Tea Leaf Nation
Chinese Web Users Aren’t Blaming Detained Journalist for Market Panic
Wang Xiaolu has confessed to "spreading fake information" on state television. Many think he's being scapegoated.
China’s stock markets have been in free-fall for some time. Now, so is a financial journalist who had the temerity to write about them. On Aug. 31, Chinese journalist Wang Xiaolu confessed on state-run China Central Television to writing a July 20 piece for respected Beijing-based finance outlet Caijing that employed “abnormal channels” of information gathering and relied on “private inquiries” and “subjective judgment.” According to an Aug. 31 report by state news agency Xinhua, Wang, whose fateful article said that China’s securities regulator was considering pulling out of the market the capital it had earlier injected in order to prop up falling prices, now stands accused of “colluding with others and fabricating and spreading fake information on securities and futures market.” It’s true that China’s securities commission debunked Wang’s article the same day it was published. But China’s vocal web users don’t seem willing to blame him for what happened next.
Wang was detained on Aug. 25, the day after the Shanghai Composite fell 8.5 percent, the biggest single-day drop since 2007 and part of a brutal run that has caused trillions of dollars’ worth of paper wealth to evaporate. China’s tightly controlled media have widely reported Wang’s confession, portraying him as contrite, but undoubtedly guilty. Many Chinese web users, meanwhile, aren’t buying it. “They’ve finally found a sacrificial lamb,” wrote one user in a popular comment on Weibo, China’s huge microblogging platform. “This is always how they deal with major problems,” wrote another user. Wang Ran (no relation), the influential CEO of Beijing-based investment bank China E-Capital, directly questioned the allegations against the accused reporter, who had relied on private sources for his story. “If soliciting private opinions in order to obtain newsworthy information is wrong,” wrote Wang Ran, “then journalism as a profession simply should not exist.”
It seemed odd to single out Wang. State-run media had widely hailed the nearly year-long bull market that saw the Shanghai Composite, China’s benchmark index, rise 150 percent since 2014. But real economic factors didn’t seem to underlie such stunning market growth; the Chinese economy grew seven percent in 2014, its slowest increase in 25 years, and this year indicators coming from the world’s second largest economy herald yet slower growth. Even as outside observers expressed concern at spiraling equities prices, state media continued to predict a bull, only setting the stock market up for a more spectacular slide.
A number of users specifically invoked an April 21 article from party mouthpiece People’s Daily, which claimed that President Xi Jinping’s economic reform policies had created the flourishing market — the Shanghai Composite Index had just reached 4,000, heights it hadn’t seen since 2008 — and that investors could confidently expect the trend to continue. “How is it that all the People’s Daily’s false rumors such as ‘4,000 being just the start of the bull market’ aren’t going to be punished?” asked one user in a popular comment. “Don’t the media outlets that proclaimed, prior to the stock market crash, that the bull market had just begun…also bear responsibility?” another Weibo user asked.
Wang’s on-air confession — a tactic that Chinese authorities have employed with increasing frequency since Xi assumed office in 2012, and generally signals a predetermined legal outcome — is of a piece with the ruling Communist Party’s efforts to pin blame elsewhere. The party has for decades looked to economic performance to bolster domestic support; in the wake of the country’s stock market crash, state-run media outlets have tried to shift culpability to short-sellers, the U.S. Federal Reserve, and global gas prices for the nosedive. Now officials are pointing fingers at journalists. “CCTV, are you a media outlet or a court?” wrote another in a comment on CCTV’s Weibo post announcing the confession. “Is it now enough for someone to just confess on your [airwaves]? You should change your name to China Central Tele-Judiciary.”
Image: Screenshot from LeTV