Chinese writers arrested for online ‘slurs’ about dairy firm as Beijing tightens grip on social media

Two Chinese men have been arrested on suspicion of spreading rumours on social media about the country’s largest dairy firm and its chairman that led to its market value losing almost US$1 billion, state media reported on Monday.

Zou Guangxiang and Liu Chengkun were originally detained last month at their homes in Beijing by police officers who had travelled from Hohhot, capital of Inner Mongolia, where the company, Yili Group, has its headquarters, Xinhua reported.

The report did not say when the arrests were made, but said they came after an official inquiry into the case, which also sparked a national outcry over Beijing’s ever-tightening grip on people’s right to free expression online.

China’s top dairy firm says CEO too ill to attend Asia’s Davos, squashes rumours of police probe

According to the report, headlined “Social media is also ruled by law”, the arrests came after Yili’s chairman, Pan Gang, told the police about the rumours, one of which claimed Pan had himself been taken into custody.

In fact, Pan has been receiving medical treatment in the United States since leaving China on September 5, Xinhua said.

Liu, a former journalist, is accused of writing a series of “fictional” stories which, while not naming either Yili or Pan, featured descriptions that bore striking resemblances to the company and the individual.

Based on Liu’s work, Zou made claims online that Pan had been detained upon his return to China from the US, where he had been running Yili for the past six months.

Both Liu and Zou’s articles went viral on March 26. On the same day, Yili’s share price fell by more than 3.5 per cent, wiping almost 6.1 billion yuan (US$959.6 million) off the value of the company, Xinhua said.

Yili later issued a statement saying Pan had been receiving medical treatment for a congenital heart problem. While in the United States, he maintained regular contact with the company, and took part in important telephone and video conferences, Xinhua reported.

Online outcry forces China’s Twitter, Weibo, to backtrack on censorship of gay content 

After his arrest Liu told police he had intended to make readers believe his stories were about Pan and Yili, the report said.

“My goal was to raise eyebrows and make my [social media] account popular … so I can make money from advertisers,” he was quoted as saying while in detention.

Police were quoted as saying that Liu’s chat record on WeChat – China’s most popular messaging service – provided evidence that he intended to defame Yili.

In a note to a friend sent via the platform, Liu said: “[I] can write novels about those things that have not been proved true. I expect I will have many fans then.”

After Peppa Pig’s ban in China, seven other cartoons censors have blocked

Under Chinese law, any online post that receives more than 5,000 views or is forwarded more than 500 times and is then deemed to be defamatory merits investigation by public prosecutors.

Xing Haoyu, a prosecutor from Hohhot, was quoted by Xinhua as saying that the posts made by Liu and Zou both fell into that category.

“Their libellous content spread extensively and confused the public and caused a malignant effect on the market,” he said.

Although Liu claimed to have written fiction and did not mention Yili or Pan by name, he could still be charged with defamation because it was easy to identify his intended targets, Xing said.

Despite the proliferation of social media bloggers in China – there are more than 20 million on WeChat alone – Beijing has been steadily increasing its censorship rules and the deletion of posts is common.

The arrests of Zou and Liu at their homes, however, prompted increased levels of public outrage as many people accused the Hohhot police of acting in the interests of Yili, a major taxpayer and job creator in Inner Mongolia.

How China censors its internet and controls information: two new books explain

Veteran reporter Wang Zhian called on the public to boycott Yili products.

“If making allusions is a crime, then unspoken criticism is also a crime,” he wrote on Weibo, the Chinese equivalent to Twitter. “If enterprises like Yili become bigger and stronger, China is doomed … I hope every Chinese with a clear awareness of right and wrong stands up and says No to Yili.”

Last month the New York-based Committee to Protect Journalists issued a statement calling for Zou’s release and urged Chinese authorities to “stop harassing the media for doing its job”.