Plunging Chinese Stock Market Was Barely Covered In China

Transcript

SCOTT SIMON, HOST:

China's plunging stock market has been one of biggest stories in the world, even as it's rebounded in the last couple of days. But at first, the story was barely covered in China's official state communist party media. NPR's Frank's Langfitt is in Shanghai. Frank, thanks for being with us.

FRANK LANGFITT, BYLINE: Great to be here, Scott.

SIMON: What was it like to follow the state-controlled media?

LANGFITT: Well, it was interesting, because, initially - in the first couple of days - there was hardly any coverage at all. Take the People's Daily - that's the Communist Party mouthpiece - on Tuesday, when it came out - and keep in mind, on Monday, the stock had dropped over 8 percent - the stock market - and it was the worst since the global financial crisis. But if you looked at the front page of the People's Daily, it didn't have anything. There was a headline about a government development project in Tibet and a feature on how beautiful Haikou, this city in Hainan - China's Hawaii - is. When you turn to CCTV - that's China Central Television - their lead story was a press conference on plans for the celebration of the 70th anniversary of the end of World War II. So it was as though it actually didn't happen.

And early in the week - it was interesting - even if you went online, there were attempts to block online search terms. So, for instance, if you went to Baidu, which is the Google of China, there's a Chinese expression, guzai, which means stock market disaster - you couldn't search that.

SIMON: But in this day and age, how long can you really ignore a story of this magnitude?

LANGFITT: Not that long. And, of course, the commercial media was covering it. They didn't focus so much on the Chinese Communist Party's culpability, but they did begin to focus on it. And by midweek, even while the market was down, the state media did get involved and they pivoted. And what was interesting there, is they kind of went on the offense. And they started to, kind of, blame outsiders - particularly the United States. The New China News Service quoted a central bank researcher who said that the global market drop was because of the fear of a fed rate increase, which, of course, would increase borrowing costs. But, of course, there was no evidence for that, and most analysts who'd been looking outside of China thought it really was the Shanghai stock market and some of the bad trade and manufacturing numbers we've seen here.

SIMON: Frank, does playing defense work?

LANGFITT: I think that it does work with some people, and part of the reason they do this is, in tough times they try to direct attention away from the party. Nationalism is one of the things they use to rally folks now that it hasn't been a communist country for a long time, and I'll give you an example. It can more effective than you might think. I was talking to a woman outside a stock hall - she's a retiree. And I asked kind of an innocent question, I said - how's the market going? - and instead of a straightforward answer, she was very accusatory and defensive. And here's what she said.

UNIDENTIFIED WOMAN: (Foreign language spoken).

LANGFITT: She starts off and she says, "American stock markets have also had declines. In the year 2008, you guys lead the way, right?" And what she's referring to, of course, is the United States sparking the global financial crisis back then, and she is correct. And then she goes on to say, "this time the U.S. stock market drop is blamed on China. This isn't right. Our China is friendly towards the U.S., and you guys cannot look at us as something to be laughed at." This was not the only person I talked to who was defensive. Other people criticized the U.S. as well.

SIMON: All right, that's an older investor who, I assume, grew up in the times of Mao Tse-tung and Communist Party indoctrination. What about some of the reaction online, which has a lot of younger people?

LANGFITT: Very different. And many people did follow the commercial press, which did report on this. And they were very critical of the government because the government, of course, created this bull market, which crashed beginning in June. And so I'll just read you a couple of things from online, from Weibo, the Chinese equivalent of Twitter. There was a guy whose name was Reson-Ming, and he said, close the market for good. How many people does the state-created stock market want to hurt? And then there was another person whose online name was Too Shady and said - how come I trusted the state that much? - because I was stupid. So even though the state media, in the beginning of the week, tried to ignore this and change the subject, a lot of people here weren't buying it.

SIMON: NPR's Frank Langfitt in Shanghai. Thanks so much.

LANGFITT: Happy to do it, Scott. Transcript provided by NPR, Copyright NPR.