Pacific Perspectives Front Page, a publication of the Asia Pacific Media Network

SOUTH CHINA MORNING POST/ 13 July 2015

WESTERN MEDIA'S CALLOUS DELIGHT AT CHINA'S STOCK MARKET CRASH
 

BY TOM PLATE

If you were greatly annoyed or disappointed last week by the overwhelmingly cold and unsympathetic Western media commentary about China’s stock market plunge, this didn’t mean you were a member of the State Council or an uncritical panda-hugger. All you’d have to have been was a fair-minded person.

Even quality Western newspapers were dispensing dismissive decrees with seeming glee and abandon. Press punsters could not resist the cheap headline (“the Great Fall of China”). Instant-analysis types were practically dancing in the pubs over the collapse of “the prestige of the party” as Shanghai and Shenzhen Composites shrunk dramatically. Even respected press portals were aghast over “the government’s frenzied attempts … dodgy intervention … helplessness....”

Let us leave aside for the moment whether we Western journalists are human beings who, in the face of a very rough patch for China and its people, are capable of summoning out of our cold hearts a non-ideological largesse of empathy. The question was also whether Western journalists were being journalistic: It was as if the media had never once before seen a stock-market bubble burst, or witnessed a scary gigantic selloff. It was as if something this messy and scary could only have occurred on the watch of a primitive Communist government trying to fit into in the fancy pants of us sophisticated Western free-marketers. Our media said we could even heard the fancy pants coming apart and exposing the naked incompetence of the Chinese government. 

Waves of low-grade ideological journalism kept coming at you. Beijing’s counter-measures were “desperate,” and only the country’s “compliant press” would find them credible. The authorities were “in danger of losing credibility,” and China’s market began to look “more like the Wild West.”  And of course there was near-unanimity on this core political point: “The collapse in confidence … is a sharp indictment of the party’s prestige…. the grave economic blemish on Xi Jinping and Lei Keqiang, China’s leaders.”

Precious few helpful or positive suggestions were offered – why care about 1.4 billion people assembled in our most populous country, which happens also to include the world’s most glamorous and fascinating special administrative region?  Let them melt on their margins! Even well meaning recommendations reeked of an absolutely extraordinary deficit of self-awareness: “The [Chinese] government should … be trying to strengthen the foundations of its economy and financial system,” scolded a famous US newspaper, as if it were proposing measures appropriate solely for China. “It could do so by better regulating and policing its securities market to root out fraud and speculation.”   Hmm … can we think of any other major economy that has suffered through similar market trauma for which such advice would be appropriate?

The Western news media always, as yet again last week, proposed that the world get down on hands and knees and offer fundamentalist worship to the “free market.” But even if the god of an absolutely free market existed, which of course it doesn’t, is this imaginary god not the same one that has failed us again and again? It takes no Marxist to point to the lack of the market’s magic in 2007-2008, when U.S. avarice, incompetence and deregulation helped seed a global crisis – widely viewed in retrospect as the worst since the Great Depression of the 1930s.

This devil of a god that continually fails was surely less than magical in 1997-99 when relatively open stock and equity markets in Asia had the life wrung out of them by avaricious western funds viciously shorting even otherwise well-regulated markets. The most famous example was Hong Kong SAR China itself, which rebounded when the alert local government of then C.E. Tung Chee Hwa counter-attacked with equities purchases, an astute ploy personally approved by then PRC Premier Zhu Rongji.

Western financial media were so quick to denounce the government’s bold intervention as a betrayal of ‘free-market’ ideals. But the effort worked wonders to bee-sting the short sellers, scaring them off to go buzzing for easy honey elsewhere. And the West was so quick to denounce then Prime Minister Mahathir Mohamad when he erected overnight capital controls to push back on western speculation against Malaysia.  But history was to rate well that pragmatic ploy: the definitive 2001 Harvard Kennedy School study praised the intervention for yielding a faster economic recovery, smaller declines in employment and wages, and a more rapid turnaround in the market.

In a serious financial or market crisis, positive government intervention is a moral necessity. Leaving everything to the magic of the “free market” is like avoiding quarantines and vaccines in an epidemic.  No doubt the efforts of the Chinese government, so very new to the game, lacked the discipline and coherence of – say - a municipal fire department with vast experience in conflagration containment. So the Western media was not wrong to note that the central government’s thrown- together fire drill lacked the seamless self-assurance of a Balanchine ballet. What was so troubling was the evident glee scarcely hidden in the reportage.  It was as if the media were almost rooting for China to fail.

It might have been hoped that we in the U.S. had moved beyond crowing over the problems of others, whether to psychologically distance the pain of our own problems, or out of malice toward China simply because of its global upsurge, or because it has a Communist government, or because … we are simply mean?

As a general observation, what (little) the American public knows about China comes from media attitudes and assumptions.  This endless cycle of stale air and superior attitudes is malicious and pernicious - a perpetual process that is not in anyone’s national interest. If China were somehow utterly to collapse (as improbable as that scenario would seem by all reckoning); it would not just be 1.4 billion Chinese who would suffer.  The fallout would cause pain for the people of every country in Asia, and for the people of every country in North America, especially in the U.S., itself having been so buoyed by China’s economic rise.

Why anyone would root for China to keel over is beyond understanding. It is not only dumb, from the standpoint of economic self-interest. It is a moral wrong. Where were the media leaders and articles asking: How can we help? We feel your pain - we too have been in similar straits before. Where was our decency and cosmopolitanism? China’s market crash suggested a disturbing Western callousness. Is there only darkness in our heart when it comes to China?

Columnist Tom Plate, the author of “In the Middle of China’s Future,” is the Distinguished Scholar of Asian and Pacific Studies at Loyola Marymount University.