Media Freedom in China - The Case of Caijing

The answer as to whether China has a free press is, according to Hu Shuli (胡舒立), both yes and no.

In a 2003 article, Hu noted that while the government's attitude towards the press is not one of constant suspicion, the line between the permissible and the prohibited is constantly shifting.

The editor of Caijing (财经) should know, as the business publication was one of the pioneers in pushing the unclear limits of what was "permissible and prohibited."

In its first issue in April 1998, Caijing published a cover story on a little-known real estate company whose share prices rocketed by 400 per cent. The company's stock was suspended from trading in 1997, after it was charged with over-stating profits. A few insiders had been tipped off and unloaded their shares, while 50,000 individual investors lost millions of dollars.

Even though everyone knew what happened, no one dared to publish details of the inflated profits, or the tip-off - until Caijing broke the silence.

As Hu recounted: "Our article offered no investigative scoop or new information. By simply reporting the story and pointing out that the system had failed to protect small investors, we caused a stir."

In October 2000, Caijing published an inside story of fund management, which disclosed a previously suppressed Shanghai Stock Exchange analysis. In the analysis, China's investment-fund management companies were said to have traded illegally and irregularly on the securities market. As it turned out, Caijing was the first serious publication to report criticism of the fund-management sector and the stock market.

After the article was published, the 10 government-affiliated companies mentioned in the article threatened to sue. But Caijing's readers defended the publication. Even prominent Chinese economist Wu Jinglian (吴敬琏) threw his weight behind Caijing.

Hu recounted that the story was a watershed for Caijing and the Chinese media, as the government left the publication alone, "not even criticising our report." In a speech around that time, China Securities Regulatory Commission chairman Zhou Xiaochuan (周小川) even announced that the securities market welcomed "media criticism and supervision."

Since then, China's financial media had become bolder, and Caijing had exposed further price manipulations and other financial irregularities.

In 2002, the publication reported that Yinguang Xia Holdings, then China's second largest listed company in China's A share market, posted a falsified online claim of 700 million yuan in profits. Within hours of publication, the company was suspended for trading, and within a week, security regulators were investigating.

But despite these successes, Hu noted that official pressure remained high, information that should have been made public is often not available, and key officials often refused to be interviewed. Some listed companies even tried to stop Caijing from publishing what they thought were negative stories about their companies by appealing to government agencies and officials.

Hu added: "There are no laws protecting the media or freedom of speech, and companies which don't like our reports can sue us for damaging their reputations. They usually win."

But despite the various obstacles, Hu remained optimistic that the media will eventually become a "viable monitor of Chinese industry, if for no other reason than that most people recognize by now that economic development will falter without it."

As Hu concluded: "After the public becomes familiar with Caijing's brand of journalism, it is sure to raise demands for more tough-minded and scrupulous reporting - not only on markets, but also on developments within people's communities and governments. Thousands of important stories remained to be told in China. Caijing is but one voice struggling to tell them."

We can only hope that Hu's predictions will be proven right sooner than we think.