The Chinese regime followed its recent market meltdown in true Maoist fashion this week. It dragged out a journalist, Wang Xiaolu, to confess that he helped start the crash. It cannot be the centrally planned, artificially dumped up system itself. No, it was a journalist.
He was not alone. China featured a slew of confessions from brokers and journalists to take the blame for the biggest stock market sell-off since 2008. This is all of course pre-trial since such cases are preordained in the Chinese system.
The 0.8 per cent drop Monday was a 12 per cent fall for August and a near 40 per cent fall from the end of June. That came after a 14 per cent slump in July. More than $5 trillion (£3.2 trillion) was wiped out.
Wang Xiaolu, a reporter at the Caijing business magazine, confessed to writing about the Chinese stock market “based on hearsay and his own subjective guesses” that “inflicted huge losses on the country and investors”. It is clearly an absurd charge but vintage Mao. The problem is not the system but reporting on the system.
Liu Shufan, an official with the China Securities Regulatory Commission (CSRC), also confessed to crimes including insider trading, using his position to boost a listed company’s share price in return for bribes. He was joined by Citic executives Xu Gang, Liu Wei, Fang Qingli and Chen Rongjie who confessed to insider trading.
For years, many have expressed doubt over the stability of the Chinese markets with such heavy government intervention and control. In my visits to China, I have often remarked on how fragile that system seemed with huge numbers of forced retirements at early ages and massive government programs. Then there is the continued rampant corruption and centralized planning. It will take more than parading out reporters for blame to protect the ruling class in China from the mess that they have created.