Western media's callous delight at China's stock market crash is totally uncalled for

Tom Plate criticises unfair Western reporting on China's market troubles, not least its almost gleeful tone

PUBLISHED : Monday, 13 July, 2015, 5:13pm
UPDATED : Monday, 13 July, 2015, 5:13pm

If you were greatly annoyed or disappointed by the largely cold and unsympathetic Western media commentary about China's stock market plunge, this didn't mean you had to be 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 unseemly glee. Press punsters could not resist the cheap headline ("The great fall of China"). Instant-analysis types were practically dancing in the pubs watching the "prestige of the party" allegedly shrink along with the Shanghai and Shenzhen composites. Even respected press portals were positively entertained by "the government's frenzied attempts", "dodgy intervention" and "helplessness".

Let us leave aside for the moment whether we Western journalists are capable, in the face of a rough patch for China and its people, of summoning our empathy. The other question is whether Western journalists were being journalistic: it was as if the media had never before seen a stock market bubble burst, or ever witnessed a scary gigantic sell-off.

It was as if something this messy could only have occurred on the watch of a primitive Communist government failing to fit into the fancy pants of sophisticated Western free-marketers.

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, as 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 point: "the collapse in confidence … is a sharp indictment of the party's prestige", "a grave economic blemish on Xi Jinping and Li Keqiang , China's leaders".

Precious few helpful or positive suggestions were offered - why care about 1.4 billion people assembled in the world's most populous country, which happens also to include a 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 such measures were 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 traumas for which such a remedy would be appropriate?

The Western news media always 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 US avarice, incompetence and deregulation helped seed a global crisis - widely viewed in retrospect as the worst since the Great Depression of the 1930s.

This 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 famous example was Hong Kong itself, which rebounded when the alert local government of then chief executive Tung Chee-hwa counter-attacked with equities purchases, an astute ploy personally approved by then premier Zhu Rongji . Western financial media were so quick to denounce the SAR 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 very quick to denounce then Malaysian prime minister Mahathir Mohamad, when he erected overnight capital controls to push back on Western speculation against the country. But history was to rate that pragmatic ploy well: 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 banning 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 seamlessness of a Balanchine ballet. What was so troubling was the evident delight 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 US had moved beyond crowing over the problems of others, whether to psychologically distance the pain of our own problems, or out of absolute malice towards China simply because of its global upsurge, or because it has a Communist government.

As a general observation, what (little) the American public knows about China comes largely 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 the Chinese people who would suffer. The fallout would cause pain for the people of every country in Asia, and in every country in North America, especially in the US, itself having been so buoyed by China's economic surge.

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 was our decency and cosmopolitanism?

At the very least, Western reports of China's market crash suggested a disturbing callousness and unmerited cultural superiority.

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