating), is rated 10.0 by AVVO.com (also its highest rating), and is a recognized SuperLawyer.

Dan is a frequent writer and public speaker on doing business in Asia and constantly travels between the United States and Asia. He most commonly speaks on China law issues and is the lead writer of the award winning China Law Blog. Forbes Magazine, Fortune Magazine, the Wall Street Journal, Investors Business Daily, Business Week, The National Law Journal, The Washington Post, The ABA Journal, The Economist, Newsweek, NPR, The New York Times and Inside Counsel have all interviewed Dan regarding various aspects of his international law practice.

Dan is licensed in Washington, Illinois, and Alaska.

In tandem with the international law team at his firm, Dan focuses on setting up/registering companies overseas (via WFOEs, Rep Offices or Joint Ventures), drafting international contracts (NDAs, OEM Agreements, licensing, distribution, etc.), protecting IP (trademarks, trade secrets, copyrights and patents), and overseeing M&A transactions.