1 Talking Point 6 Week in 60 Seconds 7 China Ink Week in China 8 M&A 9 China Consumer 11 Auto Industry 13 Banking and Finance 14 Society and Culture 1 November 2013 18 And Finally Issue 214 19 The Back Page www.weekinchina.com Muddied debate m o c . n i e t s p e a t i n e b . w w w Reporter comes clean, but no on emerges spotless from the Chen Yongzhou affair Brought to you by Week in China Talking Point 1 November 2013 Chequebook journalism Scandal as reporter admits he was paid to fabricate Zoomlion articles Chen Yongzhou: the CCTV caption reads “I am willing to plead guilty, and repent” n “our judicial system” the pub - called the perp walk “outrageous” it was broadcast before formal Ilic can see the “alleged perpetra - and a “circus”, drawing analogies charges had even been lodged tors”, explained New York’s mayor with “Roman times”. But though his against him. Michael Bloomberg, after an angry remarks clarified his disapproval of In fact, the case looks like a French response to footage of for - the practice – Bloomberg had “flip- murky affair for almost all the par - mer IMF chief Dominique Strauss- flopped” from two months earlier, ties involved; Chen himself, his em - Kahn being paraded in handcuffs the Huffington Post thought – ployer and a number of other outside a New York police station. “I Bloomberg edged away from any re - newspapers, as well as the police, think it is humiliating,” Bloomberg sponsibility. The mayor told media the state broadcaster CCTV, and per - agreed. “But if you don’t want to do he had “no say” in the police de - haps even two of China’s largest the perp walk, don’t do the crime.” partment’s use of the practice. construction equipment makers. All It turned out Strauss-Kahn didn’t Pre-trial perp walks came to were drawn into the sordid row one P h o t o commit the crime in question, with mind in China too this week. This way or another. S o u r c a US judge dismissing his indict - came in the wake of news reporter e : I m a ment for sexual assault in 2011. Ac - Chen Yongzhou being treated to the What’s the background to the g i n e C cording to Reuters, the mayor then local equivalent: a televised confes - story? h i n a changed his tune. Mayor Bloomberg sion on national television. Notably Chen Yongzhou, a reporter at New 1 Week in China Talking Point 1 November 2013 Express Daily in Guangzhou, was called to a police station in Guangzhou last month about a theft that he had previously reported. He went with his wife. When they ar - rived, the couple were detained by officers from Hunan and driven to the provincial capital Changsha where Zoomlion, one of China’s largest manufacturers of construc - tion machinery, is headquartered. For almost a year Chen had been writing articles accusing Zoomlion of malpractice including siphoning off state assets and falsifying finan - cial information. In May he caused a major stir after claiming to have further information that the com - Zoomlion claimed Chen was a “black hand” and denied his claims pany was falsifying its accounts. Zoomlion’s shares were suspended the next day with another splash Sina Finance’s Xiang Xiaotian from trading as a result and lost under the headline “Again We Ask was one of those to laugh off the more than Rmb1.3 billion ($213 mil - For His Release”. charges, referring back to a recent lion) in market value, despite a re - “Uncle Policeman, Big Brother feature from the state broadcaster buttal of the allegations as “false, Zoomlion, we beg of you, please set that slammed overpriced coffee groundless and misleading”. Chen Yongzhou free!” it begged. (see last week’s issue). “Following In June Chen went a step further, It questioned too why Chen’s the same logic, I propose that Star - reporting alleged wrongdoings to case was being treated as a criminal bucks report CCTV to the Beijing stock market regulators, although affair and not a civil action. “We Public Security Bureau for similar the China Securities Regulatory have always believed that if we just reasons,” he scoffed. Commission said in a written reply go out and responsibly do our re - that it found no evidence of false porting, there won’t be any prob - There was suspicion of special sales or conflicting data. lems and if by chance there are treatment too? Gao Hui, the assistant to the problems, we can print corrections Another implication in the media Zoomlion chairman, fired back via and apologise,” the editorial stated. was that Zoomlion was calling in weibo that Chen was a “black hand”. “If things are really serious, we pre - favours from its state-owned share - Chen and the newspaper launched pare for the courtroom, and if we holders in the Hunan