Shanghai Street View: Media Malaise busted for extortion

A few weeks ago I praised Shanghai’s laggard media for uncovering one of the biggest stories of the year, so it seems fitting that this week I take another look at our local media’s return to the spotlight for far less positive reasons.

For those who don’t follow the industry so closely, the rare moment of glory for Shanghai’s media I’m referring to came back in late July. That’s when undercover TV reporters from Shanghai Media Group (SMG) exposed that a range of unsavory practices at Husi Food, a US-owned meat supplier to such major global brands as McDonald’s (NYSE: MCD), KFC (NYSE: YUM) and Starbucks (Nasdaq: SBUX).

The news this week was equally sinister, but instead of breaking the story the media itself was at the center of a major extortion case involving one of the nation’s most respected financial news organizations. That scandal saw a group of reporters and editors from the Shanghai-based website affiliate of the 21st Century Business Herald arrested for extorting money from companies for favorable coverage.

While the Husi Food case marked a rare exception of major achievement for Shanghai’s media, this latest case involving the website is all too common in the Chinese media. It reflects a broader lack of ethics at many of the nation’s broadcasters and publishers, where making money is often paramount over everything else, including good and fair reporting.

That’s not to say that things aren’t changing. As a journalism teacher with many students now in the working world, I can say that many reporters and editors want to write ground-breaking stories that inform the public about what’s happening in society. But a number of obstacles stand in their way, including low salaries and a system that sometimes encourages reporters to perform the dual role of advertising salesmen – something that would be strictly taboo in the west.

The scandal saw 8 people arrested, from both the website and 2 public relations firms. The group included’s editor-in-chief, which shows just how endemic the corruption was among the team that ran the website.

The group were accused of extortion by demanding high “fees” from companies in exchange for positive coverage. Companies that refused to give the cash were threatened with negative coverage, and were ultimately pressured to pay “hush-money” to stop the site from publishing negative stories about them.

The scandal itself wasn’t so noteworthy for its details, but rather because it happened at a website tied to the prestigious 21st Century Business Herald. While many smaller local publications and TV stations engage in this type of behavior, a small but elite group is gaining a reputation for more western-style practices that include higher salaries and giving reporters the time and resources they need to uncover big stories.

Publications among that elite group include the 21st Century Business Herald, as well as names like financial news publishers Caixin and Caijing. The central media including CCTV and Xinhua also have relatively clean reputations, though CCTV’s image took a big hit back in July when an anchor and senior director from its financial reporting division were detained on allegations of corruption.

Practices like accepting bribes for positive coverage and blackmail to avoid negative coverage are just 2 of the unethical and often illegal practices in China’s media. The problem is so common that I dedicate a lesson in most of my classes to journalism ethics, since reporters in the west are also commonly confronted with similar dilemmas with no clear right or wrong answer.

In the west, a scandal like the one at would rarely happen, and I can’t recall a single similar case during my tenure working as a reporter in Los Angeles in the 1990s. More common in the west are scandals involving fabrication of news by reporters looking for glory or too lazy to cultivate the sources they need to break big stories. Manipulation of photos is also an occasional source of media scandals, usually occurring when overzealous photographers try to make their pictures more dramatic than they really are.

Meantime back here in Shanghai, local media are all probably feeling just a small degree of shame over this latest scandal at, especially because the corruption went all the way to the top of the organization. Equally shameful is the fact that the website is one of the few Shanghai-based divisions for 21st Century Media Co, whose operations are mostly run out its hometown of Guangzhou, which is better known for its cutting-edge journalism.

In journalism we have a saying that “You’re only as good as your last story”, meaning you can’t survive and thrive over your past accomplishments and must always be breaking new ground to earn the public’s respect. In the case of Shanghai’s media, the glory from breaking the Husi scandal is rapidly becoming a distant memory, being taken over by far more common internal scandals like the one at

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