Chinese journalist ‘confesses’ to market chaos: State media

Beijing, August 31

China’s main state broadcaster today paraded a financial journalist “confessing” to causing the stock market “great losses” as authorities seek to rein in a rout on the exchanges.

Wang Xiaolu, a journalist with the respected business magazine Caijing, was held after writing a story in July saying the securities regulator was studying plans for government funds to exit the market.

Beijing has launched interventions on a grand scale to try — with little success — to shore up plunging share prices after a debt-fuelled bubble burst in June.

Britain’s Financial Times reported at the weekend that China had decided to stop buying shares in favour of intensifying a crackdown on those “destabilising” the market, although there was speculation as recently as last Thursday that government funds were acquiring stock.

The Ministry of Public Security also said at the weekend that 197 people had been punished for “spreading online rumours” on several issues, including the markets and giant deadly blasts in the port of Tianjin on August 12. It gave scant details.

China has unleashed an unprecedented package of support measures, including using state-backed entities to buy stocks and cracking down on “malicious” short-selling — when investors sell shares they do not own in anticipation of a fall in their price.

But the moves have done little to calm investors and concerns about the health of China’s economy and its ability to manage its finances has infected world markets, sparking one of the worst global sell-offs since the financial crisis on August 24.

Chinese shares continued their slide today, with Shanghai down 1.45 per cent in the afternoon, hurt by profit-taking after two sessions of sharp gains and by economic worries before the release of manufacturing data.

State broadcaster CCTV showed Wang as saying that he had sought to create a stir and catch the eyes of readers with his articles.

“I should not have published a report that heavily and negatively affected the market at such a sensitive time... (I) caused such great losses to the country and to stock investors. I am deeply sorry,” he said. — AFP