In a stark illustration of media corruption in China, a prominent financial blogger named Kou (寇某), who ran a pair of prominent consumer-related social media channels, was sentenced on March 12 to more than 10 years in prison for “news extortion” (新闻敲诈). The case, which unfolded between 2022 and 2023, highlights a chronic problem in the country’s controlled media environment. By fabricating false news stories about companies and threatening reputational damage, he systematically extorted over 700,000 yuan through manipulative tactics that exploit the vulnerabilities of China’s information ecosystem, according to a report by the Xinmin Evening News (新民晚报), a paper under Shanghai’s state-run SMG.
The recent reporting stems from the completion of Kou’s legal case and ongoing efforts, officials say, to clean up the online information environment — serving as a warning to other potential offenders. The channels in question, “Consumer Financial Channel” (消费金融频道) and “Payment Encyclopedia” (支付百科), were previously included in a 2023 list of cautionary cases issued by the Cyberspace Administration of China (CAC), the country’s top internet control body. That list accused the channels of exploiting the principle of “public opinion supervision” (輿論監督) — a term associated with media monitoring and even investigative reporting — to commercially exploit companies.
Kou’s “Consumer Financial Channel” was also profiled last year in a feature story from Shanghai’s The Paper (澎湃). In addition to Kou’s case, that story detailed a 2019 case in which a young couple in Shanghai illegally established 41 fake news websites, systematically publishing over 100,000 negative articles about companies and individuals across 20 provinces. By charging 500 yuan per negative article and targeting thousands of businesses, the couple earned over 1 million yuan in less than a year through their online extortion scheme.
What are the vulnerabilities of China’s information ecosystem to which the Xinmin Evening News report referred?
One crucial underlying issue is the state’s control of the press environment itself, which has led to rent-seeking behavior by powerful state media journalists who can threaten exposure of alleged malfeasance and demand “hush money” (封口費). Importantly, cases of news extortion over the past two decades in China have often implicated powerful state-run media as well as outright fraudsters. The most notorious example is the 2002 “Gold Nugget Case,” where eleven reporters, including four from Xinhua News Agency, accepted cash and gold nuggets to cover up a mining explosion that killed 37 workers, highlighting the deep-rooted corruption within China’s media landscape.
