Chinese officials launch 'witch hunt' amid financial market paranoia

A Chinese investor checking share prices in a stock firm
(Image credit: STR/AFP/Getty Images)

The Shanghai Composite Index has plummeted 37 percent since June, due in part to a period of weak economic data and Beijing's recent currency devaluations. In an attempt to rescue their economy, China's government is now treating investment firms with the same suspicion and scrutiny with which they have traditionally policed their political dissenters. "They seem to be harassing anybody that they thought was selling or was short," one Hong Kong hedge fund manager told The New York Times. "Hello, it's a hedge fund — they are long and short — but China is only looking at the short side."

Nearly 200 reporters have been punished by a special police campaign for "spreading rumors," according to the Times, the most notable of which was financial journalist Wang Xiaolu, who was detained by police and later made to apologize for an article the government believed had the potential to further damage the market. Other instances include police officers downloading trading data, or telling fund managers to stop selling.

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