Financial Journalism and Market Reforms in China

Financial journalism in China is a product of market reforms as well as a means for promoting reforms. While anchored in the journalistic practices of mainland China, it has nevertheless been allowed more freedom to debate future paths for the nation\'s development. It is the only area in which the media can quite openly discuss major policy issues that can lead to redistribution of economic interests and affect people\'s lives. In both quantity and quality of output, China\'s financial journalism is moving rapidly, if somewhat unevenly, toward standards set by major Anglo-American financial news publications.

Unlike in the West, where financial journalists rarely consider themselves as architects of a new social order, Chinese practitioners see market reforms as the means to an end. They believe that serious financial journalism must concern itself with social justice.

With encroaching influences from commercialization of the media and threats of litigation, financial journalists face some of the same pressures as their Western counterparts. Moreover, they are still shackled by the slow-changing Chinese institutional and legal system.


Giant Strides In Two Decades

Financial journalism loosely encompasses coverage of macro-economic news, financial markets, and corporate news. In other words, it refers to news about the capital markets. This largely excludes consumer-oriented and personal finance reporting. In China, financial journalism is sometimes called \"economic news（經濟新聞）, but more often \"financial and economic news（財經新聞）, as opposed to \"business news（商業新聞）or \"industry news（產業新聞）.

Back in the 1980s, the mainland media helped introduce concepts about changing relationships between production and consumption ushered in by market reforms. Enterprises and individuals need timely and accurate information to make economic decisions. To promote market efficiency, financial journalists were given more latitude to experiment with new genres in order to get the messages across more effectively. Modern communications theories, which focus more on the needs of the recipients than on the communicators, were also introduced to give the new approaches a theoretical underpinning. Background news, forecast, analysis and investigative reporting have since become regular features in many financial publications and broadcast programs.

After the launch of China\'s stock markets in 1992, financial news has explained them to, and guided, the growing number of investors in the burgeoning capital markets. More than 60 million Chinese shareholders now follow the financial news for market information.

Financial news in all forms of media has proliferated: from 5 economic papers in 1979, the number rose to 112 in 1986. Nowadays, over 500 newspapers, except the People\'s Daily, have financial pages. Specialized financial weeklies and monthlies flood the newsstands. In the broadcast media, China Central Television （CCTV）has its dedicated financial channel and half a dozen regular financial programs on other channels. The big-budget China Wealth（財富中國）show produced by the provincial Hunan Satellite TV and sold to other broadcasters was a national hit.


Competition and Growth

In the third decade of market reforms, the three \"securities dailies\" - China Securities Daily（Beijing）（中國證券報）, Shanghai Securities Daily（上海證券報）and Securities Times Daily（Shenzhen）（證券時報） - are the authorized outlets for official news from the China Securities and Exchange Commission, as well as for corporate announcements. Unsurprisingly, they have kept to the stultifying tradition of mouthpiece journalism.

A glance at some of the glossy, sumptuously produced business magazines should be enough to convince readers of the influence of U.S. publications such as Fortune and Forbes. Skillfully packaged profiles of successful entrepreneurs and stories of companies making difficult decisions for growth are the main fare of many popular financial magazines.

Fierce competition among the financial news publications has reshuffled the positions of the dominant players in the early years. It has also significantly raised the bar of entry into the arena. Papers such as China Business Times（中華工商時報）and China Business（中國經營報）are yielding their leading positions to the new titles such as Economic Observer （經濟觀察報）and 21st Century Economic Herald 21（世紀經濟報導）.

Still, media observers believe that the market for financial journalism still has much potential. With China\'s entry into the World Trade Organization and the deepening of reforms, ordinary Chinese are hungry for more information on changing regulations and new investment opportunities. They will demand in-depth coverage to help them make economic decisions.


Investigative Reporting

Investigative reports of fraudulent accounting practices and market manipulations constitute some of the most remarkable work of Chinese financial journalism. The Guangxia（廣夏）Group was a high-flying property and foreign-trade company listed on the Shenzhen Stock Exchange. Last year, Beijing-based Caijing（財經）magazine published a lengthy expose after its team of investigative reporters probed the company\'s claims of rising export sales but found no evidence in the public documents at China\'s Maritime Customs Bureau. As a result of the expose, trading of the stock was suspended.

