Perception Matters: Evidence from Cross-Language Media on the Chinese Economy

A new working paper from the Boston University Global Development Policy Center developed new cross-language sentiment indices capable of measuring and comparing how English- and Chinese-language media portray China’s economy over time. The research revealed a persistent perception gap between English and Chinese media sentiment toward China’s economy, with distinct links to market prices and monetary policy.

The researchers analyzed more than 1.2 million news articles published between 2002 and 2020 in both English and Chinese, classifying tone at scale across both languages.

Main findings:

• Economic perceptions differ systematically across English- and Chinese-language media, with distinct relationships to market prices and monetary policy.
• Over the course of 18 years of coverage, Chinese-language media were consistently more positive about China’s economy compared to English-language media. This “perception gap” has widened over time and remains persistent.
• But the two sentiment signals are associated differently with markets and policy.
• When the two measures are considered jointly, equity and commodity prices respond primarily to English-language sentiment.
• The picture is different for monetary policy: policy variables respond to sentiment changes across both languages, with substantially stronger responses when English- and Chinese-language sentiment move together.

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