HONG KONG SAR –\u00a0Media
The study found that the more traditional state-owned media and the
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All news media in China are more or
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However, recent years have seen the
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“People often ignore the fact
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His research paper Firm News and Market Views: The Informational Role of
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Different Informational Roles<\/b><\/p>\n
Prof. Zhang explains that the more
Typically, the more progressive news
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The more traditional state
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“You must understand that
On the other hand, not all
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However, the study found that during
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Diverging Editorial Stance<\/b><\/p>\n
Interestingly, contents reported by
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“What we saw was that the old
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The research study is the first to
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Reference:<\/b><\/p>\n
Joseph D. Piotroski, T.J. Wong, Shubo Zhang and Tianyu
the
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This article was first published in the China
\nOutReach<\/a>\u00a0– 26 July
\n2021 –\u00a0Chinese state-owned news media has
\nlong been criticised as being the government’s “mouthpiece” due to
\nits ties to the Chinese government. Many question the value of news reports
\nthey produce because report the information that the government intends to share.
\nSetting aside this stereotypical image, a recent study finds that in terms of
\nbusiness news, even state-owned newspapers provide unique and valuable
\ninformation to the country’s capital markets.<\/p>\n![](\"https:\/\/release.media-outreach.com\/release.php\/Images\/Thumb\/500x0\/165102\/iStock.jpg#image-165102\")
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\nnewer outlets serve different roles in providing information to financial
\nmarkets. (Source: iStock)<\/i><\/p>\n
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\nless controlled by the government. The government itself directly operates
\nseveral official media organisations that espouses the views of the party. The
\nbiggest and most influential include The People’s
\nDaily<\/i>, the largest newspaper in the country, television broadcaster China
\nCentral Television (CCTV), the news agency Xinhua, English-language daily China Daily<\/i> and the tabloid Global Times<\/i>.<\/p>\n
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\nemergence of a new breed of media outlets in the country that appear to operate
\nwith relatively more editorial leeway, such as Caixin<\/i><\/a>, Jiemian.com<\/i><\/a>, and
\nThe Paper<\/i><\/a>. They are still controlled by the state, but have a stronger
\nprofit incentive and are established with a clear mandate to attract and serve
\na broader readership. The news articles they publish often appear to be more
\ncritical, and they are seen as being more willing to push the boundaries of
\nreporting in the country, often covering stories that the largest (and
\nstate-owned) media companies are unwilling to. Consequently, the news coverage
\nof this new generation of media organisations is generally considered to be
\nmore valuable than the stories published on traditional state-owned media.
\nHowever, according to research, this may not actually be the case.<\/p>\n
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\nthat state-owned media, thanks to their close links to the government, can
\nprovide ‘inside’ market news and information that other news media can’t,”
\ncomments Tianyu Zhang<\/a>,
\nProfessor at the School of Accountancy at The Chinese University of Hong Kong
\n(CUHK) Business School.<\/p>\n
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\nOfficial Newspapers in China<\/a>,
\nco-written with Prof. Joseph Piotroski at Stanford University, Prof. T.J. Wong
\nat the University of Southern California and PhD student Shubo Zhang at CUHK
\nBusiness School, proposes that old guard state-owned media and their more
\nprogressive brethren serve two different roles in providing information to
\nfinancial markets. In the study, the authors reviewed nearly 3 million articles
\non domestic corporate news from 100 business newspapers in China from 2000 to
\n2017.<\/p>\n
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\ntraditional state-owned media and the newer outlets are different in terms of
\nacquiring, interpreting and disseminating information and therefore, the two
\ntypes of media may serve different roles in providing information to the
\nmarkets.<\/p>\n
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\norganisations tend to focus more on firm-specific reporting. This can help them
\nto gain readers who are interested in inside stories of well-known companies
\nand earn advertising revenue from firms that perhaps would like to be featured
\nin the newspapers. In other words, their news articles would lead to an
\nincrease in the supply of information on individual firms, such as the
\nperformance of certain companies and their stock prices.<\/p>\n
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\nnewspapers, on the other hand, are well suited to delivering political
\ndirectives and policy-related information. Due to their close relationship with
\ngovernmental units, these big official rags can provide the most precise policy
\ndirection and industry trends for corporate news. For instance, the study found
\nthat on average, their articles supply 10 percent more news on the general trends
\nof specific industries and markets than semi-independent business newspaper articles.\u00a0Furthermore, big state-owned newspapers tend to increase their
\ncoverage on industry and market news on days when the central government
\nannounces new industrial economic policies.<\/span><\/p>\n
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\ngovernment policy is fundamental to China’s economic growth and investment
\nopportunities. In other words, it wouldn’t hurt to listen to the ‘mouthpiece’
\nsometimes,” Prof. Zhang comments.<\/p>\n
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\nconventional state-owned newspapers are equal in terms of reporting policy-related
\ninformation. According to the study, newspapers owned by the central government
\nlevel often contain more information on the broader economy than the same type
\nof newspapers owned by local governments. The study explains that this
\nphenomenon shows that newspapers owned by the central government have greater
\naccess to future governmental policy directions, wider readership and they
\nappeared to have greater credibility.<\/p>\n
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\nthe National Congress of China’s Communist Party \u2013 a meeting of top officials
\nwhich is held every five years and serves to set the country’s national policy
\ngoals and to elect its top leadership, both types of newspapers reported an
\nincrease in their output of stories related to the macroeconomy to showcase
\ntheir coverage of the country’s major political event of the year.<\/p>\n
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\nthe two types of newspapers diverged further after President Xi Jinping’s
\nhigh-profile visit to the big three state-owned media \u2013 The People’s Daily<\/i>, Xinhua and CCTV \u2013 in February 2016. During this
\nvisit, President Xi ordered news media organisations to “follow the Party’s
\nleadership and focus on ‘positive reporting'”, CCTV reported<\/a>. The researchers
\nfound that after the visit, more editorially progressive newspapers drastically
\nreduced the amount of coverage on the overall economic performance of
\nindividual industries and the macroeconomy, whereas the traditional state-owned
\nnews media saw a significant surge in their coverage of this type of
\ninformation.<\/p>\n
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\nschool state-owned news media organisations aligning themselves with the
\noverall political and propaganda role that the Party set for them in the
\neconomy, whereas news media with more independent editorial stances were
\ndistancing themselves from this political agenda to focus solely on their
\nbusinesses interests,” Prof. Zhang explains. “This way, the two types
\nof news media have different roles in providing different types of information
\nfor investors.”<\/p>\n
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\nprovide evidence that China’s different state-owned news media play an important
\nand complementary role in providing useful information to financial markets.
\nProf. Zhang and his co-authors suggest future research can look into the way
\nthat the market reacts to existing biases in the content of official newspaper
\narticles and whether the market corrects for these known influences.<\/p>\n
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\nZhang. (2019) Firm
\nnews and market views:<\/a><\/p>\n
\n
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\ninformational role of official newspapers in China<\/a>. Working
\npaper.<\/p>\n
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\nBusiness Knowledge (CBK) website by CUHK Business School: https:\/\/bit.ly\/3i3PPsn<\/a>.<\/p>\n
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