CASH HANDOUTS TO JOURNALISTS SKEW CHINESE MEDIA COVERAGE

HSBC and the China Charity Foundation celebrated a decade of working together last month, bringing in the global bank's chairman and renting a room in the Great Hall of the People.
Organisers of the event extended the charity to Chinese reporters: donating Rmb200 ($26.40, £13) each to those who attended, according to people present.

Such payments – called “transport money” by public relations firms – are a ubiquitous feature of media events in China but one, critics say, that skews coverage in an increasingly competitive news market.

“It's awful. It's an embarrassment for Chinese journalism . . . and it's corruption,” says Ying Chan, director of the Journalism and Media Studies Centre at the University of Hong Kong. “It's not that journalists endorse this – people live with it knowing it is wrong.”

The handouts, which journalists call “red envelopes” after the envelopes stuffed with cash given to children on important festival days, are so routine they have become a significant source of income for many Chinese reporters.

Esmond Quek, managing director of PR firm Hill & Knowlton in Beijing, says payments – which can reach Rmb1,200 for television crews, since they have to “lug a lot of equipment around and usually have three crew members” – are at rates agreed with China's Public Relations Association. “The amount given is standard and specifically for transportation,” Mr Quek says.
Other industry executives dispute whether any formal industry agreement exists and a representative for China's Public Relations Association says: “You cannot say we encourage or discourage this practice.”

But no one contests that the payments are common or that, as critics point out, Rmb200 per journalist is considerably more than the average cost of a cross-town taxi in any Chinese city.
Ms Chan at the University of Hong Kong holds multinational companies that allow the payments at least partly responsible. But some companies try to stay aloof.

HSBC says it has a policy of never paying journalists and that it was not involved in organising the China Charity Foundation event. The event, featuring HSBC chairman Stephen Green, was hosted by the foundation and organised by local PR firm, Voice One Communications, which also said HSBC had no role in organising the payments.

Some of China's best- regarded publications, such as Caijing, a business magazine, and the Economic Observer newspaper, ban their reporters from taking the payments.
Other media are proving slow to follow, however, in part because of the need to hold down salaries. Fierce competition means tight margins for many of China's ever more commercially oriented newspapers.

As in other developing economies such as India and Indonesia where similar payments are common, low salaries increase the temptation for editors and journalists to accept straight bribes for other forms of overt corruption.

But in China, its spread reflects the endemic corruption that has flourished amid a Communist party-led embrace of the market economy. While Beijing has loosened controls on business news, the continuing clout of party propaganda commissars obstructs the development of independent industry standards.

The government has sought to clean up some abuses. Rules issued in April ban provincial reporters from taking kickbacks, extorting money for favourable coverage, or offering paid news.

The rules reflected the fact that while corporate payments to journalists can be a corrupting influence on the media, in some cases at least, news organisations may not be passive victims.
In one alleged incident last year, a Chinese real estate magazine called Hongdichan, or Red Estate, wrote an article accusing international property firm Jones Lang LaSalle of mismanaging a Beijing project.

When the company complained that it had not been contacted for comment, the magazine indicated it would run a second critical article unless the firm instructed clients to place advertisements with it, Jones Lang LaSalle and another person involved have claimed. Red Estate denied the incident occurred.

“There was a misconception [at the magazine] that we made decisions on advertising spending, but in fact we do not advertise on our own behalf and do not make decisions for clients on where they place their ads,” says David Hand, Jones Lang LaSalle's managing director in Beijing. “They realised this was not a sensible approach to take with us,” Mr Hand said.
The second article was never published.

This article was originally published in Financial Times by Jamil Anderlini and Mure Dickie 2007-08-06