Wang Xiaolu. Screenshot/CCTV. All rights reserved.On 31 August, Wang Xiaolu, a business reporter at the Beijing-based finance magazine Caijing, apologised on the state broadcaster CCTV for “causing the country and its investors…a big loss”. Wang stated, possibly under duress, that he was willing “to confess my crime”. He is accused of “colluding with others and fabricating and spreading fake information on the securities and futures market.” With a public ‘confession’ by the prominent journalist aired on state television, the campaign by the Chinese government against those deemed to be responsible for the recent stock market turmoil reached new heights.
The frustrations of the Chinese authorities are huge. The ‘national team’ (a collective of state-directed financial institutions) spent around 200 billion dollars in an effort to keep shares up, but the index is still far lower than in June, before purchasing activities started. In order to prevent such a loss ever occurring again the authorities have since initiated a crackdown. The Chinese government has opted for a ‘whatever it takes’ approach to tame market forces, but with little success so far.
Under president Xi Jinping, the government has regularly paid lip-service to the importance of free markets. Unquestionably, they have been crucial to the development of China, ever since Deng Xiaoping ‘opened up’ the country during the late 1970s. In particular, free international trade has been a key factor in China’s rise – no other country has profited so much from its membership (since 2001) of the World Trade Organization, which enshrines free trade as its core principle.