government, legal proceedings for defamation. lose we pay compensation as it’s who own about 16% of the company. In early September Changsha po - demanded. If we must close our The fact that police from Chang - lice received a formal complaint doors, well then, that’s only what sha had travelled hundreds of miles from Zoomlion about Chen’s activi - we deserve.” to make the arrest in Guangzhou ties. Shortly afterwards he was de - Other commentators queried was soon triggering speculation tained on criminal charges of how to quantify damage to a com - that they were acting at Zoomlion’s damaging the company’s commer - pany’s reputation in a case like behest, with Southern Metropolis cial reputation. Chen’s (the South China Morning Daily citing evidence from netizens Post said that Zoomlion’s share that the Mercedes-Benz sent to col - How did the media respond to the price rose nine times out of 12 on lect Chen belonged to the company. arrest? the Hong Kong exchange on days he The newspaper also speculated After holding off on the story in published an article about the com - openly about the involvement of hope that its reporter would be re - pany, for instance). Elsewhere, wags the local government from Hunan. P h o t o leased, New Express went public on suggested that CCTV could get into “Even more unsettling is if local au - S o u r Wednesday last week with a front- trouble on the same basis, because thorities act only to serve local eco - c e : R e page story under the headline of its reports investigating the busi - nomic interests. And likewise if u t e r s “Please Release Him”, following up ness practices of foreign firms. local authorities ignore legal limita - 2 Week in China Talking Point 1 November 2013 tions and preventative regulations to pursue cases and arrest sus - pects,” it warned. “Not only is this the ugly result of the failure to limit power, but it becomes a serious ex - ample of power doing evil.” Others agreed that the Changsha authorities may have overstepped the mark. “The police are there to uphold the law, not to protect the backyard of a few special companies and people,” Yu Jianrong, a re - searcher at the Chinese Academy of Social Sciences, wrote on his weibo . “Changsha police must not remain silent,” the Beijing News also urged. “Please show what evidence you have in the light of day. Please let Continues to be in fierce battle with rival Changsha firm Sany the law decide whether to detain him or free him, not who has more hankered after money and fame.” best way to kill a conversation is to power or the loudest voice.” That elicited the promised cap- have CCTV announce that he’s doffing from New Express. “Chen guilty,” Fu Hualing, a law professor Then the confession… Yongzhou, a reporter from this at the University of Hong Kong, told Before the media campaign could newspaper, took money to publish Sinosphere, a blog produced by the build up further steam there was a a quantity of false reports … and our New York Times. shocking revelation. Chen admitted paper didn’t carefully scrutinise the Chen’s shaming is the latest in a to fabricating the stories or putting articles. Furthermore, the inappro - spate of public parades, including his name to material given to him priate actions taken afterwards se - that of Xue Manzi, an outspoken by a third party. He was transformed verely damaged our credibility and venture capitalist with more than 12 from hero to villain overnight. we were taught a lesson.” million weibo followers, who was ar - This was acutely embarrassing rested for soliciting sex. Xue made for New Express because it had How about the reaction since Chen his televised apology in September, promised only three days earlier was exposed? also admitting to making “irre - that it had checked all of Chen’s re - Unsurprisingly Chen’s supporters sponsible” comments on the inter - ports and discovered only one rela - have gone quiet, although his down - net. Some see his treatment as part tively minor mistake. fall will have done little to dissuade of a campaign to cower “Big V” per - “If Brother Policeman can find any the media that the police are too ea - sonalities online (see WiC206). evidence of shabby reporting on our ger to criminalise civil disputes. Liang Hong, a vice president in part, please make notice of it and we Legal scholars have also voiced China for GlaxoSmithKline, was will gladly doff our cap,” it assured. concerns about state TV’s new will - also filmed confessing to bribery as But by Saturday morning CCTV ingness to air confessions from sus - part of an ongoing probe into graft was showing Chen handcuffed and pects before formal charges have in the pharmaceutical industry.