Throughout the summer, the Guangxia story stirred heated debate and finger-pointing at the media. Critics charged that the media turned a blind eye to the irregularities at the company, which had long been suspected by experts. Instead, it played to the tune of the rising market without alerting investors to the mounting risks. Only after the Caijing report did other media outlets jump on the bandwagon condemning Guangxia.

Hu Shuli（胡舒立）, widely recognized as one of China\'s most influential journalists, is the managing editor of Caijing. A feisty veteran reporter who began her career writing about politics, says that her models were Bob Woodward and Carl Bernstein of Watergate fame. She wants to pursue investigative reporting of market manipulation and corporate malfeasance with the same kind of thoroughness and tenacity. \"In China, financial journalists basically can probe as deeply as they want by just relying on publicly available documents,\" she says. \"This is an area that should fire up the ambitions of enterprising reporters.\"

China Securities and Exchange Commission, the market regulator, subsequently praised Caijing for exposing corporate wrongdoing and contributing to the healthy development of the country\'s stock market.

What makes Caijing willing and able to venture into areas that other media outlets dare not tread? Some observers suggest that the publication has strong support from high authorities to help curb market abuses. The corporate parent of Caijing is the Stock Exchange Executive Council (SEEC), the think-tank that helped launch China\'s stock exchanges in 1993. The stated objectives of the Council are to promote the formation and development of China\'s securities markets and the restructuring of the nation\'s financial markets.


Litigation and Commercialization

Despite restrictions on private ownership of mainland media, many financial news publications have struck deals with investors for joint operations. While outside participants tend to steer clear of core editorial decisions, commercial influence has brought changes to packaging methods to attract readers and viewers. That has unleashed a creative energy to experiment and to push the limits, which are still set by the state. There are negative effects too.

Impatience with thorough verification and investigation, a pandering to consumers\' penchant for quick wealth, and the practice of \"paid journalism\" have significantly undermined the credibility of financial journalism.

In recent years, defamation lawsuits have become a new weapon wielded by companies to silence critical reports. Despite its professional acclaim and high-level connections, Caijing was not immune to legal action. In an article published in March 2002, Pu Shaoping（蒲少平）, a stock analyst, wrote that Shenzhen Fountain（世紀星源）, a property and infrastructure company, had inflated certain assets on its financial documents. The company promptly filed a suit against the writer and the magazine, claiming that the sources used were \"questionable\" and his personal judgment was flawed. Ms. Hu penned a commentary in the following issue defending the magazine\'s right to publish critical articles, which in turn prompted the company to file a second suit, seeking damages totaling 3.08 million yuan.

In a swift judgment, which surprised many observers, the local court of Shenzhen ruled against Caijing and ordered it to pay 300,000 yuan and to issue an apology. Caijing has said it would appeal.


Progressive Ideals and Compassion

The editors of several leading financial publications, gathering in a recent round table discussion, said spurious lawsuits sap their energy and hurt their daily work. But they saw no immediate solution to the problems, which had to do with China\'s legal system and, to a less extent, the absence of a media law.

The editors also agreed that responsible financial journalism should serve as a platform for social change and justice.

But many editors admitted that the pressure from the growing influence of investors, from the government and from litigation threats has made their jobs increasingly difficult.

The editors say that \"humanistic compassion\" （人文關懷）must be an essential quality of financial journalists. Practitioners should strive not to make a few rich, but to raise concerns about the more vulnerable members of society. It is not unusual to find articles in financial news publications on the woefully inadequate public healthcare in the countryside and the plight of migrant workers.

Ultimately, the topics covered by financial journalism will touch on the reforms at the most basic level. The question is when does financial journalism become political journalism - a much more sensitive area in China. The World Economic Herald（世界經濟導報）, which transformed itself from an economic forum into a political one, was shut down in 1989. The consensus among the financial editors is that important issues must be discussed, but to confront sensitive issues prematurely is suicidal. The key is to know the constantly changing parameters and the timing for striking out. After all, practicing quality journalism is not for the faint-hearted.