Filling Void in China’s Financial News Reporting

BEIJING —  For Hu Shuli, managing editor of China’s first serious financial magazine, good journalism all boils down to one thing: Who pays for the taxis?

Fed up with the penny-pinching that she says prevents most Chinese journalists from doing their jobs well, Hu got backing from China’s nascent financial community for Caijing, the magazine she started up four years ago.

Now Hu is pioneering Western-style investigative reporting in a country where all but a handful of media are owned and run by the state, where reporters routinely get cash handouts at news conferences and where “freedom of information” is virtually unknown.

Caijing’s incisive reports on false financial data and other corporate misdeeds have made it a must-read for anyone in Chinese business. Political exposes remain off-limits.

“It’s very muckraking. It’s playing a role similar to that once played by “60 Minutes” in the United States, forcing people to take action,” said Andrew Rothman, a Beijing-based China expert.

Chinese companies are unused to such close scrutiny. One publicly listed real estate conglomerate recently given an unflattering analysis, Shenzhen Fountain Corp., is suing Caijing for about $375,000 for “damaging its reputation.” The suit does not question the facts reported in the story.

Until recently, investing in the 1,200 or so companies listed on China’s two stock exchanges, in Shanghai and Shenzhen, was an exercise of groping in the dark and gambling on guesswork.

Financial figures and managerial decisions usually disclosed in Western nations are kept secret. Though the government has increased disclosure requirements, the information reported is often suspect.

Hu saw a niche in that void.

“I realized there was a big space in the business and finance area and that people are interested in independent corporate news,” she said at the magazine’s Beijing headquarters.

A 20-year star reporter and editor who started out covering corruption scandals for the major Chinese newspaper Workers’ Daily, Hu launched Caijing in April 1998 with support from the China Stock Exchange Executive Council, a government-backed institute that promotes China’s financial markets.

From an unknown monthly with a staff of six, Caijing -- which translates into English as Business and Finance Review -- has grown into a glossy biweekly with a staff of more than 50 and an estimated circulation of 100,000.

Its reports have set off scandals over false accounting and poor corporate governance and have led regulators to crack down on investment trusts caught manipulating the market.

“They have scoops. It’s really professional journalism,” said Li Xiguang, a journalism professor at Tsinghua University in Beijing.

Frustrated by the meager budgets at China’s newspapers, Hu went to her first meeting with the Stock Exchange Executive Council armed with a wish list -- a healthy editorial budget.

“I pulled out a sheet of paper and said, ‘This is the money I want,” ’ Hu said.

That was a result of her experiences on newspapers where, she said, the first thing a Chinese reporter often asks when given an assignment is: Who will pay for the taxis? They can’t count on being reimbursed by their editors, she said.

“It was humiliating,” Hu said. “We felt we lacked the money to take a taxi, to stay in a good hotel, to use the phone. Everything. I just want to be a professional journalist with my own self-respect.”

Hu said her bosses at the council were more familiar with Western media than with Chinese journalism.

“They didn’t even know,” she said, “[that] local reporters take home ‘red envelopes” ’--cash payments, usually 200 to 400 yuan [$24-$48] slipped inside handouts at corporate news conferences.

Contrary to the norm in a political culture that treats media as Communist Party propaganda tools, Caijing enjoys editorial independence.

Officials have objected to Caijing’s coverage only once, Hu says. That was an early 1998 story about a company that went broke and was resurrected as a listing vehicle for a government-backed project in Beijing.

Regulators “at that time were not as open as they are now,” she said.

Li, the journalism professor at Tsinghua University, praises Caijing for its success. But he laments its limited influence, given that it reaches only an elite readership of investors and financial executives and must steer clear of politics -- the topic favored by Chinese readers.

“Caijing is a good beginning for change ... but press reform needs to reach the mainstream media, and that includes political decision making,” Li said.