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Stock Market Meltdown Results in Media Crackdown

There’s not much reliable news in China about the current stock market crisis and that’s how the communist authorities want it to be. (Screenshot/YouTube)
There’s not much reliable news in China about the current stock market crisis and that’s how the communist authorities want it to be. (Screenshot/YouTube)

Chinese journalist Wang Xiaolu works for a respected business magazine but his reporting on China’s stock market turmoil has got him into trouble with the communist authorities.

Because his reporting on the market was deemed by the authorities to be “based on hearsay and his own subjective guesses” Wang had to read out a confession on a national state television broadcast on Monday reported Reuters.

“I acquired the news from private conversations, which is an abnormal way, and added my personal judgment and subjective views to finish this story,” said Wang in his confession reported Fusion.

“I shouldn’t have released a report with a major negative impact on the market at such a sensitive time,” he said.

“I shouldn’t do that just to catch attention which has caused the country and its investors such a big loss. I regret [it and am] willing to confess my crime.”

See China expert Gordon Chang’s view on why the communists are cracking down on the media and why they’re blaming others for their stock market woes:

It should be noted that Wang hasn’t been convicted of anything but that’s how it goes in China.

“A statement aired by a state-run broadcaster, before the ‘suspect’ has ever appeared in court, shows the lengths to which the Xi Jinping government will go to intimidate journalists,” said CPJ Asia Program Coordinator Bob Dietz.

As far as media goes in China, the Caijing business magazine, that Wang works for, is one of the better publications in what is a tough state governed industry to be in. By tough, I mean that there are 44 Chinese journalists who are jailed for just doing their job, making communist China the biggest jailer of media workers in the world.

Wang also joins nearly 200 Chinese who have been “punished” for spreading “online rumors about China’s stock market, the recent fatal explosions in Tianjin or other key events,” said the Chinese authorities on Monday via state run Xinhua.

According to a statement issued by the Ministry of Public Security those individuals punished have expressed repentance over their misconduct that have: “caused panic, misled the public and resulted in disorders in stock market or society.”

Meanwhile Chinese newspapers have been ordered not to cover market volatility at all, and to remove past coverage says the Washington Post.

On the day after the Shanghai Stock Exchange composite index plummeted 8.5 percent, the People’s Daily had zero information on the stock markets within its 24 pages. Meanwhile Baidu, China’s top search engine, censored search results related to the crisis, the Post said.

See more about that below:

“The crackdown smacks of desperation. China’s communist government is looking for scapegoats for its mistakes,” said part of an editorial in the New York Post.

“The country’s leaders are primarily responsible for turning the stock market into a casino by encouraging individual investors to put their savings into the market and to borrow money to buy stocks,” it read.

How we got here

China’s stock market has been in melt down for the past several months largely because it was massively overheated. As mentioned above the Chinese authorities allowed and encouraged ordinary folks to enter the stock market with many of them taking out loans to participate.

Quickly the Chinese stock market became flooded with money from these vast numbers of small time investors who bought whatever stocks they could, no matter how overpriced they may have been. It made for a volatile mix and the market was overvalued. The bubble popped and people have been trying to get out bad stock ever since.

State meddling has done little to stop the rot and since June, China’s market has dropped to nearly 40 percent. Last month it shed 12 percent of its value.

For a smart overview on what’s being happening in China’s stock-market see below:

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