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BANKING

Silence is golden for the foreign investor. (China's economy and foreign investment)

SILENCE IS GOLDEN FOR THE FOREIGN INVESTOR

Even veteran China traders have been shaken by the sharp fall in Beijing's credit rating this summer. As for Chinese foreign trade and investment officials, they confess themselves appalled by the negative image that has suddenly emerged to dash Beijing's hopes of a record foreign capital inflow for 1986.

The Chinese authorities have acted quickly to supress the publication of companies' complaints. The arrest and expulsion of John Burns, the New York Times' Beijing correspondent, has been read as a warning. Burns was highly respected for his evenhanded reporting but a motor-cycle trip through central China led to allegations of espionage. An executive of a major American bank said: "You've got to be really desperate from now on to talk frankly on the record. Beijing's put us all on notice to keep our gripes to ourselves.'

A Chinese official from the Ministry of Foreign Economic Relations and Trade (Mofert) confirmed this interpretation. "We treat the trader and investor from abroad as a guest, allowed into our home. And our Chinese saying is that family disgraces should not be made public.'

The first clear evidence of a crisis of confidence came in the spring.

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