China: Journalist ‘Confesses’ to Causing Panic by Reporting on Stock Market

The Associated Press
The Associated Press

Chinese journalist Wang Xiaolu has been arrested and has “confessed” to causing the stock market to crash in what the nation is calling its “Black Monday” last week. State media outlet Xinhua reports that nearly 200 others were also arrested for “causing panic” by “spreading rumors” in publications or on social media.

CNN reports that the Chinese government has arrested nearly 200 people and shut down 165 online accounts for allegedly spreading rumors that triggered panic among investors and caused the Shanghai Composite to fall by a staggering 8.5% last week. Xinhua cited specific examples of rumors allegedly designed to “cause panic,” including that a “man jumped to death in Beijing due to stock market slump” and large estimates of the death toll in this month’s Tianjin chemical blast. Official estimates remain in the hundreds, while some on social media have speculated the true number of those killed is in the four figures. Xinhua also alleges the government has arrested some for spreading “some seditious rumors about China’s upcoming commemorations of the 70th anniversary of the end of World War II,” but does not specify what those rumors are.

Xiaolu, a journalist for Caijing magazine, which reports mostly on the economy, appears to be the biggest name in the arrests, taking much of the blame in Chinese media for the stock market crash. Reports attest to Xiaolu being “placed under ‘criminal compulsory measures’ for suspected violations of colluding with others and fabricating and spreading fake information on securities and futures market.”

State media later reported that Xiaolu “confessed” to causing “panic and disorder” by reporting on the stock market. The government is claiming Xiaolu’s reports were fabricated and completely false, claiming he himself has confessed to inventing his reports, and thus causing “huge losses” to Chinese investors.

While China officially banned the use of torture to elicit confessions from suspects in 2010, human rights reports from as recently as May of this year have found evidence that police routinely beat and use other methods of torture to get suspects to confess, streamlining the judicial process by eliminating the need for a trial.

In addition to blaming social media users and respected journalists, the Chinese government has claimed that its recent stock market woes are the fault of the United States government. Central bank official Yao Yudong stated last week that the Federal Reserve was directly responsible for the stock market crash last Monday, thanks to reports that it might impose a new rate hike. Economists in the free world largely believe, however, that China’s devaluation of the yuan currency may have been as responsible for the market’s wild fluctuations as any international activity. China significantly devalued its currency at the beginning of August, in what appeared to be an attempt to save millions of Chinese jobs provided by foreign investors.

Washington Post report notes that many of the victims of China’s market meddling and its market’s subsequent fall are poor farmers, whom the government had enticed through state media to invest tens of millions, with the promise of leaving their economic classes and living a better life. Not only did state media convince the nation’s poor to invest their life savings as a patriotic gesture, state media reports encouraged investors to keep their money in the market through Black Monday, leaving them little hope of keeping any of it even if they caught on to the collapse earlier in the day.

Chinese state media continues to publish reports claiming that the economy is recovering and investment in China is wise. A column in Xinhua Monday claimed the stock market was “showing signs of encouragement” to investors and celebrated evidence “easing pessimism” about the market. The evidence? “China’s top economic regulator, the National Development and Reform Commission (NDRC) announced on Sunday better-than-forecast nationwide power use and railway freight figures ahead of schedule to reassure markets.”


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