Global stocks have been on one hell of a ride in recent days, and everyone is looking for a scapegoat.
International media have tended to focus on fears of an economic slowdown in China, and extreme volatility in the country’s stock market. Chinese state media, meanwhile, have emphasized the threat of a possible U.S. interest rate hike when discussing the selloff.
Both worries are legitimate. China is hugely important to the world economy, and a sharp slowdown would have far-reaching consequences. At the same time, plenty of countries stand to be negatively impacted by a Federal Reserve rate hike.
But how can the same story generate such a divergent tone and focus? In China, the answer is simple: Information is tightly controlled, and media can face penalties for breaking ranks and undermining the government’s messaging apparatus. The idea is that restrictions are needed to maintain social order.
What’s happening in the country’s stock market is the perfect example.
Compared to Western media, Chinese media outlets have taken a much rosier view of market events. On Wednesday morning, the homepage of China Daily, a state-run newspaper, barely mentioned the stock market panic, leading instead with stories about President Xi Jinping’s push to support economic growth in Tibet and the development of China’s youth.
The handful of China Daily stories that did mention stocks were short on analysis — one reported how China’s national and local leaders regard the stock market, concluding that they don’t see the current situation leading to a financial crisis.
While levels of coverage vary from day to day, China Daily sticks to the official government line. The newspaper did republish central bank statements from Tuesday announcing moves to boost the economy, for example.
Official state news agency Xinhua gave slightly more prominent placement on its homepage to coverage of China’s stock volatility and the global rout. But the agenda was apparent: The agency quoted experts saying that market panic is due to poor global economic sentiment, and that fears over China are overblown.
Chinese journalists routinely receive confidential propaganda directives about how certain stories should be covered.
California-based China Digital Times, which collects such memos, published one from late June that instructed Chinese media to avoid verbs like “slump” or “spike,” and warns journalists not to conduct in-depth analysis or speculate on a bull versus bear market.
The memo, published as China’s stock markets started to slide, also directed reporters to stick to information vetted and released by the China Securities Regulatory Commission, and to halt all expert interviews.
In China, consumers are often forced to reply on state media. Foreign news sources, and many social media platforms, are off limits. Google(GOOG), Facebook(FB, Tech30) and Twitter(TWTR, Tech30) are blocked in China, for example.